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20

LLCs were created for just this scenario: you're an individual or small business who wants to enjoy the protections being a company or corporate entity entails without becoming a full-blown corporation. An LLC allows you to operate as an individual without putting your personal assets at risk. You pay taxes as an individual (in the US anyways) but enjoy ...


15

An LLC protects you from personally from all creditors, whether they be customers, shareholders, or other parties. Liability for business activities is limited to the LLC's assets; yours are protected. Nolo's LLC Basics describes this well: Like shareholders of a corporation, all LLC owners are protected from personal liability for business debts and ...


11

Besides liability limitation, which Paperjam covered well in his answer, LLCs also provides tax flexibility. You can elect to have your LLC taxed as a disregarded entity or as a corporation. As a disregarded entity, it's as if you there was no LLC. As a corporation, there is more paperwork; however, besides paying yourself ordinary wages, depending on your ...


10

It should be remembered that with any form of Limited Liability structure (LLC, Ltd, PLC) etc the liability is limited only to the shareholders or members. In the event of a company failing, other than losing their investment, shareholders/members are only liable for any unpaid share purchase money (or nil, if all shares are fully paid up). Beyond that, ...


10

No, you cannot start working and billing under the name of a legal entity that does not (yet) exist. You can certainly start work on the project, but as of now, you are still working as a sole proprietor. You would not be covered under any of the legal protections provided by the LLC. And you cannot retroactively claim the work was done "under the ...


8

Many states do not allow an LLC to be formed for professionals who require a license (e.g. lawyers, engineers, accountants). A PLLC is intended for licensed professionals who require the benefits of an LLC. A professional limited liability company (“PLLC”) is a business entity designed for licensed professions, such as lawyers, doctors, architects, ...


6

LLC disadvantages vs. sole proprietorship: Government fees to establish and maintain the LLC (usually $100-$500 first year and up to $100 subsequent years, depending on your state). Paperwork to to establish and maintain the LLC. However, in some states, this is nearly zero - just a few minutes of filling out government web forms. That's it. Taxes are the ...


5

Even as a single member LLC you must keep finances separate. You must have a bank account for the LLC which is not your personal bank account. Then you can pay yourself (or take dividends) from the LLC funds. But you can not deposit the LLC money into a personal bank account. Well, you aren't supposed to. I guess a bank may allow you to, but legally you ...


5

There are a few disadvantages to incorporating as an LLC as opposed to going forward as a sole proprietor. More paperwork. Basically, since you'll be an actual company, you'd need to file paperwork with the state. This may differ state to state (since you mentioned the United States). Taxes. Depending on the state, you may need to pay self-employment taxes ...


4

Edward Brey's comment is pretty much spot as far as liability is concerned. Other than (well put, Edward!) illegal activity, the LLC form protects the owners and operators from incurring personal liability as a result of activities carried out for the business of the LLC. The LLC business entity is a simpler approach than a corporation because it removes ...


3

I've contacted a TN accounting firm, here's what they said: "You can put 0% tax rate on your invoice if you like, but the main thing is that the invoice should clearly show that it is an out-of-state customer (with an address from another state or country). TN considers web design and development as the creation of software on the customer’s server. So if ...


3

Probably the best thing would be to negotiate a rate in Euros. As far as their accounting is concerned, it wouldn't be much different from using a local freelancer. They can send you a check in Euros and you can have it deposited to a US bank, although you'll have a poor exchange rate and some risk from currency fluctuations. I've never worked with a French ...


3

Whether or not a company issues a 1099 is their choice. If they do not wish to comply with that requirement, that is their business. In 2011 the IRS made filing 1099s more easily tracked. They added a question to the tax forms, "Did you make any payments in 2011 that would require you to file Form(s) 1099?" and there are only "Yes" and "no" answers. So ...


3

I think it's valuable to add to the other answers that you must be able to prove that your LLC is acting as a business entity in order to have the protection specified. Generally speaking you do this by running it as a real business and not as a shield. (Meaning that, in most cases, you can not simply have an LLC but give it no capital, keep no books, etc......


