4 ms·

Can't resist giving a shout-out to the sole proprietorship without outside funding. It's pretty amazing how much cheaper it has gotten to start a whole range o

Can't resist giving a shout-out to the sole proprietorship without outside funding. It's pretty amazing how much cheaper it has gotten to start a whole range of software businesses in the last three years.

tptacek 15y ago
Can you get insurance? Have you had trouble invoicing people without them withholding taxes on your behalf? Is your company liable for your bandwidth, hosting, and office expenses, or is your mortgage? Lots of smart people seem to use sole proprietorships, but I don't understand why. I mean that seriously, not rhetorically: this is something I don't understand. LLCs are comically easy to set up.
- idlewords 15y ago
  I told myself I would set up an LLC as soon as it had some practical benefit to me, and five years later... I don't mean that to be flippant. I can see many good arguments for it, including the ones you list, but in my specific circumstances (no clients to invoice, clear line between personal and business expenses) it has been simpler to remain a sole proprietor. That said, what I wanted to stress was the idea of not taking outside funding, however you choose to structure things.
  - tptacek 15y ago
    We are very much on the same page regarding funding, which is one of the things militating my LLC advocacy. If you think you can just get starting without goofing around with admin details and funding pitches, LLCs are great.
phil 15y ago
Are you personally liable for the services you provide? That seems scary, to say the least.
- idlewords 15y ago
  I am, but I guess I don't find it so scary.
  - tptacek 15y ago
    This sounds totally reasonable since you've thought it through, and you can always get an LLC before you do any kind of business that would change that calculation. I just want to advocate for the stance that, if you're not sure, you should err on the side of having limited liability. Your business is probably going to fold, and when it does, it's probably going to have liabilities.
    - idlewords 15y ago
      Even though it's completely hypocritical I wholeheartedly join you in your LLC cheerleading. Fast, easy, not expensive. What I've found by far the hardest as a one-person business is finding a lawyer and an accountant. It's hard to know where to start looking, and there's so much startup money sloshing around that it crowds out smaller fish like me.
- sdizdar 15y ago
  Please talk to the layer to understand liability for your particular business. As a officer of a company you are still personally liable for some things and D&O will not cover it. In other words, don't think incorporation will make your private assets 100% safe.
  - tptacek 15y ago
    You are particularly exposed when it comes to torts you personally have a hand in, and possibly for contracts where it can be entered in bad faith. That said: I'd be very surprised to hear a lawyer say that incorporation makes you more exposed. You make a good point, but I'm still pretty sure the default should be "incorporate somehow".
    - deleted 15y ago

tptacek 15y ago

Can you get insurance? Have you had trouble invoicing people without them withholding taxes on your behalf? Is your company liable for your bandwidth, hosting, and office expenses, or is your mortgage? Lots of smart people seem to use sole proprietorships, but I don't understand why. I mean that seriously, not rhetorically: this is something I don't understand. LLCs are comically easy to set up.

idlewords 15y ago
I told myself I would set up an LLC as soon as it had some practical benefit to me, and five years later... I don't mean that to be flippant. I can see many good arguments for it, including the ones you list, but in my specific circumstances (no clients to invoice, clear line between personal and business expenses) it has been simpler to remain a sole proprietor. That said, what I wanted to stress was the idea of not taking outside funding, however you choose to structure things.
- tptacek 15y ago
  We are very much on the same page regarding funding, which is one of the things militating my LLC advocacy. If you think you can just get starting without goofing around with admin details and funding pitches, LLCs are great.

phil 15y ago

Are you personally liable for the services you provide? That seems scary, to say the least.

idlewords 15y ago
I am, but I guess I don't find it so scary.
- tptacek 15y ago
  This sounds totally reasonable since you've thought it through, and you can always get an LLC before you do any kind of business that would change that calculation. I just want to advocate for the stance that, if you're not sure, you should err on the side of having limited liability. Your business is probably going to fold, and when it does, it's probably going to have liabilities.
  - idlewords 15y ago
    Even though it's completely hypocritical I wholeheartedly join you in your LLC cheerleading. Fast, easy, not expensive. What I've found by far the hardest as a one-person business is finding a lawyer and an accountant. It's hard to know where to start looking, and there's so much startup money sloshing around that it crowds out smaller fish like me.
sdizdar 15y ago
Please talk to the layer to understand liability for your particular business. As a officer of a company you are still personally liable for some things and D&O will not cover it. In other words, don't think incorporation will make your private assets 100% safe.
- tptacek 15y ago
  You are particularly exposed when it comes to torts you personally have a hand in, and possibly for contracts where it can be entered in bad faith. That said: I'd be very surprised to hear a lawyer say that incorporation makes you more exposed. You make a good point, but I'm still pretty sure the default should be "incorporate somehow".
  - deleted 15y ago