LLC vs Sole Prop?

kmiklas

kmiklas

Heya Peeps,

Is there any advantage of forming an LLC?

In the past I've run contracts through a Sole Proprietorship, aka fictitious business name.

What are the key advantages of incorporating as some form of LLC?

Thanks, Keith
 
kmiklas said:
Heya Peeps,

Is there any advantage of forming an LLC?

In the past I've run contracts through a Sole Proprietorship, aka fictitious business name.

What are the key advantages of incorporating as some form of LLC?

Thanks, Keith
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The corporate veil. You cannot be held personally liable for anything your business does. And a little more tax manipulation.

Like for example, you have a business, you dont personally make money so you could also get on government assistance. Manipulation like that - but in a legal way.
 
Let's say you netted $120k one year writing code or whatever. With a Sole Prop setup, all $120k would be subject to self-employment tax, which is 15.3%. But if you set up an LLC, the business could pay you a reasonable salary of $60k and the remaining $60k could be taken as a profit "distribution". Distributions that you take from the business are not subject to self-employment tax. So in this example, by operating through an LLC you're saving yourself about $9k in taxes.
 
If I were you I would consult an attorney and not trust anything said in such a forum. I have a close friend who has been a software developer for his entire life and he carries insurance when he develops software for others under an LLC. I don't believe it's totally correct or true to say "you cannot be held personally liable for anything your business does". A judge in court will make that determination, not just because you have a piece of paper saying your an LLC.
 
interdim said:
If I were you I would consult an attorney and not trust anything said in such a forum. I have a close friend who has been a software developer for his entire life and he carries insurance when he develops software for others under an LLC. I don't believe it's totally correct or true to say "you cannot be held personally liable for anything your business does". A judge in court will make that determination, not just because you have a piece of paper saying your an LLC.
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Then you are an idiot and dont understand the corporate veil. shut up.

This is basic business principle. Its clear you dont know jack shit. While its possible to pierce the corporate veil it rarely happens. You would have to do something ridiculous for a judge to try and pierce the veil.

Instituting a bug into a code you are writing for the US govt, to siphon off secrets and sell? Ya, thats pretty egregious - these are the only exceptions.
 
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