If you're confused by the all of the different state and federal options to choose from as you legitimize your business ...
Don't be!
Not to offend you, because you are a Genius in your own birthright. However, unless you take Business or Tax Law ...
Understanding the legal entity structures is not a DIY thing to understand without an expert.
So, if you've felt like a guy with an old box computer trying to search your way into the right entity structure, stop!
Choosing the right entity structure is like a matrix. And if you pick the wrong one by yourself, you can spend tens of thousands in overpaying the IRS.
So let me make it easier for you with a list of questions for you to think through two simple.
The two simple questions to ask yourself are
Are you taking on a lot of risk in your business?
is it easy for someone to sue you in business for one unintentional mistake?
Is there going to be more than one business owner?
Will it be more than 100 owners?
Yes, as CPAs we have a bigger matrix to flow through in order to get down to specifics for your now and future.
But let's KISS ....
No, not in real life silly ... but let's Keep It Super Simple!
If you answer No to all three questions, then it is okay to start your business as a sole proprietor which means you are accepting money for work without having to do anything extra.
If you answer Yes to one or all three questions, then you immediately fall into the realm of requiring a Limited Liability Company in order to separate your business and personal obligations.
Now that the definitional awareness is out of the way, let's get into the details on the LLC mechanics by expanding the list below to see the answers of each item: