Doing Business

Question

So I want to start my own business but I’m not sure if I should register as a LLC or another form like DBA because the business will be my name. I also wanted to know if there was any way to conduct business without registering? Or maybe I’m just letting fear get in the way of me registering my business. Please help! Lol

BansheeBailey · Answer

It may depend on the laws of the state in which you are principally doing business. Consult a local lawyer, maybe?

SShep · Answer

Congrats on starting your own business!

When it comes to formation, it really depends on the kind of business you are launching and the protections you may want / need.  Tax structure varies by formation as well. If you are starting a side hustle while keeping your 9-to-5, the easiest method is to conduct yourself as a Sole Proprietor. You don't need to file separate taxes, but Barb is correct in that you'll want to set aside some of your earnings to give to the government.

On the other hand, if you are launching something bigger and want to keep your personal and business earnings separate, while also protecting your personal assets, a LLC or C Corp could be the way to go.

I recommend finding a small business group or Meetup nearby where you can learn more. My state has a great one that offers free resources and advice. Also check out this article:

https://www.makechange.aspiration.com/articles/do-you-need-to-register-your-freelance-business

Barb Hansen · Answer

I am not an accountant or a lawyer, so this advice is not verified.

I think it depends on the business you are starting.

If you are going to be a tech consultant/contractor and you want to see if there is a need for your work -- just start your business and accept checks in your own name AND save a percentage of your income for taxes.  If you really start making money, then for tax reasons, you'll want to form an LLC.

I worked for years as a tech consultant without a business license - my clients wrote checks to me in my name and I had to manage my taxes on the back end.  I have also opened an LLC in the mid-2000s because my accountant advised that for tax reasons, it would be much better for me to become an employee of my LLC. I kept the LLC open for a few years and when I went back into the corporate work-force, I shut it down.

If you are opening a store, then I think you have to have a business license, depending on local ordinances.

Robyn Wick · Answer

I work with several contractors who are Sole Propiertors as mentioned above. It may also be worth consulting with an accountant to see what kinds of tax benefits or pitfalls may come with different designations.

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