LLC or Sole Proprietorship?
Anyone know if you need to be an LLC if you're already covered by the ASCP liability insurance? I'm going to be renting a booth and wondering if the sole proprietorship will suffice? I know the association offers legal advice, I'm just waiting on a callback and anxious to hear what others have done to start their businesses...
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Replies to This Discussion
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Permalink Reply by Cortney L'Nae on
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LLC separates you legally from the business. If you are a LLC and get sued they came touch your personal stuff. If you are sole proprietor, they can come after the business and personal stuff.
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Permalink Reply by Tiffany Burnside on
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Insurance will protect some of your assets, but it doesn't actually prevent a lawsuit. An LLC separates yourself from your business so they can't come after your personal finances. If you are starting a new business this would be your best option. However, if you are just renting a booth at another established salon/spa and operating as yourself, it may make more sense to just do a sole proprietor. Everything taken into consideration, make sure to weigh the pros and cons of both. All in all, an LLC is the best, legally safe option :)
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Permalink Reply by Angela Segal on
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I agree with the other ladies. LLC is definitely the way to go. As they said, it protects and separates your personal assets in the event you are ever sued. Best of luck.
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Permalink Reply by Aesthetic VideoSource on
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Hi Rebecca,
I would definitely create an LLC. You can accomplish the task in 2 or 3 hours and it will protect your personal assets. In order to form an LLC all you need to do is find a company name that is not registered in your state, register the name you come up on your state's website, and then fill out the LLC form to create your LLC. You just state who the owners of the company are and your legal address, etc... It's super simple. You don't even need an attorney to fill out the forms. In Utah, you can fill out both forms online and then each year you renew your LLC name with the state and pay a small fee that is less than $50. It is probably just as simple in your state.
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Permalink Reply by C. Lopez on
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I agree about the LLC but am confused on one thing. I thought I saw somewhere that if you go LLC you have to pay high taxes. 20% I think. Does anyone out there remember seeing this or know anything about this?
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You pay self employment taxes, same as you would sole proprietor. You would do a schedule c, what the irs calls pass through taxation
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Forming any corporate entity, LLC or S Corp, allows you to minimize your taxes through a few different options, including shareholder distributions and retirement contributions
You can also from an LLC and file to be treated as an S-Corp. Consult a tax professional to learn more
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Permalink Reply by Ally Draizin on
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Neither. Do a S-Corp for sure. It saved me thousands in taxes.
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I keep hearing to go s-corp, so it's good to see that mentioned.
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Permalink Reply by MELANIE TREHAN on
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What's the benefits of S-corp? What is the difference?
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I have an S-Corp and LLC. For me the benefit of an S-Corp is that I can take out 50% of my wages as a shareholder distribution which I don't pay federal and state income tax on and then I take out 50% of my wages as an employee. An S-Corp also protects your personal assets. So basically you're an employee of your S-Corp. I would recommend you talk with your accountant to see if this is the case in your state.
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Does a S- corp protect your peesonal assets like a LLC?
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