2

It has always been a simple answer for me... start an LLC as soon as you make your first $125. I chose this because that is the minimum to start the LLC for paperwork in Ohio and to open a bank account. That is my standard and I do it just to protect my personal assets. That is the core reason for an LLC.


2

I am no accountant or lawyer. But since this is a site for freelancing Ill give my practical advice. If you do your books on a cash basis then it matters when the check clears in your bank account not an invoice date. And it really only matters to the IRS if you are collecting $600+ Again not an expert but that's my interpretation. And if you have a ...


2

Will that $400.00 still be charged? No. You probably paid during the very brief grace period. Does the owner lose the liability protection for business conducted during the inactive period? No. See "an LLC is not subject to loss of limited liability as a result of an inadvertent administrative failure" in https://www.floridabar.org/divcom/jn/jnjournal01....


2

I've been a freelancer since 1994 - We call it a contractor or consultant in Europe. As an employee, you get health benefits, possibly a pension, car, cell phone etc as part of the job. A sick day and your holidays won't effect your pay check. After a couple of years or more, depending on laws where you live, you could get a redundancy check if they were ...


2

Generally, yes, unless you are found guilty of some crime or gross wrongdoing related to the claims in the lawsuit. The liability would be limited to the assets of the LLC; hence the expression "limited liability company". I am not an attorney.


2

Any transactions before the formation of the LLC would technically be under a sole proprietor/individual. For example, at your personal bank account, not a business LLC bank account. Yet, even with an LLC, your personal assets could be seized for breaching the cooperate veil if the LLC is not held in good standing, mixing business and personal ...


2

I am not an accountant or attorney. NOTHING I post should be see as direct tax or legal advice. This answer is solely based upon my personal experience. I own/operate a single member LLC in the US. The key word in LLC is Liability, As a US based, single-member, LLC there's not a great deal of tax benefits. You can still file individually and it doesn't ...


1

An LLC is a seperate entity, and has nothing to do with you. The LLC's EIN will remain with the LLC. Think of it as the Social Security number for "person". That's how all business in an LLC is conducted - as a seperate person. You are simply a manager.


1

Don't, go to an accountant. Go to an affordable one, or go on a one-time consult or whatever option you have to save money on this but you really do need professional advice. If you get this wrong, it will cost you a lot more.


1

For my small business - doing software development - I forked out about $1000/yr for just general liability and professional liability. Your mileage may vary. The quote shouldn't take a week, though. Something seems "off" to me.


1

I've been freelancing for over a dozen years, and have received maybe three 1099s in all of that time. I have over two dozen clients, all US-based, of varying size and makeup, most of whom pay me several thousand $$ each year. As long as you are keeping track of your income and who it's from, you really don't need any 1099s. As was previously answered, it ...


1

You can use an invoicing service such as Zoho Invoices. I use this services myself for domestic and foreign clients. It handles all conversion rates and you'll be able to charge your clients in their native currency. This system will send an invoice but the transaction is handled by Stripe. From Stripe you can connect your back account and deposit your ...


1

When You close Your company, its bank account must be closed too. A US company can open an account in a UK Bank. Please note, that most times it requires an authorized representative to personally travel to the UK to sign the contract.


1

Payroll plusses: Benefits Downtime is expected, whereas downtime means "go home" as a contractor sometimes. Payment on time is required by law Possibly, the company will invest money in training you Workers comp in case you hurt yourself When you leave for the day, no need to worry about business taxes, marketing, advertising, etc Payroll minuses: You're ...


1

It would make sense since I will be the only member of the LLC so anything that the LLC produces is developed by me, but on the other hand a LLC is considered a separate entity from myself, so I'm not sure how that would work? IANAL and IANAA, but this is the crux of the protection you gain from the LLC. Every case is different, but you should be very ...


1

What on earth would be wrong with using your personal portfolio for your LLC when your LLC is just you? I hope there is not a human alive that would take issue to that. Look at it from a different angle - would you discard your entire portfolio if you legally changed your name just because those items were developed "under a different name"? You have to get ...


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