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LLC benefits (going from Sole Proprietor)

hello,

i need to incorporate my sole proprietorship. i was on a "incorporate in delaware" site today, and i read their FAQs about LLC vs. S-Corp. it seemed pretty informative, and made me think perhaps LLC was right for me in my transition.

question -- is the LLC in delaware going to have the same benefits as the LLC in my (random) state? or do they vary from state to state? i was primarily interested in the:

- no corporate taxation (as the sole employee, id pay taxes on my income only) - stronger corporate veil - less formalities required

..from here:

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068#3. so i checked my state, LA, and found its way cheaper to file a LLC myself in just a few days. but it sounds like the LLC details are in fact specific to the state, and what i read above may not be the same in LA.

any pointers?

thanks, matt

Reply to
matt
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wrote

LLC laws vary from state to state, so what may apply in one state may not be the case in another state. If you have a specific issue in mind, talk to an attorney in your state who is familiar with LLC laws. It doesn't matter what state you form your business in, you'll still have to file (and pay the fees) in the state you operate in (in your case Louisiana) as well as the state of formation (you're thinking about Delaware). So all you have done is to create additional paperwork and more fees to pay by forming in a state other than the one you will locate your business in. A single member LLC is treated as a sole-proprietor for tax purposes, unless you elect to be taxed as a corporation, in which case it might be wise to just incorporate from the git-go. Single member LLC's do not provide any tax advantages over a sole-proprietor. I doubt any single member LLC's create any level of privacy (ie: corporate veil), because your clients, suppliers, vendors, and lenders will most likely know about you - the person they are dealing with.

-- Paul Thomas, CPA snipped-for-privacy@bellsouth.net

Reply to
Paul Thomas, CPA

that may be true regarding only taxes, but the paperwork and maintenance issue of an LLC are likely less complex than that of a corporation.

the "corporate veil" is not a privacy matter - it is a matter pertaining to whether the owner(s) of the corporation may be held personally liable for corporate debts. with respect to single member LLC privacy, if you have to give a SSN as your TIN, people with a bit of brains can figure things out. The way to avoid this is for the LLC to get its own TIN, which I guess amounts to an election to be taxed as a corporation. I didn't bother. I have the "corporate veil", and a bit of privacy, but not full privacy.

Reply to
Gil Faver

"Gil Faver"

Reply to
Paul Thomas

"Gil Faver" "corporate veil", and a bit of privacy, but not full

Even a sole proprietor can get a TIN for his business, so getting one shouldn't imply any election whatsoever. Stu

Reply to
Stuart A. Bronstein

Gil Faver

Reply to
Arthur Kamlet

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