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Ask HN: Starting Your Own LLC?

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Re: Ask HN: Starting Your Own LLC?

#101

Post by bsamuels »

theturtletalks wrote: post #52
kjksf wrote: post #25

It's also worth noting that you don't need an LLC to "channelize your creative endeavors". You can take money from other people for goods and services you provide without any legal structure behind it. IRS has forms to report such income (and related business expenses). A step-up is a DBA registration in your city hall. It's still just you, nothing changes from point of view of IRS, you can just use a name for your b…

LLC stands for limited liability company. What makes it different than a DBA is that a LLC gives you limited liability. If your LLC is sued, you're protected personally from losing assets. Regardless, many people don't need it and a DBA suffices until the liability gets too high.

You also have to pay $800/year in franchise tax if you run an LLC in California, regardless of income. If OP is just making an etsy or something, he does not need an LLC.

Re: Ask HN: Starting Your Own LLC?

#102

Post by PopeDotNinja »

Spending money on legal entities for is an expensive way to find out you have no know idea what you are doing (speaking from personal experience here). My guidance is worry about driving revenue. If you have a customer that wants to give you money, that is a great time to figure out what you actually need. Everyone will take your money and sell you something that sounds like what you wanted. It doesn't take that long to set up a legal entity, and even paying more for a rush job will be cheaper than starting the wrong legal entity now.

Re: Ask HN: Starting Your Own LLC?

#103

Post by PopeDotNinja »

theturtletalks wrote: post #52
kjksf wrote: post #25

It's also worth noting that you don't need an LLC to "channelize your creative endeavors". You can take money from other people for goods and services you provide without any legal structure behind it. IRS has forms to report such income (and related business expenses). A step-up is a DBA registration in your city hall. It's still just you, nothing changes from point of view of IRS, you can just use a name for your b…

LLC stands for limited liability company. What makes it different than a DBA is that a LLC gives you limited liability. If your LLC is sued, you're protected personally from losing assets. Regardless, many people don't need it and a DBA suffices until the liability gets too high.

> If your LLC is sued, you're protected personally from losing assets.

A lawyer friend once told me that anyone can sue anyone at any time for anything. A good lawyer will sue the LLC and the owner of the LLC. Even if the defendant is found to not be liable, it won't feel like a victory when the invoice from the defendant's attorney arrives.

Re: Ask HN: Starting Your Own LLC?

#104

Post by csa »

OrgNet wrote: post #73
patio11 wrote: post #39

Earlier quoted context omitted.

Ask a simple question, get a simple answer: yes. Simplest possible illustration: Japan's equivalent of an LLC costs +/- $10k in running costs for most HNers and doesn't do pass-through taxation, which might counsel sole proprietorship for longer here than it would in the US.

He was asking about an LLC from USA... not an LLC from Japan... And I was asking about the cost difference for an LLC created in the USA by an outsider VS an American citizen... I guess it was not so simple after all... (you just misunderstood the simple question). How about candies? Do they poison people?

He used an example of Japan as an illustration of why it is important to know the location of the person asking the question.

You seem to be new here (73 days). Note that 'patio11 has been here for 11 years and is one of HNs top posters. Not that longevity makes someone right, but 'patio11's posts have been high quality for many years, and one should assume that he is probably not pulling a reply out of his ass when he does reply.

While not every poster on HN posts high quality replies, most people here reply with a clear purpose. This is not Reddit -- I encourage you to assume that most replies are actually substantive. If you are not sure, check the poster's history -- this will help you get a feel for the potential quality of their posts.

Welcome to HN, and good luck with your endeavors.

Re: Ask HN: Starting Your Own LLC?

#105

Post by argyleaf »

patio11 wrote: post #41

I wrote answers for a number of these questions for Stripe Atlas; c.f. https://stripe.com/atlas/guides/incorporation , https://stripe.com/atlas/guides/business-taxes , and the https://stripe.com/atlas/guides more generally. If there are holes after reading them, we'd love to hear about them.

From your first link, the link to the WilmerHale [0] article is a 404.

[0] https://www.wilmerhale.com/uploadedFiles/Shared_Content/Edit...

Re: Ask HN: Starting Your Own LLC?

#106

Post by hayksaakian »

riku_iki wrote: post #79
hayksaakian wrote: post #5

Earlier quoted context omitted.

