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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
by adamb_ 12y ago
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?
- tragic 12y agoMost advice would be jurisdiction specific. General advice: get a good accountant, whose job it is to know stuff like that, and keep apprised of when it changes.
- will_brown 12y agoAdvice: consult with an attorney. More generally, if you are considering the LLC for legal protection, I would not advise the LLC if you will be the sole owner (aka single member LLC), despite the name you will generally not receive limited liability protection. As an attorney I always take a very conservative approach when it comes to legal protection.
- andrewfong 12y agoLLC makes sense if you're worried about potential downside from your consulting arrangements -- e.g. how much are you on the hook for if you fail to deliver? LegalZoom or RocketLawyer is probably fine for getting set up initially -- talk to an actual lawyer if you end up hiring someone or subcontracting work out to people. Talk to accountant about tax hassles with LLCs.
- whitef0x 12y agoSadly though, for us Canadians there is no LegalZoom or RocketLawyer (although I might be totally wrong on this one!) So its either like a few thousand to setup an INC (LLC's don't exist here) or go the cheap but high liability route with a sole proprietorship.
- icedchai 12y agofor one guy, don't bother unless you want extra paperwork.
- Osiris 12y agoI 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.