I have a number of side project business ideas I'd like to get off the ground in addition to my freelance work. Is it better to get started as a sole proprietorship or a LLC corporation? Can I run multiple side project businesses under a single sole proprietorship name? Pros? Cons? Anyone have a related experience?
Ask HN: Sole proprietorship vs. LLC?
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Re: Ask HN: Sole proprietorship vs. LLC?
#2If you have a legal business entity, you can do as many different kinds of business under that name as you want, but they all share the risk. Meaning, if someone falls and breaks their leg on your rental property, if one business owns all your rentals and your web business besides, it is all at risk in a lawsuit. Only when you need to isolate risk is it worth it to have multiple business entities in my opinion.
The usual advice has been in the past to start as a sole proprietorship and then incorporate later. This advice is changing, as it is really super easy (and cheap) to start an LLC these days. I started as an LLC. Usually it costs about a hundred bucks and doing some paperwork once a year, and that's it. And from the IRS' point of view, an LLC can be treated as almost anything else, so a single-member LLC can just be a passthrough entity where everything ends up on your own tax return just as a sole proprietorship would.
Re: Ask HN: Sole proprietorship vs. LLC?
#3For most freelancers an S-Corp is the best option as it allows you to duck some FICA taxes on a portion of your income. This is under the assumptions that you are in the US and are a US citizen
Re: Ask HN: Sole proprietorship vs. LLC?
#4Where are you located? LLCs exist in many different jurisdictions and they mean more or less the same but for tax purposes the difference from location to location differ greatly.
Re: Ask HN: Sole proprietorship vs. LLC?
#5Where are you located? LLCs exist in many different jurisdictions and they mean more or less the same but for tax purposes the difference from location to location differ greatly.
In the US, in NJ, the cost for an LLC in NJ is $125, http://www.state.nj.us/treasury/revenue/gettingregistered.ht...
Re: Ask HN: Sole proprietorship vs. LLC?
#6For most freelancers an S-Corp is the best option as it allows you to duck some FICA taxes on a portion of your income. This is under the assumptions that you are in the US and are a US citizen
What are the benefits of an S-Corp over an LLC when it comes to freelancing and a side business?
Re: Ask HN: Sole proprietorship vs. LLC?
#7For most freelancers an S-Corp is the best option as it allows you to duck some FICA taxes on a portion of your income. This is under the assumptions that you are in the US and are a US citizen
What are the benefits of an S-Corp over an LLC when it comes to freelancing and a side business?
If you have no revenue none, if you have revenue you get to keep 8% of a significant portion of it, instead of giving it to the government.