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Need some advice about whether or not to pursue an LLC

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Need some advice about whether or not to pursue an LLC [#permalink] New post 09 Oct 2011, 21:33
I figured this would be a good place to ask a few questions about LLC's since most people here are pretty pretty business savvy and hopefully therefore familiar with how they work.

If I am running a "business" of my own what would be the benefits legally of having an LLC, as well as the benefits of forming one, if any, for applying to business school. I put business in quotations because I basically buy and resell used equipment for a small profit. However, I feel like I have heard that making it an actual registered business might look better. Also, as I begin to devote more time to this and increase the amount of money I make I wonder if there are perhaps certain cutoffs where one would recommend pursuing an LLC, or if that aspect has anything to do with going that route.

I plan to apply to business school in roughly 3.5 years and was simply looking for advice on how to better prepare my future application and was curious if making my side job an actual "business" had any real benefits?

Thanks for your time, and sorry if I posted this in the wrong area.
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Re: Need some advice about whether or not to pursue an LLC [#permalink] New post 10 Oct 2011, 09:10
Expert's post
I know many find S-Corp to be a better option (more straightforward with taxes/etc).
However cost-wise, both are about the same to start and file.

I don't know that either option is more official.
Depending on which state you are in, the taxes may look diff depending on what you do. CA for example has a $800 tax for corporations and LLC's, so being a sole proprietor is better/cheaper.

As to the apps, is it 100% of your income/time? if so, then yes, absolutely form it.
If not, then wait until it is a meaningful amount before you start dealing with complications on the tax and reporting side.

Good Luck!
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Re: Need some advice about whether or not to pursue an LLC [#permalink] New post 10 Oct 2011, 20:56
Hey BB,

I appreciate the reply. I figured I would ask what people knew about it on here before looking into it too deeply myself.

A few more details: Over the last few years I would do it sparingly on the side while in undergrad, probably pulling a mere 5k a year. Now I am in grad school though and with tuition being quite a bit more I have been more motivated to earn some extra dough. I am still quite busy with school so I really can't invest as much time as I would really like to, but since the beginning of Fall I have pulled around 25k. So, do you think this is at a point where I should be looking more heavily at starting a legal business. Or am I perhaps missing a point that it doesn't necessarily have to do with the profit levels? Sadly, my business knowledge is quite lacking and I aspire to go to business school mainly to become more fluent in the topics I am trying to discuss here.

But again thanks for you input, any if anyone else wants to add their 2 cents I would really appreciate it as well.

Take care.
Re: Need some advice about whether or not to pursue an LLC   [#permalink] 10 Oct 2011, 20:56
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