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Ask HN: Starting Your Own LLC?

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Re: Ask HN: Starting Your Own LLC?

#21

Post by eropple »

tptacek wrote: post #17
eropple wrote: post #4

One lead-in question: are you in the USA? If not, most advice is going to be fraught as hell. Assuming you are: this is a well-paved path these days. A few things as they come to mind (and, disclaimer, I am not an expert, I've just done this before): - Any advice you read here, including mine, should be immediately superceded by that of your tax professional or your lawyer. If you do not have a tax professional, I st…

I'm not sure what the benefit of an S-Corp is over an LLC these days, because LLCs are simpler and can elect to file taxes as an S-Corp. It might be more straightforward to issue equity to employees as an S? But our legal (Grellas Shah) was emphatic that anything we wanted to do w/r/t/ employee equity compensation was going to be doable in an LLC if we wanted it that way.

Neither am I. My understanding is that it's more of a pain to deal with equity distribution for an LLC, but it is doable (the other LLC I own a bit of has done it a couple times to add new members).

S before C is more the amount of nonsense involved in a C-Corp unless you're getting investor money.

Re: Ask HN: Starting Your Own LLC?

#22

Post by SamWhited »

edwhitesell wrote: post #3

I've used LegalZoom twice. Once for a corp, another for an LLC, it was easy both times. Other than that, I'd say it's helpful to have a good CPA.

Please don't use these sorts of services. Even if you technically can be savvy and avoid all their fees and things, they're dishonest and try to tack them on constantly for things you may or may not need (eg. for making them a registered agent, unnecessary credit checks, etc.). Even if it is possible to make it work and avoid most of this, don't support their business model. Chances are you'll pay more in hidden fees than just learning to do it yourself (which is probably find if you're just filing an LLC, not fine if you need advise on whether an LLC is the right business vehicle for you) or the few hundred dollars a lawyer will charge you to file an LLC.

Re: Ask HN: Starting Your Own LLC?

#24

Post by tidwall »

Sounds like you want a Single Member LLC. This is the easiest to start. From a tax perspective you can file as a Disregarded Entity, which means you'll report taxes your (the owner's) personal tax return.

I've started a few different business this way and the nicest thing about a disregarded entity is that if you need to sell or fold the business, you won't have any complicated forms to fill out with the IRS. You just stop reporting the following year.

Re: Ask HN: Starting Your Own LLC?

#25

Post by kjksf »

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 business that is different that your own.

An LLC is a significant step-up in terms of complexity and cost and many people cargo cult it (i.e. they think they need an LLC for reasons they can't put into words but it's something what other people are doing).

Re: Ask HN: Starting Your Own LLC?

#26

Post by chasingthewind »

I used to work at a company that did incorporations so I may simply be parroting the company sales pitch here, but I did get the honest impression that finding a company that helps you incorporate can really save you some huge headaches later on. The state where you incorporate can have a huge impact on a number of things and a company that specializes in this can steer you clear of some minefields. It will cost more but I think it's very likely to be worth it.

Re: Ask HN: Starting Your Own LLC?

#27

Post by waffle_ss »

tptacek wrote: post #20
ahnick wrote: post #7

I hate how this information is so spread out so I will try to condense this: (1) Register your domain name and setup email (GSuite is simple enough). I put this first, because it is nice to have all the business communications actually going to the business email, so you don't start intermixing with your personal email. (2) Next, I'd recommend hiring a local lawyer for the LLC filing and paperwork, not because you ca…

That S-Corp trick, the "reasonable compensation" thing, is an audit flag; there is apparently a whole specialized kind of audit the IRS does for "reasonable compensation" claims (presumably because it's so easy to spot mechanically; your single-member firm made X, you claimed X-n income, X-n>threshold: audit). I wouldn't bother with it.

When I was a self-employed contractor several years ago my CPA did it this way for my LLC. 50% of the income went on a W-2 and 50% on a K-1. It's up to each person to decide their own risk level but my CPA was pretty confident it wasn't a big deal as long as the W-2 salary wasn't absurdly low, and my own googling at the time seemed to confirm that.

It's definitely worth it IMO since you're double-paying FICA taxes on your W-2 (i.e. paying both the employee + employer sides).

Re: Ask HN: Starting Your Own LLC?

#28

Post by gshdg »

mdorazio wrote: post #13

1) Doing taxes correctly as anything other than a sole proprietorship is a huge pain in the ass, especially if you're selling things across state borders, and doubly so if you're in California. I recommend finding a tax professional to handle that for you (the time it takes to do it yourself is generally not worth it). Also don't forget that if you're actually making money you'll need to pay estimated taxes quarterly…

Note that a single-person LLC can file taxes as a pass-thru entity, which is essentially the same as a sole proprietorship. You do still need to separate your finances/accounts/etc tho.

Re: Ask HN: Starting Your Own LLC?

#29

Post by zubspace »

What would you fine people advice for a single guy making money through a website in Europe? What kind of corporation? At how much revenue do I need to think about that? How much money (and time) does it cost per year? How does it differ among EU countries? What do I need to take care of, when I take money from customers around the world?

Re: Ask HN: Starting Your Own LLC?

#30

Post by busterarm »

gshdg wrote: post #28
mdorazio wrote: post #13

1) Doing taxes correctly as anything other than a sole proprietorship is a huge pain in the ass, especially if you're selling things across state borders, and doubly so if you're in California. I recommend finding a tax professional to handle that for you (the time it takes to do it yourself is generally not worth it). Also don't forget that if you're actually making money you'll need to pay estimated taxes quarterly…

Note that a single-person LLC can file taxes as a pass-thru entity, which is essentially the same as a sole proprietorship. You do still need to separate your finances/accounts/etc tho.

Being a single-person LLC usually doesn't give you any of the legal advantages of having an LLC in case you get sued.
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