I currently have an LLC for my real estate investment business and it's a pain in the butt to keep things organized. It only gets worse where I live since I have to apply for a business privilege tax and my accountant charges additional money for that!

Anyways, i noticed a lot of designers call themselves freelancers. Many dont bother forming an LLC, while others registered a ficticious name. I know why one SHOULD form an LLC, but is web designing a business where going solo (being a sole proprietor) is sufficient?

As I start to gain more client, I would like to have business cards and use a ficticious name instead of using my name.

I would talk to your tax advisor or CPA to see which corporation fits your needs the most. LLC would be a definate minimum I suspect for what you are doing. We just reformed our company as a SCorp for certain advantages our CPA pointed out. I would definately get advise from a professional on that.

"Anyways, i noticed a lot of designers call themselves freelancers. Many dont bother forming an LLC, while others registered a ficticious name. I know why one SHOULD form an LLC, but is web designing a business where going solo (being a sole proprietor) is sufficient?"

Web designers often call themselves freelancers for tax reasons. This might prove to be more beneficial than actually forming a business.

Freelancers are usually on a per project basis. Meaning they are contract workers with a somewhat unpredictable amount of income.

Realize that a Web-designing business should be run just like any other business when it really comes down to it in order to be successful. The same basic business principles that make an offline company survive also work for a web-based company.

You might find the thread titled: importance of being registered helpful.

I too am thinking of going from an INC to a LLC because I want pass through taxation. Rather than being taxed twice for everything.

Any thoughts on that?

I too am thinking of going from an INC to a LLC because I want pass through taxation. Rather than being taxed twice for everything.

Any thoughts on that?

The decision really has to be made on an individual basis. There are so many forms of business structure and so many possibilities within each form that wht would surely have to start an accounting thread.

Personally, I feel that an LLC works well for an internet company with the exception to an internet company that is owned by a larger company such as a conglomerate for example.

Before actually making a decision a consultation with a professional CPA will surely pay off as he/she will be able to assess your specific needs.

Being a sole proprietor is probably sufficient for your own web design business. Keep in mind that you will have unlimited liability for the sole proprietorship’s debts. An LLC, on the other hand, costs very little to form, and the benefit is limited liability.

From what I understand, it is relatively difficult to change from a corporation to an LLC. With a corporation, the government taxes both the business entity and the shareholders, unless subchapter S applies, in which case only the shareholders pay tax. Consider setting up a subchapter S instead.

Consult with an attorney and accountant.

Just to start, I would not even think about registering as an ,LLC. There is just way to much paper work to fill out at first, and really isn't nessecary at all. Just register yourself as an LLP and get a copyright on your name.

Just to start, I would not even think about registering as an ,LLC. There is just way to much paper work to fill out at first, and really isn't nessecary at all. Just register yourself as an LLP and get a copyright on your name.

In many cases that is a poor decision but can be unique hence the recommendation of contacting real counsel. Also, the paperwork should not be a lot for a LLC filing (I've had a few done in CT) -- its also typically self-explanatory and there are instructions on the Secretary of the State's website.

"From what I understand, it is relatively difficult to change from a corporation to an LLC. With a corporation, the government taxes both the business entity and the shareholders, unless subchapter S applies, in which case only the shareholders pay tax. Consider setting up a subchapter S instead."

Actually it is rather straightforward changing from a corporation to an LLC. It would be a great idea for you to see if Subchapter S is available to you. Somtimes this can be rather difficult with the limitations that are placed on these types of corporations. To follow up with what was stated earlier with a typical corporation (Chapter C) taxes are placed on both the company and the shareholders in effect double taxing.

However, in a Subchapter S corporation the shareholders are not taxed. Setting up a Subchapter S corporation is very easy in that all that is required in another form needs to be filled out when filing taxes. This is form 2553. Be careful of the deadline for this form however as it is different than the rest of your paperwork.

It should also be noted that in most cases a Subchapter S does not need to be set up. With careful planning you can benefit from your typical Chapter C and by being creative. Now, I do not mean cheating or fraud or anything of the sort. A competent account/tax attorney would be able to show you creative ways that you can save money.

"Just to start, I would not even think about registering as an ,LLC. There is just way to much paper work to fill out at first, and really isn't nessecary at all. Just register yourself as an LLP and get a copyright on your name."

