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Poll: Do you have your own company?

news.ycombinator.com

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Re: Poll: Do you have your own company?

#81

Post by Osiris »

icedchai wrote: post #49
adamb_ wrote: post #32

I'm considering making the transition from sole proprietor to LLC for my on-the-side consulting... Advice from friends range from "it's a no-brainer!" to "it's more trouble than it's worth". I don't make a lot doing my side-work (under $10k), but the amount has grown year-over-year. Any advice on incorporating?

for one guy, don't bother unless you want extra paperwork.

I did some research into incorporating an LLC and I came to the same conclusion. For a sole owner, a sole proprietorship is simpler and the LLC doesn't provide any benefits but does add a lot of extra tax and other paperwork.

Re: Poll: Do you have your own company?

#82

Post by mjolk »

will_brown wrote: post #16
mjolk wrote: post #8

I voted twice. I run a startup company that provides consulting services and acts as an incubator for in-house ideas. If one of the side projects grows large enough that it starts making "real" money, it will get its own LLC and DBAs to separate the liability from parent's core business of consulting. I'm in NY, which is home to one to publication requirements, so I only form LLCs for projects when the potential for…

Check out this old comment I posted: https://news.ycombinator.com/item?id=7031842 I described a hack my old employer (a law firm) utilized to accomplish the NY LLC publication requirement. Pretty cost effective, total was $519.90 to organize/file the LLC with the NY Secretary of State and complete the publication requirement.

I know about that hack, but I'm not sure I'd advise others to follow suit. You end up spending a non-trivial amount of money in fees and there's definitely a legal and time cost involved. IIRC, there's a couple of other issues that are pretty trivial for a law firm to smooth out, but not something you'd want to deal with if you're paying your legal costs per engagement or hour.

For what it's worth: "this runs counter to the general principal of SV where they are pro-Corp."

I believe this is because in California, there's a minimum tax of $800 on LLCs, so you might as well become a big boy corporation and not eat the 13.3% profit fee, get lower taxes (and/or or tax "hacks" (cheats)), and (especially pertinent to VCs) be able to be publicly traded.

Re: Poll: Do you have your own company?

#84

Post by will_brown »

madengr wrote: post #72

Yes - I "had" an LLC for engineering consulting work. I let it lapse though as it wasn't worth renewing it with the state every year if I wasn't doing much business. I'd have to quit my day job to do real work or else be fired & sued by my employer. We hired nanny for one year when my wife went back to work. The tax and paperwork nightmare of having even a single employee for a small business makes me never want to d…

You touch on a very unusual aspect of corporate law...Dissolution

I will not provide any legal advice here, but the concept of letting "it lapse" verse filing articles of dissolution with the State to wind down the business can have significant impact on liabilities/legal rights of the owner/directors/officers/entity. I have seen very bizarre situations where each was the right thing to do under a given set of facts.

Re: Poll: Do you have your own company?

#85

Post by dragonwriter »

will_brown wrote: post #70
patio11 wrote: post #43

Two LLCs, one for Appointment Reminder and one for everything else. The separation is exactly because AR has potentially high liability in event of a HIPAA incident and, while I'm insured against it, I don't want DHS to have a claim on substantially all of my business assets in the event that everything goes wrong. I go back and forth on whether I want to take investment at some point. At the moment, mostly working o…

I do not want to make assumptions, but because your concerns are regarding potential liability (and rightfully so)if those are single member LLCs (you are the sole owner), then you will not be receiving the limited liability legal protection generally associated with the LLC.

AFAICT, generally (and, of course, as this is mostly a state law question, there will be variations in details from state to state), the single member of a Single Member LLC (SMLLC) receives the same protection from liability as those of a multi-member LLC (or shareholders of a corporation), but in many states an SMLLC is not as protected from liability for the personal debts of its single member as is the case with a multi-member LLC.

Single member LLCs may be more likely to have defective LLC operating agreements (apparently, a common error is to use a template agreement designed for a multi-member LLC) or be more prone to having the owner engage in the kind of behavior that would permit piercing the corporate veil, but that's not the same thing as the SMLLC form not having the same protection as other LLCs.

EDIT: Just to reiterate a point others have made in this thread, if you are making a decision on this for a business you plan to run, do consult an attorney knowledgeable in the laws of the jurisdiction you plan to operate in. Big picture discussions may give you an idea of the landscape and the concerns you need to be aware of, but you don't want to find out too late that a critical detail wasn't covered, and a couple paragraphs on HN aren't going to cover all (or, likely, even a sizable fraction) of the salient details of business law relevant to your circumstance.

Re: Poll: Do you have your own company?

#86

Post by opendais »

will_brown wrote: post #70
patio11 wrote: post #43

Two LLCs, one for Appointment Reminder and one for everything else. The separation is exactly because AR has potentially high liability in event of a HIPAA incident and, while I'm insured against it, I don't want DHS to have a claim on substantially all of my business assets in the event that everything goes wrong. I go back and forth on whether I want to take investment at some point. At the moment, mostly working o…

I do not want to make assumptions, but because your concerns are regarding potential liability (and rightfully so)if those are single member LLCs (you are the sole owner), then you will not be receiving the limited liability legal protection generally associated with the LLC.

