lise_pi Posted November 15, 2006 Share Posted November 15, 2006 Before I start selling my candles I want to establish my business - get a business license, tax id etc. Any suggestions whether to pick sole proprietor or Limited Liability Company (LLC)? I'm getting insurance too but with the sole proprietorship you're still liable with all your assets.Just wanted to know what has worked for you? Thanks! Quote Link to comment Share on other sites More sharing options...
LaVida Posted November 15, 2006 Share Posted November 15, 2006 I went with LLC because of the liability issues.... Quote Link to comment Share on other sites More sharing options...
ah-soy Posted November 15, 2006 Share Posted November 15, 2006 Here are a couple of links with info...http://sbinformation.about.com/cs/ownership1/a/LLC.htmhttp://www.nolo.com/article.cfm/ObjectID/ED01121A-B4BF-498A-8BC0DBD121A0C869/catID/1745D9A3-D50D-4AAD-BFB3ED609A4EE3F5/111/FAQ/Just google 'limited liability company' and you'll get hundreds of links. Quote Link to comment Share on other sites More sharing options...
barncat Posted November 15, 2006 Share Posted November 15, 2006 I was told if you make over 100K or have employees, you should inc or llc. Otherwise, it is not efficient. it costs a lot of money to start it up and if you are only doing this at a small level, you may go broke before even start. Each individual is different. Call your attorney or accountant. Quote Link to comment Share on other sites More sharing options...
Di_in_AZ Posted November 15, 2006 Share Posted November 15, 2006 I would go to your local SBDC - Small Business Development Center. They are usually found at community colleges and you can look them up online to find the one closest to you. They will meet with you and help you decide what is right for you. To be honest, that is a personal decision that you need to make based on your current situation. Here is the SBA page with a SBDC locator:http://www.sba.gov/sbdc/Here is a link from the SBA on starting a business and it also has a fairly good business structure page:http://www.sba.gov/smallbusinessplanner/index.html Quote Link to comment Share on other sites More sharing options...
LaVida Posted November 15, 2006 Share Posted November 15, 2006 I was told if you make over 100K or have employees, you should inc or llc. Otherwise, it is not efficient. it costs a lot of money to start it up and if you are only doing this at a small level, you may go broke before even start. Each individual is different. Call your attorney or accountant.I sought legal advice by asking questions to attorneys. I filed myself but it would have cost double to file w/ an attorney. It's a lot more than a sole proprietor but it's definitely worth it in the long run.... If someone breaks out and accuses your company of the break out w/ an LLC your personal assets won't be touched only your company's.... It'd be great to be caught up in court and not have a place to live... But do research before you decide. Another thing, regarding taxes. LLC's are looked at as sole proprietors when filing taxes if it's a "one member llc".... so that's a plus. Quote Link to comment Share on other sites More sharing options...
malaki Posted November 15, 2006 Share Posted November 15, 2006 if somebody breaks out in a rash i thought that what we get insurance for or if there house burns down, i thought that was covered under are insurance. Quote Link to comment Share on other sites More sharing options...
lise_pi Posted November 15, 2006 Author Share Posted November 15, 2006 I did some research on starting a LLC in VA. It looks like the total filing fee will be about $100-150 which is definitely worth it!THanks for all the great replies and links!To reply to the last comment - Insurance is definitely good too but I'm sure the insurance company has a cap limit too, right? So if you were sued and the plaintiff was granted more than this limit I think you would be liable (i.e. your personal assets)...I'm not sure about this but I would think that's how it works... Quote Link to comment Share on other sites More sharing options...
malaki Posted November 15, 2006 Share Posted November 15, 2006 i got the 1,000,000 dollar coverage but am thinking of uping it to 2,000,000. im registered as sole proprietor,but i dont sell over 100k either but i wish i did if it ever came to the day where i made over 50k doing this then i will think again about llc. Quote Link to comment Share on other sites More sharing options...
LaVida Posted November 15, 2006 Share Posted November 15, 2006 but that will tie into personal liability I believe Malaka....I'm glad you decided to go with the LLC... it'll be worth it in the long run.... Quote Link to comment Share on other sites More sharing options...
lise_pi Posted November 15, 2006 Author Share Posted November 15, 2006 I haven't seen anything about a 100K limit to establish yourself as a LLC. You can change from Sole Proprietor to LLC at any time I believe as long as you file all the right documents. Your state's website can help you out with the details. Quote Link to comment Share on other sites More sharing options...
Di_in_AZ Posted November 15, 2006 Share Posted November 15, 2006 A LLC does not absolve you of all liability. You need to research that first. If you are proved negligent, you can still be held personally liable. This is a misconception about the LLC that most people believe. You cannot do anything in the US and be totally absolved of liability. It does provide an "umbrella" of protection, but it can be broken in some cases. The appropriate course of action would to contact an attorney, make sure you review what the law is in your state (each state varies) and make sure you have insurance. LLC is not a insurance policy by any means. Quote Link to comment Share on other sites More sharing options...
malaki Posted November 15, 2006 Share Posted November 15, 2006 my insurance cover product liabilty. Quote Link to comment Share on other sites More sharing options...
Beth-VT Posted November 15, 2006 Share Posted November 15, 2006 Di is exactly right. LLC does not fully protect your personal assets, they can still be at risk.It does, however, protect your employees and their personal assets, but as the owner of the company you're still at risk. Quote Link to comment Share on other sites More sharing options...
LaVida Posted November 15, 2006 Share Posted November 15, 2006 Di_AZ... Yes, you are liable either way, but I was referring the freezing of personal assets .. you still can live your life day to day while going through court precedings.. of course if you are held responsible and you don't pay up... you better plan on loosing everything you own.... Quote Link to comment Share on other sites More sharing options...
lise_pi Posted November 15, 2006 Author Share Posted November 15, 2006 So much great advice on this website! Thanks for all your help! It makes life a little easier:-) Quote Link to comment Share on other sites More sharing options...
malaki Posted November 15, 2006 Share Posted November 15, 2006 thats why you always have to list everything you put in your products. If you miss 1 tiny little additive that is what that person would be allergic to. i put it this way if people get it in their head that they want to sue you they are going to. Quote Link to comment Share on other sites More sharing options...
lise_pi Posted November 15, 2006 Author Share Posted November 15, 2006 Does that apply to candles too? Quote Link to comment Share on other sites More sharing options...
malaki Posted November 15, 2006 Share Posted November 15, 2006 well make sure you have a warning label on the bottom and instuctions Quote Link to comment Share on other sites More sharing options...
lise_pi Posted November 15, 2006 Author Share Posted November 15, 2006 Absolutely:-) Quote Link to comment Share on other sites More sharing options...
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