re: Sole Proprietorship vs. LLC

Hey guys,

How many of you freelance arrangers/educators/clinicians out there have incorporated? Seems like the tax benefits and limited personal liability are too good to pass up.

LegalZoom will do all the filings for around $150, anybody do all the paperwork themselves? Spending $150 to know I can't screw it up sounds pretty sweet.

I'd appreciate any comments on the issue, good experiences or bad. Thanks:)
I incorporated (LLC) a while back.  It gives me convenience and options.  I did it through an area lawyer to make sure that all of my legal aspects were taken care of by a professional.  And, IF there were ever a problem (I don't anticipate one), it could hopefully be resolved locally.
I'd be curious to know some opinions on this, too. I've heard that an LLC isn't practical until you are making at least $10,000 on your side business. But, I'm not 100% sure that I was getting accurate information.

So, if anyone has some experience in this area, I'd love to hear what they have to say.
I, too,  would love to know.  Right now I'm getting all of my teaching/arranging income to myself, but if there are advantages to an LLC, that would be worth knowing.
Eric,

It is not a matter of how much you are making as much as it is in the 1) options in regards to operation, 2) ease of raising capital, 3) taxes.  The best advice is to talk with your lawyer and financial advisor.

Refer to http://www.themoneyalert.com/Corp-Entity-Table.html
Almost all the states in the U.S. have very similar options for incorporating a business. The main thing you will want to do is seek professional advise - and go ahead and get the second and maybe even a third opinion. Keep in mind that not all professionals are the same either. Get as much information as you can so you are able to make the best decision for your specific needs.

There are two main reasons people incorporate, for taxes and asset protection. Aside from finding a good lawyer to file the business (I agree with Richard, let the professional do the professionals' job), I highly recommend you either have or find a good CPA that can answer the tax questions that are pertinent to what you are doing. And you may consider going with a larger CPA firm as opposed to an individual operating out of their house :) - the odds go way up that they'll be able to keep up with the ever changing tax code.

There is no cure-all when it comes to business entities (even though some people will say otherwise). Ultimately it's your business, so get as much information as you can to make the best choices you can.
Well said Hugh.
I started an animation business several years ago with 2 other artists, and we set it up as LLC with a local lawyer.  The company bills the client, then the company 'pays' the members.  It's a way to keep money in the company fund, but only pay taxes on your ";salary"; paid to you.  The company can purchase things, so work purchases (computer, office supplies, etc.) aren't part of your taxable income.  If you need every penny you make selling your music to buy groceries or whatever, a LLC might not be the way to go.

It's also a good way to cover your arse in the event of a legal dispute, and we deal with copyrighted material daily.  Let's say you write an ";original"; show, but it turns out you heard it somewhere before without realizing it.  Now you're being sued as an individual and could lose your personal property. 

Look at Coldplay- they were sued by 4 different bands, and settled out of court ($$$!) with Joe Satriani, even though they claim no wrongdoing. 
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