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Great that you have registered your business. The Sole prop is THE MOST common form of business.
Do you have an Accountant?? Do you know about SCORE?? SCORE is FREE
I don't have an accountant yet, but I am most definitely looking into one well before I act on this business venture.
Just saw your old post. Here's the short and fast version, but remember the there are MANY variables. You want to talk to an accountant and a lawyer before you make the change. An accountant knows all the tax ramifications and a lawyer knows the legal and business flexibility ramifications. while an accountant will set you up, I prefer using a lawyer because they do it right. Accountants really only think in terms of the financial process, lawyers make sure that every legal form gets filled out. That said, here goes...
LLC: LLCs have flexibility of control. You can cut up a business any way you want under an LLC, with multiple partners holding different kinds of ownership. You could even have another LLC be an owner of your LLC. LLCs offer slightly better liability protection, though the corporate veil has very real limits.
S-Corporation: If you are a simple service entity (no significant inventory) then an S-Corp will save money for you on taxes. The disadvantage is that you are very limited in how you can distribute shares (I pulled this from Wikipedia):
- Must have only one class of stock.
- Must not have more than 100^
- Shareholders must be U.S. citizens or residents, and must be \\ physical entities (a person), so corporate shareholders and \\ partnerships are to be excluded. However, certain tax-exempt \\ corporations, notably* 501(c)(3)* corporations, are permitted to be shareholders.<</a>
- Profits and losses must be allocated to shareholders proportionately to each one's interest in the business.
I would be the sole owner of the company, because at the beginning I would contract certain work out that I cant do myself. I just want to be ready when the company takes off and I'm not stuck as an S corp.
Got it. It definitely sounds like you want flexibility, though you will be able to convert when you need to. do you have a good lawyer and do you know the steps from here?
I do have a lawyer, but I am looking for another lawyer, my dad currently uses him in his current business, and I just want to branch off and find a lawyer that is concerned about my success as well, rather than it being a favor for my dad. I am always eager to hear what people have to say about next steps, so if you have any please let me know.
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I have already registered my business name, and received a DBA under a sole proprietorship, but looking at where I am trying to take the company. I was wondering was that the best route. I looked into a LLC and realized that it might be a better situation for me. Does anyone have any suggestions, because I am at a stand still with what structure I want my company to be.