Hatching Dragons: The Limited Liability Corporation, LLC


Your business minds its own business

Your business minds its own business

Our conversation about starting up in business continues from last time where we  were talking about how a sole proprietorship is so heartrendingly easy to start, but there is no distinction between personal assets and the business’ assets. This is a problem:

  • No protection of personal assets from seizure in a lawsuit
  • No distinction between personal monies and the business’ money (which makes business expenses hard to prove and spouses hard to convince)
  • Doing one’s own accounting (if not an expert) exposes the owner to results of  accounting weaknesses (writers, are you listening?)

The above is a short list of concerns of the sole proprietor, but some of them can be assuaged by incorporating.  With full understanding of the drawbacks, a sole proprietor may decide to remain unincorporated. The USA is the home of the free. However, understand that among other things, incorporating can help:

  • Make a distinction between personal and business assets
  • Enable the establishment of credit under the business’ name
  • Provide greater freedom to create a distinctive business name
  • Make getting contracts easier

Candy-the-Caterer, a sole proprietor/solopreneur decides to incorporate so that her tangled accounting will  lie straight (the first help she should ask for is a CPA) and to enable her to create a marketing-rich brand name .  What form of business shall she become? The newest of the business formations: Limited Liability Corporation, aka LLC. There are several websites and businesses dedicated to doing business incorporations–hatching dragons, if you will. The papers which have to be filed vary from state to state. The local municipal office of taxation can give advice about what appropriate paperwork, taxes, and  fees apply. Once upon a time, there were few other business configurations. Mentioning the word, corporation –meant the “C” corporation, the kind of business form that has a president and a board of directors. Historically, the corporation was an ad-hoc, task-oriented thing. If you can take the historical info and leave when feeling threatened, refer to this little explanation about the origin of corporations in this country in the beginning of this video from “The Story of Stuff“.

The Limited Liability Corporation walks between the “C” corporation and an unincorporated sole proprietorship. Our caterer, Candy began as one woman with a sweet tooth who wanted to share her creative passion at kids’ birthday parties and stepped into the next stage of her business’ development–CandyCater, LLC.

 

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About victoree

I am not a victim of chance and circumstance. I am a gift to the world, assigned to obey The Divine First Directive "..Be fruitful and multiply; Care for the garden (the earth)". People were created to be fruitful, productive and creative in every stage of life. I am here to make that known. There will be no compromise of my Mandate: no white flag; no terms of surrender.

Posted on June 30, 2013, in boomer issues, career, career planning, Entreprenure, linkedin, women and work and tagged . Bookmark the permalink. 1 Comment.

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