Whats the leanest business type to sell online?

This is a "to each's own" type of question!

Full disclaimer: Not an Attorney! However, owned and operated a handful of LLCs and S-Corp in 3 different states (Texas, Tennessee, and Alabama).

A few questions I would ask myself! The first question is what state and/or county am I doing business in (Place of business)? This matters because of several factors e.g. taxes, franchise tax, etc...

Second, Do I want/need separation from the business or not? Difference between Sole Proprietor and LLC. In most cases, I would always separate because of two reasons mainly: keeps my business out of my personal money (easier to separate), and secondly allows for better growth with an LLC as in once you are making 50-80K per year you can turn into an S-Corp to stop using the LLC as a pass-through entity on your personal taxes, i.e. You take a salary now rather than distributions.

Third, you will constantly see and hear people saying something like "oh create your LLC in states like Delaware because of favoring business tax and laws". This is absolutely true just as I would take a hard look at Wyoming for LLCs as they relate to real estate. The biggest question for this issue is, "is it worth my time, extra expense, and headache to achieve this?" Because if you live in "Insert State name here" you still must pay taxes and file your registrations for each state your entity (business) is in. In most cases, this is too much for a small business. Now on the other hand if you are at series A+ funding then it may make sense to do that for sure.

How have I tackled this issue in the past? I created an LLC that shells either DBAs (doing business as) or other LLCs. Why, Because It's easier to separate each business from the other (think financial sheets) and I gain some limited liability between each if something were to happen like getting sued and whatnot (an LLC does not protect you like the short ended blog posts elate to and you still need to protect yourself for the industry you're in.

I know that is not the answer you were seeking but I hope it provides you with something to consider! I would start easy meaning find out what the cheapest and easiest business structure is for your state/county to do business as and it's extremely easy to move up as needed. Most people that use ZenBusiness or LegalZoom and have an LLC set up for them are completely lost in how to conduct business going forth and oftentimes spend more than needed to create a simple business structure. When you have the money coming in and available, then it would be a wonderful time to create something like an LLC or LLC/S-Corp as needed.

Using the money, you would have used to create an LLC with a done-for-you service you can take and use it toward something that actually provides you and your business with some legal protection, e.g. Terms, Copyright, Privacy, etc...

Say something nice to Mikejames…

2

This is a "to each's own" type of question!

Full disclaimer: Not an Attorney! However, owned and operated a handful of LLCs and S-Corp in 3 different states (Texas, Tennessee, and Alabama).

A few questions I would ask myself! The first question is what state and/or county am I doing business in (Place of business)? This matters because of several factors e.g. taxes, franchise tax, etc...

Second, Do I want/need separation from the business or not? Difference between Sole Proprietor and LLC. In most cases, I would always separate because of two reasons mainly: keeps my business out of my personal money (easier to separate), and secondly allows for better growth with an LLC as in once you are making 50-80K per year you can turn into an S-Corp to stop using the LLC as a pass-through entity on your personal taxes, i.e. You take a salary now rather than distributions.

Third, you will constantly see and hear people saying something like "oh create your LLC in states like Delaware because of favoring business tax and laws". This is absolutely true just as I would take a hard look at Wyoming for LLCs as they relate to real estate. The biggest question for this issue is, "is it worth my time, extra expense, and headache to achieve this?" Because if you live in "Insert State name here" you still must pay taxes and file your registrations for each state your entity (business) is in. In most cases, this is too much for a small business. Now on the other hand if you are at series A+ funding then it may make sense to do that for sure.

How have I tackled this issue in the past? I created an LLC that shells either DBAs (doing business as) or other LLCs. Why, Because It's easier to separate each business from the other (think financial sheets) and I gain some limited liability between each if something were to happen like getting sued and whatnot (an LLC does not protect you like the short ended blog posts elate to and you still need to protect yourself for the industry you're in.

I know that is not the answer you were seeking but I hope it provides you with something to consider! I would start easy meaning find out what the cheapest and easiest business structure is for your state/county to do business as and it's extremely easy to move up as needed. Most people that use ZenBusiness or LegalZoom and have an LLC set up for them are completely lost in how to conduct business going forth and oftentimes spend more than needed to create a simple business structure. When you have the money coming in and available, then it would be a wonderful time to create something like an LLC or LLC/S-Corp as needed.

Using the money, you would have used to create an LLC with a done-for-you service you can take and use it toward something that actually provides you and your business with some legal protection, e.g. Terms, Copyright, Privacy, etc...

jhart728

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4 years ago
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