Would you recommend filing a state business license as a sole proprietor or an LLC when doing business as an Administrative Consultant? I’ve looked on the Nevada state business sites and am unable to find the information needed. Please advise and thank you in advance. —Tiphenie Montes
Hi Tiphenie 🙂
So here’s the thing. States aren’t in the business of advising you about what corporate formation you should seek. That’s why you aren’t finding that information.
You might find something on their websites that explains what the different corporate forms are to choose from in your state, but they aren’t going to tell you or advise one way or the other which one to choose or which one may be best for your business.
That’s a question for an attorney or CPA in your local area or state.
Whenever it comes to legalities, it’s so important to talk to the proper, licensed professionals. No colleague, even the most experienced and knowledgeable one, is qualified or licensed to give you advice on that kind of thing.
And you definitely don’t want to rely on the guesses and “legal opinions” of unqualified, unlicensed laypeople because that could cause you some serious harm or get you into legal hot water at some point or in some way or another.
When you start a business, you are by default a sole proprietor (or a partnership if there is more than one owner). And there’s no special incorporating you need to do for that (although, you may still need to register the business with your local and/or state agencies, but you’ll have to research that as every city/county/state is different).
If you do incorporate, there are possibly some protections and advantages. There is also a lot more filing and reporting obligations and tax designations you may also need to determine.
You might hear around the industry that LLC is the most common form of incorporation for our kind of service-based business. However, that’s a generalization that doesn’t take into account your specific and unique business circumstances and information and the kind of work you are doing in your business and how you are doing it.
If you were to talk to a CPA or attorney, it’s possible they might tell you that depending on your stage in business, incorporating is too soon or not the right time just yet, or may be overkill, or may not give you the kind of tax breaks or protections you thought you might get.
There are just SO many variables unique to your business and your circumstances that have to be weighed and considered by those who are licensed and qualified to advise you properly.
So I can’t recommend highly enough that you do that so you can make the best decisions for your new business based on the right information from the right people. It would be irresponsible and unhelpful for me to tell you otherwise. And I wish for the best for you as well so I won’t tell you otherwise. 😉
Here is another blog post that touches a little bit more on this topic from another angle that you may also find some helpful tidbits in:
Dear Danielle: How Do I Pay Myself?
Also, just to let everyone know, you get an Introduction to Business Formations guide included when you purchase the Administrative Consultant Business Plan Set (FRM-32) from the ACA Success Store.
Thanks for the question. Hope this has been helpful. 🙂
Thank you so very much for the information!