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 Topic: Should I Inc, LLC, self proprietor? |
 
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mograz
Newbie
Joined: 06 October 2006
Location: United States
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Posts: 1
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| Posted: 06 October 2006 at 4:08pm | IP Logged |
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I am new to this forum and would appreciate any form of advice you have about setting up a PO company. Is it recommended that I start as a self proprietorship, or incorporate. Do I even need to formally get a business license? I heard you can use your social and be okay, as long as you file a 1099 every year?
Is it necessary to get an accountant to set me up?
Any advice or personal experience given would be great.
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Ramona Creel
Admin Group
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Joined: 24 March 2006
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Posts: 25
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| Posted: 09 October 2006 at 9:06am | IP Logged |
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Your choice of business entity needs to be based on your tax situation, financial goals for your business, and your concern about risk. The reasons to incorporate are for favored tax status and to protect you from liability with "the corporate veil" (if someone sues you, it's harder to attach your personal assests). But there are disadvantages to incorporating, it's more expensive, and you will have larger recordkeeping responsibilities. You really need to speak to an attorney and a CPA to make the right decision.
In answer to your second question, you absolutely need a business license if you are going to run a business. Just using your social security and filing a 1099 may be enough for the IRS, but your local city or county has regulations about unlicensed businesses operating in the area -- and they also want their annual fee. You may be able to get away without a license for a while, but I know someone who was busted a few years into their business, and the cost in fines and fees and interest WAY outweighed what he would have paid if he had done everything "legal" from the beginning. I say, better safe than sorry!
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