Please post link for LLC treated same as Sole Proprietor...
@g8tor89 wrote:https://farr.com/single-member-llcs-threatened-by-recent-florida-supreme-court-ruling/
I am not a lawyer, but I don’t think you are reading the article correctly.
It states that the assets of a LLC are not protected if owned by a single person.
The LLC itself would be an asset of the owner.
This has nothing to do with the owner being personally responsible for LLC debt.
@g8tor89 wrote:Yes I know there are some very good guide here but hear me out.
I techinically have a sole proprietorship as an uber, lyft, postmates driver etc as an independent contrator. I wanted to get started with establishing my business credit, mainly because some of the rewards of business cards would be really good for my indepedent contract work.
I know about DUNS and EIN numbers, etc, establishing NET30 accounts, getting basic revolving accounts with a PG going. What Im looking for in terms of advice is somewhat tax and somewhat credit related. I of course could establish an LLC to make my business a real, totally seperate legal entity. I live in Florida however, where refiling with the state every year is required. Something like 150 bucks just to tell them nothing has changed. Furthermore, there was a recent court decision here (Florida) that said LLCs with only one person attached to it could have that one person made legally liable in the same way they are responsible for a sole proprietorship. Removing one of the main advantages of having an LLC.
So my question is basically, should I deal with the headaches of making an LLC? Is there anything business credit-wise that would make it worth it or should I just try to deal with the pain of establishing business credit as a home based sole proprietorship?
Given your particular case with a broader range of independent companies that you are working for I would say yes,
It is worth creating a business entity for the following reasons. 1) As an LLC you can actually take tax deductions on your business expenses with less concern of audit. As of 2018 you can no longer claim a hobby business as deductions and sole proprietorship must show income and pay appropriate tax on earning and must be profitable 3 of 5 years. 2) if you do and structure it properly the protections are there. You could own 99% of the company and put 1% in anyone else's name. Make sure you include your vehicle as part of business property. This will intern protects your personal property baring and unfortunate event in which you were sued. 3) Outside of the granted protections and the tax deductions you can easily expand other lines of business under your LLC shell.
As a sole proprietor you are not required to get an EIN or file a business name, but you are also at an elevated risk for audit and being sued personally. You are afforded limited protection and insurance through some of your employers depending on which phase of operation you are in but you are at great risk during your in between times. As such I think you may want to consider creating an entity that affords you some security.
@Anonymous wrote:
@NimbusIII wrote:
@g8tor89 wrote:Yes I know there are some very good guide here but hear me out.
I techinically have a sole proprietorship as an uber, lyft, postmates driver etc as an independent contrator. I wanted to get started with establishing my business credit, mainly because some of the rewards of business cards would be really good for my indepedent contract work.
I know about DUNS and EIN numbers, etc, establishing NET30 accounts, getting basic revolving accounts with a PG going. What Im looking for in terms of advice is somewhat tax and somewhat credit related. I of course could establish an LLC to make my business a real, totally seperate legal entity. I live in Florida however, where refiling with the state every year is required. Something like 150 bucks just to tell them nothing has changed. Furthermore, there was a recent court decision here (Florida) that said LLCs with only one person attached to it could have that one person made legally liable in the same way they are responsible for a sole proprietorship. Removing one of the main advantages of having an LLC.
So my question is basically, should I deal with the headaches of making an LLC? Is there anything business credit-wise that would make it worth it or should I just try to deal with the pain of establishing business credit as a home based sole proprietorship?
Given your particular case with a broader range of independent companies that you are working for I would say yes,
It is worth creating a business entity for the following reasons. 1) As an LLC you can actually take tax deductions on your business expenses with less concern of audit. As of 2018 you can no longer claim a hobby business as deductions and sole proprietorship must show income and pay appropriate tax on earning and must be profitable 3 of 5 years. 2) if you do and structure it properly the protections are there. You could own 99% of the company and put 1% in anyone else's name. Make sure you include your vehicle as part of business property. This will intern protects your personal property baring and unfortunate event in which you were sued. 3) Outside of the granted protections and the tax deductions you can easily expand other lines of business under your LLC shell.
Actually that will have the exact opposite affect. If the business is sued, they can take his business assets but not his personal assets. So putting the vehicle in the corporate name means it will be taken along with all the other business assets in a lawsuit. If you mean he can a vehicle in the LLC in the event that he is personally sued that is less likely to happen than the business being sued and that is unlikely to work either. Any half decent lawyer could easily pierce the corporate veil by finding just once instance of him using the company vehicle for personal use. Therefore proving the asset is not 100% for company use. Then a judge will decide how much of the vehicle was personal vs company and it will get sold to pay the "company portion" in a lawsuit.
Yes, if the vehicle is in the business name then the risk of loosing it if the business is sued is possible. The courts have upheld that a vehicle can be both personal and business use without holding personal responsibility under LLC(Within guidelines). However, if the vehicle is the primary mode of your business and is not under the company veil then it opens you up to be personally sued regardless of the company structure. Essentially the courts see it as you operating a sole proprietorship alongside of the business entity. You are still minimizing the personal exposure by covering it under an LLC. Personally I would rather loose a business vehicle than my personal savings, home, car and retirement.