Reply To: Incorporation – Setting up your business legal structure for optimized operation

FMI® Guild

I like where this is going.  Great job everyone.  For the most part, there really is not a right or wrong answer here. It is, by design to provoke critical thinking and interaction.

Pedro – for tax benefit purposes, you can either be considered a sole proprietor, LLC/LLP (limited liability company or partnership), or C or Sub S Corporation.  All of these have pros/cons based on your business' growth and health. For California, a single start-up is probably going to go as a S.P. in the beginning. As cash flow increases, then one can convert it to a LLC which is what is ideal for a single owner of a business.  More asset protection (meaning, if a lawsuit occurs, they can only go after what the company owns/has, not you as a individual) available with an LLC.

Megan – You can still get the benefits of tax deductions by being a sole proprietor.  It is a simple task.  A resource for anyone in their state is the respective state's “Secretary of State” website that will give details on how to incorporate.

In California, it is fairly simply.  Register at the county clerk's office, post a small add and you're in business.  It most likely it is as simple as that in New York State as well.

Kate – good researching.  I can help with that this week (researching).

Paul – good viewpoint.  That is a way of tracking cashflow from revenue stream.  That was a great viewpoint to share here on the forum.  Excellent work.
Jamie – good plan. You want some kind of business entity for tax benefits.  It is a hefty annual fee in CA, so SP is a good start.

This is good guys & gals.  Like the interaction that is picking up here. See you in a few hours at 10am EST.