NOOBS Guide To Starting A Business

[bazooka]

Question: Under what circumstances would it be better to be a sole proprietor? If none, why is it available as an option?

Can you expand on each of these different type of business structures or do you have a link or book that you recommend that explains them?

Regarding your question about being a Sole Proprietor, it is never a good idea. You can be sued for all of your personal assets if something happens. With a Corp or LLC you have protection from such lawsuits. Sole Proprietor is a cheap way to do business if you don't have the cash to file the proper paperwork to form a corporation. You also need to figure out which structure will work best for you. If you don't mind risking everything, Sole Proprietor will work just fine. The same applies to Partnerships. I personally always file for an LLC. Here in Nevada it's only $75 to incorporate and $125 for the initial list of officers. $200 total for corporate status and protection.

Yeah, it seems like common sense to get an LLC. I don't want to risk losing my home if my frame falls of the wall of someones home and kills somebody.... So of the people here that run their own photog businesses, you guys are all LLC's or Corps? No Sole proprietorships represented here?

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[KmH]

Question: Under what circumstances would it be better to be a sole proprietor? If none, why is it available as an option?

Can you expand on each of these different type of business structures or do you have a link or book that you recommend that explains them?

Regarding your question about being a Sole Proprietor, it is never a good idea. You can be sued for all of your personal assets if something happens. With a Corp or LLC you have protection from such lawsuits. Sole Proprietor is a cheap way to do business if you don't have the cash to file the proper paperwork to form a corporation. You also need to figure out which structure will work best for you. If you don't mind risking everything, Sole Proprietor will work just fine. The same applies to Partnerships. I personally always file for an LLC. Here in Nevada it's only $75 to incorporate and $125 for the initial list of officers. $200 total for corporate status and protection.

I strongly disagree that being a Sole Propietor is never a good idea. For many small business it makes the most sense even when the issue of liability is considered.

Business Structure and Tax Implications | SBA.gov

"State Income Taxes Nearly every state levies a business or corporate income tax. Like federal taxes, your state tax requirement depends on the legal structure of your business. For example, if your business is an LLC, the LLC is taxed separately from the owners of the business, while sole proprietors report their personal and business income taxes using the same form used to report their business taxes."

Which also means more stringent reporting and record keeping requirements for business that ar not SP's.

Like most business legal issues, getting the advice of a qualified attorney and accountant is preferable to business legal advice in an online photography forum.

[KmH]

Yeah, it seems like common sense to get an LLC. I don't want to risk losing my home if my frame falls of the wall of someones home and kills somebody.... So of the people here that run their own photog businesses, you guys are all LLC's or Corps? No Sole proprietorships represented here?

Who says you could lose your home if your business type is a Sole Proprietorship?

My last business was a Sole Proprietorship.

[2WheelPhoto]

Question: Under what circumstances would it be better to be a sole proprietor? If none, why is it available as an option?

Can you expand on each of these different type of business structures or do you have a link or book that you recommend that explains them?

Regarding your question about being a Sole Proprietor, it is never a good idea. You can be sued for all of your personal assets if something happens. With a Corp or LLC you have protection from such lawsuits. Sole Proprietor is a cheap way to do business if you don't have the cash to file the proper paperwork to form a corporation. You also need to figure out which structure will work best for you. If you don't mind risking everything, Sole Proprietor will work just fine. The same applies to Partnerships. I personally always file for an LLC. Here in Nevada it's only $75 to incorporate and $125 for the initial list of officers. $200 total for corporate status and protection.

Yeah, it seems like common sense to get an LLC. I don't want to risk losing my home if my frame falls of the wall of someones home and kills somebody.... So of the people here that run their own photog businesses, you guys are all LLC's or Corps? No Sole proprietorships represented here?

What about insurance? As cheap as it is in this industry seems the only way to go anyway.

[etnad0]

Question: Under what circumstances would it be better to be a sole proprietor? If none, why is it available as an option?

Can you expand on each of these different type of business structures or do you have a link or book that you recommend that explains them?

Regarding your question about being a Sole Proprietor, it is never a good idea. You can be sued for all of your personal assets if something happens. With a Corp or LLC you have protection from such lawsuits. Sole Proprietor is a cheap way to do business if you don't have the cash to file the proper paperwork to form a corporation. You also need to figure out which structure will work best for you. If you don't mind risking everything, Sole Proprietor will work just fine. The same applies to Partnerships. I personally always file for an LLC. Here in Nevada it's only $75 to incorporate and $125 for the initial list of officers. $200 total for corporate status and protection.

I strongly disagree that being a Sole Propietor is never a good idea. For many small business it makes the most sense even when the issue of liability is considered.

Business Structure and Tax Implications | SBA.gov

"State Income Taxes Nearly every state levies a business or corporate income tax. Like federal taxes, your state tax requirement depends on the legal structure of your business. For example, if your business is an LLC, the LLC is taxed separately from the owners of the business, while sole proprietors report their personal and business income taxes using the same form used to report their business taxes."

Which also means more stringent reporting and record keeping requirements for business that ar not SP's.

Like most business legal issues, getting the advice of a qualified attorney and accountant is preferable to business legal advice in an online photography forum.

This is great advice. Get legal advice from an ATTORNEY. As far as my opinion, I have to admit it is biased because here in Nevada WE DON'T HAVE ANY STATE TAX LOL. We file our taxes quarterly (once every 3 months) so it's not that bad.

[etnad0]

Regarding your question about being a Sole Proprietor, it is never a good idea. You can be sued for all of your personal assets if something happens. With a Corp or LLC you have protection from such lawsuits. Sole Proprietor is a cheap way to do business if you don't have the cash to file the proper paperwork to form a corporation. You also need to figure out which structure will work best for you. If you don't mind risking everything, Sole Proprietor will work just fine. The same applies to Partnerships. I personally always file for an LLC. Here in Nevada it's only $75 to incorporate and $125 for the initial list of officers. $200 total for corporate status and protection.

Yeah, it seems like common sense to get an LLC. I don't want to risk losing my home if my frame falls of the wall of someones home and kills somebody.... So of the people here that run their own photog businesses, you guys are all LLC's or Corps? No Sole proprietorships represented here?

What about insurance? As cheap as it is in this industry seems the only way to go anyway.

Insurance is listed in the OP.

[etnad0]

Yeah, it seems like common sense to get an LLC. I don't want to risk losing my home if my frame falls of the wall of someones home and kills somebody.... So of the people here that run their own photog businesses, you guys are all LLC's or Corps? No Sole proprietorships represented here?

Who says you could lose your home if your business type is a Sole Proprietorship?

My last business was a Sole Proprietorship.

Did you get sued? In a corporate structure people can go after the corporate assets. Just look at successful companies, can you name one single successful company that remains a sole proprietorship? I can't. Not to say that it can't be done, but if someone gets hurt, they are coming after you, your home, etc, if you don't have enough insurance. The reason for this is because there is no "corporate veil" protecting you when you do work as a sole proprietor. With that said, even with an LLC or Corp, there are ways to screw up the corporate protection and people can still come after your personal assets.

People seem to think that simply filing the paperwork provides the protection, but certain things like meeting minutes must be kept to maintain a legitimate corporate status. You can't mix personal and business funds, etc.

If you've never been sued while having a sole proprietorship, look up some info on it. There are things you can do with an LLC or corp that you can't do with a Sole Proprietorship when it comes to taxes and finances as well.

[swanchild]

This is all great advice! Thanks for putting this together. I printed it out.