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What kind of business to use? LLC? S-corp?

fuzzybabybunny

fuzzybabybunny

Moderator<br>Digital & Video Cameras
Moderator
i'm going to start up my photography business, first just doing real estate photography for realtors. wondering what i should be, an LLC, s-corp, or something else. i don't see this becoming that big - basically just as an independent contractor, and hopefully i don't end up taking pictures of houses as my career. if i do, it probably won't be in the role of a photographer out in the field, but rather providing a support service of some sort for other photographers. i already have the papers filled out for llc, but want to double check with AT.
 
I think you can be an LLC and an s-corp. That is how my husband's is. I am not an expert at all, so don't take my advice without other opinions first.
 
Originally posted by: fuzzybabybunny
i'm going to start up my photography business, first just doing real estate photography for realtors. wondering what i should be, an LLC, s-corp, or something else. i don't see this becoming that big - basically just as an independent contractor, and hopefully i don't end up taking pictures of houses as my career. if i do, it probably won't be in the role of a photographer out in the field, but rather providing a support service of some sort for other photographers. i already have the papers filled out for llc, but want to double check with AT.
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Depends on your finances, potential liability, insurance that you might be taking out. If you're serious about doing one, talk to your tax pro and lawyer and they should be able to select one for you, if appropriate.

*NOT LEGAL ADVICE*
If you're not going to be that big, consider buying business liability insurance. You're going to have to give a personal guarantee for any loan/credit you get anyways, so an entity isn't going to protect you there.



 
Your profile indicates you are in California. In CA, LLCs have a minimum $800 a year tax. You will want to keep that in mind.

-KeithP
 
I was looking at the same issue not long ago and figured that an LLC was the best way to go. I never asked my "tax professional" (mother-in-law who worked for H&R Block Premium for years), but I looked through the state small business site. I meant to attend a seminar this month -- oops.

If you want, I can ask my mother-in-law to see what she says.
 
sole proprietorship .... Get your assumed name, then get the LLC imo.

since you do not plan on being huge, stick with a sole proprietorship.

note - I am not lawyer, but this is what I did for my little business :0.
 
Originally posted by: ViviTheMage
sole proprietorship .... Get your assumed name, then get the LLC imo.

since you do not plan on being huge, stick with a sole proprietorship.

note - I am not lawyer, but this is what I did for my little business :0.
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in our litigation-happy society I would recommend Limiting your Liability when you decide to form a Company. A sole proprietorship doesn't afford you that protection.
 
LLC has less formalities involved.

Corporation has more flexibility in terms of ownership.

For you LLC is recommended.
 
Originally posted by: RKS
Originally posted by: ViviTheMage
sole proprietorship .... Get your assumed name, then get the LLC imo.

since you do not plan on being huge, stick with a sole proprietorship.

note - I am not lawyer, but this is what I did for my little business :0.
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in our litigation-happy society I would recommend Limiting your Liability when you decide to form a Company. A sole proprietorship doesn't afford you that protection.
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yup, I plan to do this in the next few months.

It's only 160$ and I have to refile every year, but refiling is free.

granted, I plan to expand...a lot.
 
The problem is that in California there is a minimum franchise fee for both LLCs and S-Corps of $800 as KeithP mentioned. You'll need to at least make that up in your business if you go either of those routes.

The first year there is no minimum however for S-Corps (it's strictly based on a percentage of the business income). For LLCs I don't think the first year exemption applies.

http://www.ftb.ca.gov/business...ctures/LLcompany.shtml
 
What kind of liability from a small photography shop are you anticipating? LLC may not be worth it. Stick to sole proprietorship.
 
Originally posted by: fuzzybabybunny
If I choose LLC now will I be able to convert to S-Corp or something else later?
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yes.


that is always the case .. u 1st form an llc and then apply for "S" classification.

u need to tell us or a cpa how much u make etc. and other detailed ifnancial info and then one can tell you if SE or paying urself wages will make sense ... in any case atleast do an llc ... get an amex costco card too ... remember the donuts & coffee to catch the RE in morning sunlight shot u buy for the realtor are business expense too 😀

best of luck!

 
iirc:
s - corp is a taxation classification, used only for income taxes, that allows the income of the limited liability form to pass through to the owner without getting double taxed.

the limited liability forms themselves are a function of state law and the election of what type of form is entirely up to the people who choose it.

off the top of my head the forms are corp., lp, llp, lllp, llc, and pc. here's the list for ohio. i'd get some local legal help on those forms.


Originally posted by: JS80
What kind of liability from a small photography shop are you anticipating? LLC may not be worth it. Stick to sole proprietorship.
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"HE RUINED MY WEDDING AAAAHHHHHHHH"
 
Generally with a sole proprietorship you only have a register a 'doing business as' with your town. There's almost no paperwork, no yearly fee, and you just report it as usual on your regular tax form. If you're doing an LLC, you'll have to go see a lawyer to get the paperwork done, and there will be a yearly fee from the state.
 
What assets etc do you have that will need to be protected? Incorporating costs money, if you aren't going to get any benefit from the money you spend there, why do it?

You want to learn a lot more about the types of business organization. What you described sounds like a good sole proprietor business. Though I don't know you, I don't know your situation, etc.

Please don't take my word for anything - go out and learn. Best of luck with your new business!

 
Originally posted by: princess ida
What assets etc do you have that will need to be protected? Incorporating costs money, if you aren't going to get any benefit from the money you spend there, why do it?

You want to learn a lot more about the types of business organization. What you described sounds like a good sole proprietor business. Though I don't know you, I don't know your situation, etc.

Please don't take my word for anything - go out and learn. Best of luck with your new business!
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I agree, your best bet is to use a sole proprietorship with a "DBA".

I.e. FirstName LastName Sole Proprietorship DBA Fuzzy Baby Bunny Photography.
 
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