Hey hey! Happy Monday! This episode is a BIG one. It’s one of those foundational episodes that I will refer back to time and time again. We are diving DEEP into the three main types of business structures and tax designations for entrepreneurs and what each looks like. I am talking about tax implications, liability, risks involved, and what my suggestions and views are on each. This is a realllllly important episode, so I hope you tune in and potentially take notes along the way. Also, feel free to listen back to this episode every time you think you may need to change your business structure. Alrighty Legal Paigers, let’s do this!
In this episode we talked about:
· Where Paige started out as a sole-proprietor business owner and what she did as a novice owner, and where she is now (as of 2019) owning three Limited Liability Company (LLC) businesses.
· What Paige learned going through law school and how her education taught her to be a proper, legit business owner.
· The three main types of business structures: Sole-Proprietorship, Limited Liability Company (LLC), and S-Corporation (S-Corp).
· The kind of business structures that work for Paige.
· Tax forms/filing and designations for each business structure.
· The advantages and disadvantages of each business structure.
· Other forms of entities such as Single-Member LLC, Partnership LLC, and C-Corporations.
· Tips on what you should do before deciding which business structure is right for you!
Here’s a few quotes that we thought were awesome:
[6:00] “You should also be open to change and evolving with the times as your business grows.”
[9:49] [Sole-Proprietorship] “If you’re not willing to put your personal finances at risk, this is not the entity for you.”
[12:12] “Forming an LLC is like having your cake and eating it too.”
[14:54] [LLC] “It’s limited liability. The liability protection is not a complete protection.”
[15:51] [LLC] “You cannot pay for your personal expenses out of your business account or vice versa…also known as Piercing the Corporate Veil.”
[18:57] “An S-Corporation is not a business entity. It is merely a tax designation.”
[26:05] [S-Corp] “There can only be designated a reasonable amount of your income as wages.”
Links Mentioned On Our Show:
[As a reminder, I am legally obligated to give my disclaimer. I am an attorney, but I am not YOUR attorney. All legal information I talk about in this episode is indented for the masses and a large variety of different businesses. I am only your attorney when you hire me and we sign an engagement letter for me to specifically work on your legal issues. Please feel free to seek out another attorney in your home town if you need specific legal advice or contact me for information.]