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Thread: LLC vs Self Proprietor

  1. #1

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    LLC vs Self Proprietor

    For the business owners out there, what is your opinion on having your photography business be an LLC or Self Proprietorship. This is the next step for me and I want to set myself up success. I wanted to get some feedback from owners in the industry before making a final decision. Any personal experiences or advice would be appreciated.

    Thanks

  2. #2
    FrankMi's Avatar
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    Re: LLC vs Self Proprietor

    Quote Originally Posted by JLarocky View Post
    For the business owners out there, what is your opinion on having your photography business be an LLC or Self Proprietorship. This is the next step for me and I want to set myself up success. I wanted to get some feedback from owners in the industry before making a final decision. Any personal experiences or advice would be appreciated.

    Thanks
    Hi Joy. I've owned an LLC but I had very specific reasons for doing so. What do you want to get out of an LLC or SP and what country's laws are you dealing with?

  3. #3
    ktuli's Avatar
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    Re: LLC vs Self Proprietor

    Joy,

    When I owned my pet store, my attorney and accountant both told me to list it as an LLC. The key, they explained, is right in the name as LLC stands for Limited Liability Corporation. In short, they explained that if something would happen and say someone would sue me (aka the business), they could only go after the business. The LLC protected my personal assets, so someone couldn't sue me and take away my house/car/etc. With the pet store having a retail location and dealing with very perishable stock, the LLC made complete sense to me. I know you might not have the same risks in a photography business, but considering how litigious the world has become (especially in the States), I would put up as many barriers of protection as possible. Of course, I would highly recommend you discuss this with a business attorney, and get their assistance in filing the LLC. I know hiring an attorney is a heavy expense when you're just starting out, but I think this is one of those things that having that piece of mind that it is done right is worth a little expense.

    Best of luck in your new business venture!

    - Bill

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    Re: LLC vs Self Proprietor

    Quote Originally Posted by ktuli View Post
    Joy,

    When I owned my pet store, my attorney and accountant both told me to list it as an LLC. The key, they explained, is right in the name as LLC stands for Limited Liability Corporation. In short, they explained that if something would happen and say someone would sue me (aka the business), they could only go after the business. The LLC protected my personal assets, so someone couldn't sue me and take away my house/car/etc. With the pet store having a retail location and dealing with very perishable stock, the LLC made complete sense to me. I know you might not have the same risks in a photography business, but considering how litigious the world has become (especially in the States), I would put up as many barriers of protection as possible. Of course, I would highly recommend you discuss this with a business attorney, and get their assistance in filing the LLC. I know hiring an attorney is a heavy expense when you're just starting out, but I think this is one of those things that having that piece of mind that it is done right is worth a little expense.

    Best of luck in your new business venture!

    - Bill
    Bill is absolutely correct. In the US an LLC offers you much more personal protection regarding your personal assets. We had 5 retail locations and chose to go the route of a Corporation because of the size, value, taxes, employees, etc. Had we been smaller, an LLC would have been a good option. No matter what you are leaning toward, I would highly recommend you consult with a reputable small business attorney and a small business accountant. They do cost, but they are worth it when it comes to your livelihood and your family.

    If you decide to go as a Sole Proprietor, make sure you at least cover yourself with adequate insurance covering all aspects of your business and personal life. A large balloon insurance policy (that will cover any type of lawsuit) on top of that is not terribly costly and does offer additional peace of mind.

    Many blessings on you endeavor!

  5. #5

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    Re: LLC vs Self Proprietor

    Frank, I am dealing the with state of Florida. Bill and Maja, thank you for your comments. This is where I was leaning. Even though it is small at the moment, I certainly wouldn't want to have to pay for extra insurance coverage or have someone come after my personal belongings. LLC it is!! Now I just have to register with the state. Thanks for all the good wishes and positive feedback.

  6. #6
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    Re: LLC vs Self Proprietor

    Quote Originally Posted by JLarocky View Post
    Frank, I am dealing the with state of Florida. Bill and Maja, thank you for your comments. This is where I was leaning. Even though it is small at the moment, I certainly wouldn't want to have to pay for extra insurance coverage or have someone come after my personal belongings. LLC it is!! Now I just have to register with the state. Thanks for all the good wishes and positive feedback.
    Excellent decision!! Have a blast as your small endeavor grows.

  7. #7
    FrankMi's Avatar
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    Re: LLC vs Self Proprietor

    Quote Originally Posted by JLarocky View Post
    Frank, I am dealing the with state of Florida. Bill and Maja, thank you for your comments. This is where I was leaning. Even though it is small at the moment, I certainly wouldn't want to have to pay for extra insurance coverage or have someone come after my personal belongings. LLC it is!! Now I just have to register with the state. Thanks for all the good wishes and positive feedback.
    LLC's in the US are particularly beneficial when you have a small business but also own other assets that could be taken in a lawsuit.

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    William W's Avatar
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    Re: LLC vs Self Proprietor

    Quote Originally Posted by JLarocky View Post
    I am dealing the with state of Florida. . . LLC it is!! Now I just have to register with the state.

    As you have chosen to set up a Company, specifically for a PHOTOGRAPHY Business you might look into the pros and cons of how you are employed and thereafter which Entity, (You or the Company), will own the Copyright to the Images.

    I am not au fait with the minutiae and nuance of all the relevant US Laws in this regard but I do know there are parallels with Laws, about which I am expert.

    WW

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    Re: LLC vs Self Proprietor

    Quote Originally Posted by FrankMi View Post
    LLC's in the US are particularly beneficial when you have a small business but also own other assets that could be taken in a lawsuit.
    Not sure if this is reflected in USA law yet, but here in NZ there has been a BIG tightening of LLC laws. Whereas before, one could walk away from a failed LLC pretty much with impunity, but these days creditors can go after directors personal assets for reckless trading etc, and more and more creditors are wanting personal guarantees from directors for leases & other big value things.

  10. #10
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    Re: LLC vs Self Proprietor

    Having owned several LLCs and Sub S corps, I believe if you are very small and your occupation presents little exposure, or risk if you will, I would stay a sole proprietor as long as possible. The record keeping requirements are much stiffer for the LLC and Sub S. and much more expensive to maintain. Moreover, should you be sued, the opposing lawyer will subpoena all of your financial records and trust me, if you dont follow the rules to the letter, he will pierce the corporate veil and you are screwed anyway.

  11. #11
    William W's Avatar
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    Re: LLC vs Self Proprietor

    Quote Originally Posted by Colin Southern View Post
    more and more creditors are wanting personal guarantees from directors for leases & other big value things.
    Ditto here.

    And that is the easiest method for creditors go after the money, because they have the Director's Personal Guarantees – DPG are commonly requested of a new business for a 15 day Trading Account, with a mere $1000 credit limit.

    WW

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