I've skimmed through it, and it's a fine guide if you're starting a traditional startup that plans to raise money. If you're starting any other kind of business it's a little over kill. Generally registering an LLC, applying for a business license and then requesting a Tax ID number from the IRS is really all you need for a web based business of 1 person.

> applying for a business license what is it for " a web based business"?

I guess I'm not really understanding your question.

In order to legally do business and report on your taxes (in washington state for example) you need to register your entity as a business with the state -- in the form of a business license.

I only used the phrase "web based business" assuming you have no physical property (retail) or employees which add additional licensing requirements and more complexity.

Re: Ask HN: Starting Your Own LLC?

#107

Post by CPLX »

wheelerwj wrote: post #80
CPLX wrote: post #51

Earlier quoted context omitted.

This statement is obviously incorrect. It’s literally the name of the thing, the two L’s stand for “limited liability”

its limited, NOT absolute. If you are a single person LLC the claim can be made that the business is an alter-ego of the owner, and can then the corporate veil can be pierced.

I mean of course. But that’s true of all corporations.

If you conduct the business in a businesslike manner and keep proper separation of personal issues, and keep required records to document its corporate actions then you have the law’s liability protection.

That’s also true for a 2 or 200 member LLC.

Re: Ask HN: Starting Your Own LLC?

#108

Post by OrgNet »

csa wrote: post #104
OrgNet wrote: post #73

Earlier quoted context omitted.

He was asking about an LLC from USA... not an LLC from Japan... And I was asking about the cost difference for an LLC created in the USA by an outsider VS an American citizen... I guess it was not so simple after all... (you just misunderstood the simple question). How about candies? Do they poison people?

He used an example of Japan as an illustration of why it is important to know the location of the person asking the question. You seem to be new here (73 days). Note that 'patio11 has been here for 11 years and is one of HNs top posters. Not that longevity makes someone right, but 'patio11's posts have been high quality for many years, and one should assume that he is probably not pulling a reply out of his ass when…

I didn't know that all countries used the LLC term (or more then one)... specially not Japan which I expected them to use Japanese characters... I guess that they have been successfully Americanized. Sorry for the confusion.

BTW I know that this is not reddit but there is about as much censoring, if not more (there is just more users on reddit).

Also, I see that your account was created in 2013... did you create any throwaway account since then? (this account, for me, is a throwaway account)

Conflict: do you work for the economist.com ? most of your submissions appear to point there

but thanks for the insight as to why I get all the downvotes...

Re: Ask HN: Starting Your Own LLC?

#110

Post by winter_blue »

winter_blue wrote: post #97
patio11 wrote: post #41

I wrote answers for a number of these questions for Stripe Atlas; c.f. https://stripe.com/atlas/guides/incorporation , https://stripe.com/atlas/guides/business-taxes , and the https://stripe.com/atlas/guides more generally. If there are holes after reading them, we'd love to hear about them.

patio11, I have a bunch of questions about Stripe Atlas (sorry that this is long): - Should a subsidiary of a foreign company be an LLC or C Corp? I've read https://stripe.com/atlas/guides/llc-vs-c-corp and if I were to own the company directly, I certainly would go for a C Corp to avoid having to report the company's taxes on my personal U.S. tax returns. But it's not clear to me whether it's better for a subsidiary…

I've found out Stripe wasn't even necessary to begin with. There are plenty of payment gateways (double-digit number of them) in the jurisdiction where the foreign parent entity would be located. Moreover, Stripe is actually offered in a lot of countries besides the U.S.! The post https://hackernoon.com/stripe-atlas-is-not-for-everyone-cave... made some really good points, including this:

> Unless you have a really crappy situation with respect to payment processing, regulations etc., that are real roadblocks for competing internationally, I do not recommend setting up company for the romanticised notion of using a particular gateway.

I made that mistake of romanticizing Stripe. I was too hasty, and didn't bother to do some basic research. Customers just want an easy way to pay, and definitely don't care what gateway you choose to use. As far as setting up an American company/subsidiary goes, it's not worth the trouble. Reading https://stripe.com/atlas/guides/business-taxes alone was eye-watering and migraine-inducing. The plethora of complicated tax rules are absolutely not worth enduring just to use one particular payment processing system.

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