I'm looking at starting a small business as many of you know, and wanted to ask you other small business owners which would be best for me? Sole proprietorship? LLC? I've wikisearched some, but wanted some advice from some experienced entrepreneurs.
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Sept. 11, 2011 8:23 p.m. BoostedBrandon Reader
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Sept. 11, 2011 8:29 p.m. Dr. Hess SuperDork
Sorry, I don't recall your particulars. What kind of business? What's your liability risk? Any employees? Any partners? Long term goal? Capitalization?
Wiki-*== loozer answers.
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Sept. 11, 2011 8:29 p.m. Toyman01 SuperDork
LLC. Offers the tax advantages of a sole proprietorship, and the liability advantages of incorporation.
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Sept. 11, 2011 8:30 p.m. Dr. Hess SuperDork
Incorporation has virtually zero liability advantages.
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Sept. 11, 2011 8:34 p.m. EastCoastMojo SuperDork
'A sole proprietorship is the cheapest and easiest form of business you can start. All you need to do is name the business, get a business license from your city or county, publish a fictitious business name statement in a local newspaper, open a checking account, open your doors, and you are, quite literally, in business. Legally speaking, though, you and the business are one and the same. If something goes wrong at the shop you are personally on the hook.
One of the main reasons to incorporate is to legally shield your personal assets from business debts. There are also many tax advantages to having a corporation, as well as pension and profit-sharing options, however, creating a corporation is not inexpensive. Corporations are also subject to greater governmental regulation and scrutiny. The tax code as it related to corporations is complex and will require the annual assistance of a lawyer or accountant.
An LLC combines the best of corporations and the best of sole proprietorships and partnerships, and are easy and inexpensive to create. Once formed, an LLC can protect you from business liabilities, create an easy structure for running the business and make tax time easier.'
If this helped you out, I highly suggest that you read 'The Small Business Bible - Everything you need to know to succeed in your small business' by Steven D. Strauss. It's a wealth of info for someone starting out. -
Sept. 11, 2011 9:19 p.m. DirtyBird222 SuperDork
From what I know, LLC is the best way to go.
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Sept. 11, 2011 10:28 p.m. BoostedBrandon Reader
In reply to Dr. Hess:
http://grassrootsmotorsports.com/forum/grm/mobile-oil-change-thoughts/39455/page1/
That's linked from the mobile site off my phone.
Basically mobile maintainance, and basic repairs, going to customers' homes, jobs, etc. Me myself, with no employees, some tools and a van down by the river.
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Sept. 11, 2011 10:37 p.m. SVreX SuperDork
A corporation is far better than a sole proprietorship, however given the business you are considering, you could start cheap and fast as a proprietorship, with the intention of incorporating within a year or so.
I prefer an S-Corp, because any losses can be applied against gains in other businesses or jobs.
You can start without the corporation, but DO NOT start without insurance. You will be out of business the first time you scratch a paint job or forget to re-install a drain plug.
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Sept. 11, 2011 11:31 p.m. BoostedBrandon Reader
Where does one inquire about insurance?
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Sept. 12, 2011 5:39 a.m. SVreX SuperDork
An insurance agent.
You are looking for General Liability insurance- not all agents handle it, but whoever you call can refer you to those companies locally that do.
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Sept. 12, 2011 7:31 a.m. alfadriver SuperDork
Check your state laws, too. for a while, we had a DBA- Doing Business As style company.
And our home had special business insurance, as SVreX points out, your agent should tell you if you can. If they can not- there are plenty of options out there.
Anyway, I'll re-stress to check with YOUR state, and it's options/requirements. All states are a little different.
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Sept. 12, 2011 10:18 a.m. Datsun1500 SuperDork
General Liability does not cover vehicles if you are moving them and they get damaged. You need what is called a garage keepers policy. Ask any insurance agent, see if you can find an Erie ins. agent, they will know exactly what you are talking about.
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Sept. 12, 2011 10:44 a.m. BoxheadTim SuperDork
As someone who's been bit by this before, I'd research carefully which corporate structure would give you personally and your assets the best protection in case something goes badly wrong.
I didn't have the money to incorporate for my first company in Germany and ended up paying for that mistake for a good 10 years (no personal bankruptcy in Germany at the time). You don't want to put all of your personal assets on the line if things go wrong.
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Sept. 12, 2011 9:36 p.m. BoostedBrandon Reader
Now I need your help convincing my wife that I'm not batE36 M3 crazy. Every time I mention insurance, a work van, tools, she rolls her eyes.
