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Forming an LLC is cheap and easy, but be sure to keep up with paperwork. I showed our "books" to an accountant and he told me that if we ever went to court wit
by MicahWedemeyer 18y ago
Forming an LLC is cheap and easy, but be sure to keep up with paperwork. I showed our "books" to an accountant and he told me that if we ever went to court with that, our LLC status would be stripped away immediately and we'd be personally liable on everything.
- aasarava 18y agoMicah, could you share a little more about what state your books were in and what you would have done differently?
- MicahWedemeyer 18y agoWell, the books were in the "nonexistent" state. We had a bunch of receipts from web hosting providers, plus maybe $100 in ad revenue. We wanted to declare all the hosting costs as a loss on our income taxes. The accountant recommended setting up QuickBooks online, I believe. The basic idea is to track each and every bit of income and expenditure. It can be a real pain, but that's what it means to run a business. Note: We're still in the "nonexistent" state now, because we just never get around to it. So, don't listen to my advice!
- tstegart 18y agoGood advice Micah. A lot of people think once they sign the LLC document they're magically protected and can just ignore it until something comes up. One of the advantages of LLC's over C-Corps is that they get rid of a lot of the formalities, but that doesn't mean you get to ignore everything. There are a few things that can get you in trouble, but like you mentioned, mixing your books is a HUGE deal.
- MicahWedemeyer 18y agoYep, magically protected. That's what we thought :)