Forming an LLC
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S Corp mostly exists for the sole purpose of treating the owner as an employee and paying them as such, rather than through profits. But this only works if the pay rate is reasonably - meaning like what any employee would make. If you make big money as an S, you have all the same limitations again.
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@scottalanmiller said in Forming an LLC:
S Corp mostly exists for the sole purpose of treating the owner as an employee and paying them as such, rather than through profits. But this only works if the pay rate is reasonably - meaning like what any employee would make. If you make big money as an S, you have all the same limitations again.
That matches what I've read so far about contrasting an LLC to an S. Unless there is some significant financial benefit of an S, I will most likely go with the simplicity and informality of the LLC.
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@eddiejennings said in Forming an LLC:
@scottalanmiller said in Forming an LLC:
S Corp mostly exists for the sole purpose of treating the owner as an employee and paying them as such, rather than through profits. But this only works if the pay rate is reasonably - meaning like what any employee would make. If you make big money as an S, you have all the same limitations again.
That matches what I've read so far about contrasting an LLC to an S. Unless there is some significant financial benefit of an S, I will most likely go with the simplicity and informality of the LLC.
Yes, S are very special case, pain in the butt entities and a lot of states don't allow them.
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After some research and talking to some knowledgeable folks, it seems clear the best option for me is to form an LLC. It strikes the correct balance of protection and complexity for me.
The next challenge comes naming. The goal of the LLC is to be the business entity through which I do my various projects (saxophone lessons, percussion clinics, freelance IT and bench work, performance gigs, compositions, recordings). My projects fall into three general categories: music education, general music services, and IT services; thus, having one all-encompassing name isn't possible.
I believe my solution for this is to utilize DBAs. I have no desire to create a business entity for every type of project I do, but using DBAs registered by my LLC would allow me the flexibility of having naming that matches the project type with all of the legal and financial pointing to only one entity: the LLC.
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@eddiejennings said in Forming an LLC:
After some research and talking to some knowledgeable folks, it seems clear the best option for me is to form an LLC. It strikes the correct balance of protection and complexity for me.
The next challenge comes naming. The goal of the LLC is to be the business entity through which I do my various projects (saxophone lessons, percussion clinics, freelance IT and bench work, performance gigs, compositions, recordings). My projects fall into three general categories: music education, general music services, and IT services; thus, having one all-encompassing name isn't possible.
I believe my solution for this is to utilize DBAs. I have no desire to create a business entity for every type of project I do, but using DBAs registered by my LLC would allow me the flexibility of having naming that matches the project type with all of the legal and financial pointing to only one entity: the LLC.
How about:
The Edje Music, LLC.
The Edje IT, LLC.Make two, one for music and the other for IT. (if that's your real name anyways)
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Eddie and the Mangoes, Limited.
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@scottalanmiller said in Forming an LLC:
Eddie and the Mangoes, Limited.
Perfect. It sounds like an music group with IT experience.
LoL. -
Eddie Jenning Services, LLC.
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I decided on Eddie Jennings Services, LLC. Now I get to contact the Secretary of State's office (Georgia) on Tuesday, since (despite being less than 80 characters and me typing it 100% correctly on the web page) my confirmation E-mail for my name reservation reads "Eddie Jennings Services," rather than "Eddie Jennings Services, LLC" (yes, Eddie Jennings Services comma).
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@eddiejennings said in Forming an LLC:
I decided on Eddie Jennings Services, LLC. Now I get to contact the Secretary of State's office (Georgia) on Tuesday, since (despite being less than 80 characters and me typing it 100% correctly on the web page) my confirmation E-mail for my name reservation reads "Eddie Jennings Services," rather than "Eddie Jennings Services, LLC" (yes, Eddie Jennings Services comma).
I'm not the only one with an injection attack radar yelling loudly in my head am I?
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@travisdh1 said in Forming an LLC:
@eddiejennings said in Forming an LLC:
I decided on Eddie Jennings Services, LLC. Now I get to contact the Secretary of State's office (Georgia) on Tuesday, since (despite being less than 80 characters and me typing it 100% correctly on the web page) my confirmation E-mail for my name reservation reads "Eddie Jennings Services," rather than "Eddie Jennings Services, LLC" (yes, Eddie Jennings Services comma).
I'm not the only one with an injection attack radar yelling loudly in my head am I?
I completed their "Report a Problem" form. Oh well. This will get solved one way or another. I simply wasn't expecting the name reservation process to be as much of a source of stress.
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A LLC is, historically, newer form of business entity, which for tax purposes can elect to be taxed as many different ways. If a single member, by default it will be taxed as a disregarded entity (sole proprietorship). If multiple members, by default a partnership, or if elected, a S-corp or C-corp. While being a state entity, a LLC is not a corporation, but has many similar liability statutory protections, just like a corporation, but generally has less of the formalities as a corporation. If naming has conflicts, in most states you can do a nontaxable reorganization to change names, etc.
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@spiral said in Forming an LLC:
A LLC is, historically, newer form of business entity,
It's not just newer historically, it's still newer today
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That is correct. LLC's still do not have much judicial history in the courts to know how certain facts and circumstances will play out in court.
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And for Delaware LLC, they have a $250 annual fee for LLCs, but many states have much less fees or only one first time initial fee of $50, such as for Missouri.
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Corporations in comparison, have annual registrations, corporate minutes, and other corporate formalities to comply with, in order to keep the business entity intact without the state doing an administrative dissolution, because of failure to comply.
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So, in general, you have state entities, and elected tax treatments, for which the LLC, a state business entity, is the chameleon, which has the flexibility to be elected to be taxed in such a way that best suits the facts and circumstances.
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In addition, not sure if applicable, but "Series LLCs", are even a newer form of LLCs, which have even more functionality, but less statutory history, however, probably not applicable in this case, but used more commonly in multiple rental property unit situations.
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@spiral said in Forming an LLC:
Corporations in comparison, have annual registrations, corporate minutes, and other corporate formalities to comply with, in order to keep the business entity intact without the state doing an administrative dissolution, because of failure to comply.
LLC has some, too, but not very much.
