The next step in how to proceed - Sole Proprietor or LLC?

[dw_510]

Hi Everyone,
First off, I’m new to the forum and this is my initial post. I know there is an official “Meet and greet section” but just wanted to get this out of the way.

I’m currently employed at a large IT consulting firm. They treat me well, the pay is decent and I’m comfortable and feel relatively secure. However, I never wanted to be a “Corporate hero”. My dad started a small business at 29 in 1998 and it still exists today … barely. He still has a client base that needs service. I have been thinking about starting my own gig for over 4 years now. I am about to hit 31 years old and last year I decided it was time to proceed.

I currently have 4 clients of my own on the side while working full time. I have managed to do things a bit backwards in terms of starting the business. I have created the web site, added to Google places, I have a phone number and an official business address. I have begun marketing on Craigslist consistently.

My question is on the next steps to take. My business name is called BayNetworx. I have not filed a fictitious name statement. I don’t know whether or not I should just file a fictitious name statement as a sole proprietor or form an LLC. I will be dealing with clients data, hardware and computer networks.
Please provide me any insight on the benefits of either one. My current income from the clients is billed directly to me by name and not by business name and I don’t have a business checking account.

Thanks in advance,
Dan

[vangogh]

Welcome to the forum Dan. One of our moderators has a site all about LLCs, which should give you a good idea if an LLC is for you. Here's the site (http://www.limitedliabilitycompanycenter.com/). The basic idea with an LLC is to offer some limited protection and I think some potential tax breaks. Whether it's for you depends on what you have to protect and whether or not you'll benefit from the tax advantages. I'll let you read David's site since he knows much more about this than I do.

[chris maxwell]

I am new to this site as well and looking forward to helping as well as sharing ideas and networking. I would also say it depends on many factors including valuation of the business or if you will soliciting investors later on down the road. There is double taxation in some entities, some are considered pass through entities and others pass over entities. Will you be paying dividends to investors?