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    3 Replies Latest reply on Nov 6, 2008 9:38 AM by Chris1978

    NYC: The right business structure?! LLC or SP

    Chris1978 Newbie
      I am currently working on my business plan to apply for a
      small start up loan. Fortunately I am able to start a small business
      without the start up loan but it will give breathing room (via Accion
      NY) . (Aside from the
      market/credit lock crisis).

      I should consult a lawyer, but before I do so.. I'll consult strangers on this
      board. I'm starting a webpage design company focused specifically at one
      industry. I have ten years of experience in this given industry and I see
      a demand. I'm torn if I shall file as an LLC or a sole
      proprietorship. Because it is a start-up, working as a SP takes a great
      deal of stress off the functioning and business taxes of the business, but when
      the company grows, will filing as an LLC be a nightmare?

      Any insight? I much appreciate any insite.
        • Re: NYC: The right business structure?! LLC or SP
          GrowthCurve Adventurer

          Forming an LLC is not complicated, and you'll still have to keep books for your business regardless of whether you're an LLC or a sole proprietor. You'll have to file one more tax return than otherwise, but it's not really all that burdensome.

          I think you should separate your business life from your personal life as soon as possible -- and practical.

          Having said that, I think you're smart to push back on creating a lot of administration for yourself before you even know if you have a business here or not.

           


          How about this?

           


          Go ahead and press on as a sole proprietor. Get one or two customers. Make a few bucks. Prove to yourself that there's really a business here. THEN go out and file for the LLC and do things the right way.

           

          1 of 1 people found this helpful
          • Re: NYC: The right business structure?! LLC or SP
            Lighthouse24 Ranger
            Welcome to the community. Participants who've been here awhile know that I am not a fan of single member LLCs. 95 percent of the time, it would be cheaper, easier, and faster for a one-person operation to start-up as a sole proprietor, and then incorporate later. Because owners of one-person start-ups have to personally guarantee any loans or credits lines anyway, and because that one individual is doing the key work and making all the management decisions personally, the concept of "limited liability" for the single member LLC entity really doesn't mean that much (especially if someone who has knowledge and resources is intent on securing a judgment from you). So why bother with it? That's just one viewpoint, however . . . not the only viewpoint, obviously.
            1 of 1 people found this helpful
            • Re: NYC: The right business structure?! LLC or SP
              Chris1978 Newbie
              Great! Thanks for the reply.