Sole Proprietor or LLC

[KM]

How many of you out there are using LLC versus sole proprietorship?  On my route, I have 25 triple head 1800s that make a little extra cash for me on the side.

Some people have suggested applying for an LLC to have less liability for the machines etc.  Do you think this is the best way to go?  My understanding is that I would have liability coverage if something happens with the machines and also I would pay lower taxes etc.  Although I am not sure about business licenses for every city and such.  Would I still have to apply?  I'm running machines charity based.

[Kink]

I have seen this come up many times on several different forums. I would like to relate my position. The pension plan I have thru my day employer does not allow me to setup a Corp. or LLC. I should not say allow, but money will be deducted from your pension at a 1 for 2 dollar rate if your name is on a Corp. or LLC. I have also talked to my tax lady and she kept books for many businesses that were SP and doing close to a million dollars in gross sales. Make sure you do your homework.

Thanks

[KPower]

That is interesting info Kink I will have to check into this. Even though my goal is to be free of my corporate shackles I am not now and have no guarantees that I will be at this point. It's only prudent to educate yourself.

[T BIRD]

My wife and I set up T Bird Vending as a LLC.  I need to find out if that helps in terms of being less liable in the event of an accident.  I have heard that a LLC limits the amount of liabilty against the owners. ( I think ) At the moment I have no bought insurance.  I am about to place our first 8 machines next week.

[Zeke]

T-Bird,  with the amount of machines that you have as of right now I wouldn't worry so much about insurance.  Wait until your a little more established.  From what I have seen the insurance company's really don't go out of there way to help.  I originally had blanket coverage for my full line side of my business.  A total waste.  They ended up dropping my coverage because they felt that they had no idea where the machines were placed.  It was a hassle and waste of time and money.  This is all in my humble opinion.  But I would wait until you have a bigger route.  The money you would spend on insurance would be better served getting more heads out there. Hope this makes sense?

 

Zeke

ps. I hope I didn't get to far off the topic.  We are a LLC which works for us at the moment.

[T BIRD]

Thanks for the advice Zeke.  It does make sense.