Are you talking about the Federal bankruptcy issues, differences in state law, etc?

http://www.keytlaw.com/azllclaw/asset-protection/single-memb...

I think this has a good summary of the potential pitfalls.

Re: Poll: Do you have your own company?

#87

Post by Smudge »

theandrewbailey wrote: post #47

The pressure to create your own company in the tech world is insane. Even during college, I remember one instructor saying that he expected everyone to start a company or two. The problem is that I'm idea bankrupt. Everything I've thought about has been done already. That feeds into the negative feedback/lazyness cycle I'm stuck in.

> Everything I've thought about has been done already. That feeds into the negative feedback/lazyness cycle I'm stuck in.

Here's something I've learned.

Truly novel ideas--something that nobody else has ever thought of--are extremely uncommon. Like, once-in-a-lifetime uncommon. If you're waiting for the day when your biggest contribution to humanity is an original idea, you'll find only disappointment.

But that doesn't mean you can't be successful (whatever that word may mean for you). Most of the world's "innovations" simply rehash existing ideas, but do so in a way that stands out above the rest. To make something great like that takes a combination of talent and experience. While you can't exactly control for raw talent, you can, given time, build the requisite skills and experience.

This--for me and I hope for you too--is extremely encouraging. It allows me to dive deeply into my work and, yes, my ideas, without worrying about how original they are or if others are doing the same. Knowing that I can be successful if I work hard enough--all without ever having an original thought enter my head--takes a lot of the pressure off and allows me to free up space to be creative without worrying about the repercussions. As a result, and contrary to what you might expect, this makes it more likely I'll one day have that crazy idea that nobody else had.

This is only my experience, of course. But my hope is that you'll realize it's okay and perfectly normal to be, as you described, "idea bankrupt," as long as you realize that ideas aren't your only currency.

Re: Poll: Do you have your own company?

#88

Post by gadders »

desarun wrote: post #38
zippergz wrote: post #17

If people are open to it, I would really love to hear some anecdotes about making the transition from working for a big tech company to doing independent consulting. It seems very hard (often forbidden by the company) to pick up clients on the side while being an employee, but quitting a job without any clients is pretty scary. And I'm not even clear where to find clients (who will pay a reasonable rate).

Hey there. I made the jump last week. I work in London, and used to work for a FTSE 35 company. I was there for about 2 years, and worked primarily as an Android developer. I'm not sure about the situation where you are, but here in London there's tons of Android contracts. I made the decision to jump about a month and a half ago after getting screwed over a promotion that was promised to me. Any loyalty I had to the…

>> The one thing holding me back the most, and probably the reason I didn't land a job sooner was that in contracting land, you're expected to start pretty much the next day, and I had a 2-4 week wait before becoming available.

This can be true, but can also be a load of cobblers from recruitment agents. On top of that if you contract in banking, the reference/background/credit checks take at least 2-3 weeks anyway.

>> Oh, and don't trust recruiters. They're a necessary evil.

I'd change that to "don't trust all recruiters". If you can find a good one that tells you the truth, stick with them.

Re: Poll: Do you have your own company?

#89

Post by api »

https://www.zerotier.com/

Right now this is a side project, though it does have billing enabled and an LLC. I'm not sure if this is going to turn into a high-growth funded thing or a lifestyle business. Part of that depends on what I want, and part of it depends on how much traction I get when I start really promoting it.

So far it's got about a hundred regular users with basically zero advertising beyond a few posts and word of mouth promotion. That's been intentional -- I've wanted a small group of beta testers to make sure there are no major issues. With the most recent update and completely new site design I plan to start really advertising and promoting and seeing what happens.

So far reaction has been very positive from a lot of people, so I'm encouraged.

Re: Poll: Do you have your own company?

#90

Post by will_brown »

viggity wrote: post #79
will_brown wrote: post #70

Earlier quoted context omitted.

I do not want to make assumptions, but because your concerns are regarding potential liability (and rightfully so)if those are single member LLCs (you are the sole owner), then you will not be receiving the limited liability legal protection generally associated with the LLC.

why would that be, as long as you don't co-mingle personal funds with business funds and otherwise treat it as a legitimate, independent and separate business, I don't understand how you could be held liable. http://en.wikipedia.org/wiki/Piercing_the_corporate_veil

Google "asset protection of single member LLC" to find a trove of scholarly/legal articles on the subject, add your State for State specific explanation.

Basically, the LLC derives its existence from "partnership laws", just as it sounds partnerships entail two or more owners. As a result, the majority (if not all) States have case law on point where the Courts do not extend asset protection where there is only 1 owner of the LLC.

Here is the Florida Supreme Court Case on point, but I am certain you will find a similar case in most other jurisdictions, and if you do not find a case from your state, more likely than not it is because they did not hear a similar case yet (LLCs have only been existed in the US since 1977, and States slowly adopted the concept over time), not because they have case law going the other direction: http://assetprotectionworld.com/wp-content/uploads/2012/06/O...

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