Ask HN: Starting Your Own LLC? • Hacker News Board

Re: Ask HN: Starting Your Own LLC?

#71

Post by ksdale » Sat, May 25, 2019, 8:36 PM UTC

ioddly wrote: post #64

ksdale wrote: post #56

Earlier quoted context omitted.

Being a single person LLC absolutely does gives you the legal advantages of an LLC, provided you maintain separation of personal and business, eg keeping business bank accounts and routing all income and expenses through them, keeping proper accounting books, signing contracts as the LLC and not as yourself, holding company meetings w/ minutes, etc. In practice this protection isn’t worth as much as it is for larger…

> holding company meetings w/ minutes How do you hold meetings with minutes in a single person LLC? With clients/subcontractors/advisors maybe? I'm not being sarcastic, my accountant wants me to form an LLC and if doing this helps with liability I'd be happy to go through the ceremony of it.

Haha it is rather ridiculous, but you can formalize big company decisions in a sort of company secretary’s binder. Honestly though, keeping the finances and contracts separate will basically always be enough to avoid personal liability. Basically you just want everything to be partitioned enough that no one you do business with would ever think that they are dealing with you in a purely personal capacity rather than as a representative of your company.

Re: Ask HN: Starting Your Own LLC?

#72

Post by WillPostForFood » Sat, May 25, 2019, 8:49 PM UTC

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…

If you have no assets then you may not have anything to protect and an LLC can be a waste. But if you have a family, a house, and some savings to protect, then it is very easy to put into words why an LLC is important. LLCs are cheap and easy insurance. Where I might agree about cargo cults is the Delaware Corp.

Re: Ask HN: Starting Your Own LLC?

#73

Post by OrgNet » Sat, May 25, 2019, 8:51 PM UTC

patio11 wrote: post #39

OrgNet wrote: post #34

Earlier quoted context omitted.

Just wondering, does it make a big difference?

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?

Re: Ask HN: Starting Your Own LLC?

#74

Post by SkyPuncher » Sat, May 25, 2019, 8:54 PM UTC

busterarm wrote: post #30

gshdg wrote: post #28

Earlier quoted context omitted.

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.

This is absolutely not correct.

The caveat, is you must operate like a business - including proper insurance levels. If you're not acting like a business, then you don't get business-like protections.

Source: Single member LLC who has discussed the issue with my lawyer.

Re: Ask HN: Starting Your Own LLC?

#75

Post by m0zg » Sat, May 25, 2019, 9:15 PM UTC

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.

While true, for solo LLCs in particular such "protection" can be incomplete. I'd advise folks to consult with a lawyer before embarking on anything risky.

Re: Ask HN: Starting Your Own LLC?

#76

Post by m0zg » Sat, May 25, 2019, 9:19 PM UTC

C00L wrote: post #63

I've helped hundreds of creatives figure out their formation + taxes in the past couple of years. Here're my top learnings: - LLC formation is not just filing the article of organization. Make sure to get an EIN, an operating agreement (Google operating agreement + your state for templates), get a business license, open a business bank account ( https://www.azlo.com is great), make initial contribution (don't worry,…

To add to the point regarding 401k. As a business owner you can set aside something like 56K a year in 401k pre-tax (not to exceed 25% of gross income IIRC). Go to Fidelity and Vanguard and search for "Solo 401k" to get started.

Re: Ask HN: Starting Your Own LLC?

#77

Post by chrisan » Sat, May 25, 2019, 9:45 PM UTC

Isn't Delaware $300 a year to have an LLC there?

Shouldn't you pick a state that has little to no annual filing fee?

https://www.llcuniversity.com/llc-filing-fees-by-state/

Re: Ask HN: Starting Your Own LLC?

#78

Post by riku_iki » Sat, May 25, 2019, 9:49 PM UTC

SkyPuncher wrote: post #74

busterarm wrote: post #30

Earlier quoted context omitted.

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

This is absolutely not correct. The caveat, is you must operate like a business - including proper insurance levels. If you're not acting like a business, then you don't get business-like protections. Source: Single member LLC who has discussed the issue with my lawyer.

What would be proper insurance level for typical SaaS?

Re: Ask HN: Starting Your Own LLC?

#79

Post by riku_iki » Sat, May 25, 2019, 10:14 PM UTC

hayksaakian wrote: post #5

chrisked wrote: post #2

The Clerky handbook is worth a read: https://handbook.clerky.com/ They offer services for incorporation too. Never used them so cannot speak about their service level. Seems to be a preferred choice for some YC startups. Then of course there is LegalZoom. They are around since 2001.

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"?

Re: Ask HN: Starting Your Own LLC?

#80

Post by wheelerwj » Sat, May 25, 2019, 10:15 PM UTC

CPLX wrote: post #51

busterarm wrote: post #30

Earlier quoted context omitted.

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

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.