So, if you sell children's items and your business is a sole proprietorship

[Dannielle]

And you plan to stick it out, have you considered becoming a LLC?

What about insurance? Do you have liability insurance now? Will that change?

You can consider this rhetorical if you prefer. These are thoughts I've been mulling over.

[LittleElephantCo]

Keep in mind that insurance is very costly.

Becoming an LLC is a good idea. It costs less than $200 (around $130, I think), and you can do it online (I don't remember where) yourself. Or you can pay an attorney to go to the same website and fill out the same forms.

[Former_Member]

Try nolo.com or legalzoom.com for low cost legal matters, and information.

[Former_Member]

Here is another question to throw out there...

There is also a SMLLC (Single Member) has anyone thought of going that route. I am basically a hobby but looking to do all the business work..don't know where to start though. Wanted to see what everyone's opinion was on the SMLLC

[Former_Member]

I paid quite a bit more than $130 for my LLC. One has to factor in attorney fees as well.

[Former_Member]

intriguing.

hmm..

[Former_Member]

If I can continue with Suppliers giving me the certs I need rather than having to retest the finished products (I am really hoping for that ammendment at least), then I will go the LLC route. My DH and I were just discussing it today. We can't lose everything we have on this should something go wrong....

[Superflykidz]

Forgive me for my ignorance - what is the potential benefit to going LLC?

[LittleElephantCo]

My neighbor works for an attorney and specifically does LLCs, so she sat next to me while I filled out the forms. I was very surprised at how east it was. It did help that she had given me the basic wording for one section.

[Former_Member]

Superfly,

LLC has the benefits like a corporation but not all the paperwork meetings etc. a Plus of being a LLC over sole-prop is that if your business goes down the tube the LLC is responsible for debts instead of your personal assets

[Former_Member]

FeltHungry,
I am a Hobby also. What is A SMLLC?
Helene

[Former_Member]

I have been considering this as well, but if I got slapped with a $100K fine for selling a non-certified dress, it's the goverment...I'm sure they could come after me personally, not just my business.

[Superflykidz]

Thanks for the clarification FeltHungry. If I get all of my components/samples of my products tested using the XRF and it turns out to be sufficient, should I still consider LLC? How much is the insurance?

[Former_Member]

I created an LLC for my fabric shop for less than $100 - registered with the state, no attorney fees, got my EIN online as well - I haven't done that for my learning toys/quilt shop yet but considering it

[Former_Member]

Humble,

I feel more and more I need to get all the legal paper work done since I am having more and more sales...I am utterly confused about it all even though its suppose to be simple.
I was reading on NJ's state website about LLC's and I came across something called Single Member LLC. Its basically having the benefits of LLC but will only ever have 1 employee (yourself)

Here is where I found out about it..It's all New Jersey's page for starting a business

http://www.nj.gov/njbusiness/starting/

Let me know if it makes sense to you lol

[Former_Member]

fern,

Now how do you pay taxes? Is there business taxes? I am not the brightest with business stuff

[meredithdillman]

I believe taxes are the same as if you are a SP. I have to fill out my personal forms and then the LLC forms. Send the LLC forms seperately because they are counted as a person, but don't need to send any extra money with those.

[Dannielle]

I think the difference is that if something bad were to happen and your business is a LLC, the worst that can happen is the business dissolves. The business is the entity that is liable...not you personally.

If you're a sole propriotor and something bad happens your personal assets risk being lost (savings, home, etc).

I'm not sure about taxes. My guess (totally a guess) is that the business would have to do it's own taxes, separate from your family. One of the business' expenses is your income. Then you'd claim your income with whatever form (1099, W-2, I dunno) like a typical job.

I think. Maybe. Something like that.

[Former_Member]

This law is just one of the many reasons everyone should be an LLC. If you aren`t and someone was to sue you, you stand to lose everything, your home, assets, investments, personal effects, everything. If you are an LLC you stand to lose just your business.

[Former_Member]

superflykidz says:
Forgive me for my ignorance - what is the potential benefit to going LLC?
___________________________

Here is the IRS definition of an LLC, or Limited Liability Company

http://www.irs.gov/businesses/small/article/0,,id=98277,00.html

[Former_Member]

Interesting. I am a sole proprietor, but I do have business insurance. My policy won't cover government fines though, pretty sure.

[Former_Member]

It's easy to become an LLC and doesn't cost much. I did mine directly with the state of CO and because I filed electronically it was $50. I checked my expenses and that is all I paid. I also have an EIN and don't think it had any cost associated with it.

The cost of filing a trademark cost me much more than the LLC.

[Former_Member]

I am a sole proprietor and have business insurance up to $2,000,000 per year through Hartford. I don't plan to go to a LLC just yet.

[Former_Member]

Here are some notes I wrote down for a friend on what it takes to get started.

-get a po box
-open a business checking account
-register with the state as an LLC, corporation, etc
-Create an EIN number with the gov. (employer identification number. When you are ordering wholesale you often times have to provide this number).
-find a website hosting provider (if you are started your own website - godaddy.com is pretty a good cost).
-figure our your website name and availability - you can check the availability at godaddy.com
-register your domain name
-purchase and SSL certificate for your website if you are going to need a secure connection (accepting payments online)
-if you will accept payments online you can do this free through paypal (although they leave your site to make a payment) or you can find a payment provider to process all transactions directly at your website (ex. authorize.net) but you pay a monthly fee with these providers
-register your trademark and check availability before committing to any business names (if you want a trademark)

Here is the CO link for getting started and basic questions.
http://www.colorado.gov/cs/Satellite?c=Page&childpagename=OEDIT%2FOEDITLayout&cid=1154721645662&p=11...

[Former_Member]

To Cheeky :)

Google accepts transactions just like paypal, without any monthly fees and transaction fees that are lower than PP.

For the last 10 years, I have hosted my websites with Dreamhost.com. I just purchased 2 domains and have full hosting services for both for under $130/year ($120 hosting + $10 to register 2nd domain). This annual hosting fee includes unlimited disk storage, unlimited bandwidth transfer, unlimited POP accounts, and a gazillion of other stuff. And they're not a major corporation. Anyway, just my 2-cents' worth. :)