Any sole proprietors out there?

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Lxnxjxhx

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Any LLCs?
Any advice on changing from a sole prop. to an LLC?
Thanks.
 
When you change from a sole prop to an LLC, you have to start paying comp on yourself, if you don't happen to do that already. That was one surprise.
 
I am an sole member LLC in South Carolina. Our rules are no comp required under (from memory here, may be off), 3 employees.

As a sole member, I am viewed as a sole proprieter for tax purposes.

c2500
 
c2500 said:
I am an sole member LLC in South Carolina. Our rules are no comp required under (from memory here, may be off), 3 employees.

As a sole member, I am viewed as a sole proprieter for tax purposes.

c2500
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same here, no comp 3 employees or; and there are a lot of guys that take advantage of that. i'm incorporated and officers are excluded from the 3 employee count.
 
What I understand to be the main benefit for an LLC has more to do with putting an extra legal roadblock between your assets and your job liability.

If you don't have a lot of personal assets, then it may make less sense, but I do not see any real disadvantage to having one, other than the money it costs to set it up.
 
danickstr said:
What I understand to be the main benefit for an LLC has more to do with putting an extra legal roadblock between your assets and your job liability.

If you don't have a lot of personal assets, then it may make less sense, but I do not see any real disadvantage to having one, other than the money it costs to set it up.
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That is a common mistake, thinking you don't have a lot of personal assets, so you don't need insurance or corporate protection, you don't need one asset, to have a court demand you pay, and put you under court probation, for the rest of your life, while you pay up, insurance and corporate protection, is cheaper.
 
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danickstr said:
What I understand to be the main benefit for an LLC has more to do with putting an extra legal roadblock between your assets and your job liability.

If you don't have a lot of personal assets, then it may make less sense, but I do not see any real disadvantage to having one, other than the money it costs to set it up.
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it cost me $100 to setup my s-corp. you should be able to get the paperwork from your state. just fill it out and send it in. i actually did mine online. took about 20 minutes or so. it did the articles of incorporation, stock shares, everything.

i got my federal tax ID # at the IRS website, for free.

same w/ the state taxpayer ID number.
 
I looked at changing from a sole proprietor to an S-corp. I did not really see the advantage. It would make my paperwork more complicated and my taxes higher.

The advantage is the perceived protection of personal assets but I've read pro's and con's on that too. Fortunately I've never been in that situation nor had to even make an insursance claim.

My thought is I could sue anyone for anything at anytime and any one of my customers could sue me professionally AND/OR personally whether I am incorporated or not. Doesn't mean they would win but with what you read all the time about successful frivolous lawsuits I decided insurance was sufficient enough.

I carry a $1 million liability policy for contracting and a separate $1 million professional liability "errors and ommissions" policy for engineering.
 
Just a quick tip, check with your state regarding exact wording of your articles of incorporation. After my attorney filed ours, I had to amend them to read exactly as the state requires. No big deal, just thought I'd pass this along.
 
Here's the best advice you can get on the subject:

Talk to your lawyer about it. An hour of his/her time is money well spent.
 
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