I strongly disagree. First of all an LLC could be set up in several minutes over the internet for a relatively low fee if one really wanted.

Secondly, an LLC offers many advantages. First of all an LLC offers great protection as the company is a seperate legal entity from it's owner/owners. It is up to your attorney to make sure the LLC gets recognized however if the need arrises.

An LLC allows for unlimited numbers of participants whereas a Subchapter S corporation only allows for 75. Members may be a citizen of any country whereas a Subchapter S corporation's members must be U.S. citizens.

An LLC is also treated as a 'pass-through' taxation entity and is more clearly stated as to how it is treated when being taxed. An LLC has less formalities. An example being that an LLC is not required to hold annual meetings.

I hope this helps.

Just to start, I would not even think about registering as an ,LLC. There is just way to much paper work to fill out at first, and really isn't nessecary at all. Just register yourself as an LLP and get a copyright on your name.
All three of us are in different countries, what do you recommend?

Well, first of all an LLP really is only used in particular circumstances. For example, what types of businesses do you usually see with an LLP.

Answer: Law Firms.

Most Web based businesses are not similar to law firm businesses and tWat is why most web based businesses do not use that business structure. You see an LLP in itself is not a corporation. Something else to think about is that an LLP stands for Limited Liability Partnership. Often times a partnership is not what is best for a particular business. This formation was set up for partnerships.

Well, this might be construed as the 'typical' american answer is is, for the most part, true. Most of the time the two categories are Inside of U.S. and outside of the U.S. While you are still able to obtain an S and C corporation outside of the United States the process is difficult and costly. An LLP does not give you as much protection/rights as an incorporation would.

So, in short, without any other information, an LLC seems the best bet.

Well, first of all an LLP really is only used in particular circumstances. For example, what types of businesses do you usually see with an LLP.

Answer: Law Firms.

Most Web based businesses are not similar to law firm businesses and tWat is why most web based businesses do not use that business structure. You see an LLP in itself is not a corporation. Something else to think about is that an LLP stands for Limited Liability Partnership. Often times a partnership is not what is best for a particular business. This formation was set up for partnerships.

Well, this might be construed as the 'typical' american answer is is, for the most part, true. Most of the time the two categories are Inside of U.S. and outside of the U.S. While you are still able to obtain an S and C corporation outside of the United States the process is difficult and costly. An LLP does not give you as much protection/rights as an incorporation would.

So, in short, without any other information, an LLC seems the best bet.
Right, LLC seems to be the best. But being a citizen of a different country, I suppose I don't get to be a legal owner of the business, right?

Actually, that is the biggest reason I suggested an LLC to you. With an LLC its members can be citizens of another country.

Understand, however, there might be a special case in a particular country where conflicting laws make this impossible but for the most part all should work out.

Something else that I should add: You might wish to register in the State of Delaware or Nevada, seeing as how they have very business friendly tax laws, Delaware in particular.

I too am thinking of going from an INC to a LLC because I want pass through taxation. Rather than being taxed twice for everything.

Any thoughts on that?

There is no such thing as an "INC".

However, a subchapter S Corp provides the capability to have a "Inc." at the end of your name and ALSO allows PASS through taxation.. You only pay income tax personally and draw a salary from your corp.

If you decide to take any more money from the company (outside of your salary) it is considered a "Distribution" and must be paid back.

<3 hope that helps.

There is no such thing as an "INC".

I have to disagree with you on that. INC has become common when referring to a corporation. Using INC is definitely a generalization however, is a commonly accepted term. To prove my point look at the Inc. 500. There are many others that have utilized this abbreviation.

However, a subchapter S Corp provides the capability to have a "Inc." at the end of your name and ALSO allows PASS through taxation.. You only pay income tax personally and draw a salary from your corp.

A Chapter C corporation also has you include Inc. in your name.

Just to elaborate on this each shareholder has to pay tax. The companies profit and losses are what is passed through taxation.

If you decide to take any more money from the company (outside of your salary) it is considered a "Distribution" and must be paid back.



There are many exceptions here. The most common being the clever use of 'bonuses.' Totally legal however a great way to get around this. When used within reason this can save you a great amount of money.