Attorney Thomas B. Burton answers the following reader question: Is it Better to Be a Sole Proprietor or an LLC? Attorney Burton answers this question and discusses some of the factors you should consider when deciding whether opening your business as a sole proprietor or an LLC is right for you, including liability protections, ease of set up, costs and fees.
Interested in forming your own Wisconsin LLC with the guidance of a licensed attorney? Check out Attorney Burton's brand new Form Your Own Single Member Wisconsin LLC Video package here.
This package contains over one hour of instructional videos, where Attorney Burton guides you through the following steps to successfully set up your new LLC in the state of Wisconsin.
Video 1: File Articles of Organization with the State of Wisconsin
Video 2: Obtain EIN Number from the IRS
Video 3: Adopt Custom Operating Agreement for New LLC
Video 4: Wrap Up and Overview of Steps to Take to Maintain Limited Liability Protection for Your New LLC.
In each video, Attorney Burton shares his desktop screen with you, and walks you through the exact questions the state of Wisconsin or the IRS asks you to successfully file and obtain your LLC and EIN. Attorney Burton also discusses the factors you should consider when making the above choices to file the proper documents with the state of Wisconsin and the IRS.
This package was created in order to help young entrepreneurs and business owners, who are on a tight budget and feel comfortable learning and doing things themselves online. This package is designed to give you the guidance and instruction you need to successfully complete the above steps on your own, for less than the cost of one hour of Attorney Burton's time. This package is designed for a single member LLC owned by one individual, or by a married couple in the state of Wisconsin. More complex situations should be discussed with your attorney before proceeding. Please review the package details thoroughly before purchasing and contact the office by email if you have any questions before purchase.
To view the complete details on what is included in this package, please visit this page on our website.
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Transcript of Video: Is it Better to Be a Sole Proprietor or an LLC?
Hello I'm attorney Thomas Burton and today's question
is the following is it better to be a sole proprietor
or an LLC? This is a great question and one that many entrepreneurs should
ask themselves so let's define the term LLC first
an LLC is a limited liability company and in Wisconsin these type of entities
have been around for the last several decades
and have quickly proven to become one of the most popular forms of business
entities in Wisconsin and that's also true what I
hear in many other states now in Wisconsin to be a sole proprietor
there is no formal registration process
you can begin operating a business under your name
as a sole proprietor in the state of Wisconsin
some states have a registration process where you go about this
but in Wisconsin there isn't a separate registration
you can open up a business checking account as a sole proprietor and you can
even obtain an EIN as a sole proprietor from the IRS
but what you should be aware of is if you're operating a sole proprietorship
you have unlimited personal liability for the actions of your business
what this means is there is no separation between the business and its
assets and liability and your personal assets
so for many people you need to evaluate what type of business you're going in
often the sole proprietorship seems like the cheapest
type of business entity to start because you don't have to
file any paperwork or pay any fees however
it could prove costly down the road now if you're a business where
you've obtained business liability insurance
you can evaluate the limits on that liability and perhaps you feel that's
enough for your initial sole proprietorship
however for many folks with any type of business
liability it's a good idea to start off on the
right foot with a limited liability company
what the limited liability company does is it separates your personal
assets from your business assets and your business liability
so for anyone hiring employees right away I for sure recommend you consider a
limited liability company because it's not only your own actions you could be
liable for it's those of your employees and pairing
a limited liability company with business insurance is
also a great idea however at the very least
a limited liability company can help establish those
limits between the errors omissions assets and liabilities of the business
and your own personal assets and the goal here would be let's say
this great idea for a company you have it's a great idea but it doesn't take
off and unfortunately someone ends up suing
the company well you would like to shield your
personal assets so you don't lose your home from
that lawsuit and that's one thing you can do with a
limited liability company so again for many people it makes sense to start off on
the right foot with this and in the state of Wisconsin I've heard
in some states LLCs can be quite expensive to form and maintain
Wisconsin it's relatively affordable it's only a hundred
thirty dollars if you file your LLC online
and there's a twenty-five-dollar annual maintenance fee to keep
your LLC the annual report and keep it current with the state of Wisconsin
so the filing fees are not that onerous on a year-to-year basis now
I know many young entrepreneurs who are concerned with startup costs
and you can pay a lawyer like me to help you with it and those fees are fully
deductible against business income in the first
year however if you're really looking to save money
some people want to do it themselves I've created a new LLC startup package
that contains four videos with over one hour of instruction from me
guiding you through the state of Wisconsin website how to set up your LLC
properly the state of Wisconsin has an online process you can file your LLC as
I mentioned and you pay a 130 dollar filing fee at the end via credit or
debit card or you can file paper articles of
organization but then you pay more 170 dollars
so my video walks you through how to do it directly on their website
and walks you through the questions they answer talks about
wait I talk about what you want to consider
to help you decide how to answer each question and at the end
you can have your legally valid LLC formed
and you can do it in under half an hour now the video shows you my desktop you
can watch me going through it and you can do it on
your computer at the same time and then pause the video if you're stuck
on a screen thinking about the question also
included is a video that shows you how to file and obtain your EIN from the IRS
which is often important for opening a business bank account
and is a must if you plan to hire employees
then included in the package is an operating agreement a custom
attorney drafted by me operating agreement you can adopt for your llc
and finally there's a bonus video talking about the steps you should take
after you form and file your articles of organization
to maintain the corporate formalities of your LLC
so all of this is in one bundle and it's over an hour of an
instruction it costs less than you would pay me for one hour of my time
now this is best for a single member LLC either one person or a married couple in
the state of Wisconsin forming the LLC if you have a more complex matter you
might want to contact me or another lawyer for help setting it
up to make sure you get everything correct
but I created this package as a way to help young entrepreneurs
and give them good advice throughout the process without costing
a lot of money.
© 2020 Burton Law LLC. All Rights Reserved.
Transcript and captions provided for ease of access for the hearing impaired.
For questions about this topic, or to suggest a topic for a future blog post, please contact the office.
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