If I were to have sole proprietorship, would my wife be considered an owner as well, or would I have to consider her an employee? Would we have to have an LLC to both be considered owners?
2007-06-04 08:59:50 · 6 answers · asked by mcc226 1 in Business & Finance ➔ Small Business
Don't set up a sole proprietorship in any situation. Any personal assets, cash, cars, etc. could be taken away in the case of a lawsuit.
I would suggest consulting with a corporate attorney before doing anything to establish what type of entity would be best for you situation. If you can't afford this or don't want to then setting up and LLC is probably you best case as LLC's are very flexible and provide ASSET PROTECTION.
Once again, do not in any case establish a sole proprietorship. As soon as you conduct business without working in the name of an entity you are establishing a sole proprietorship.
2007-06-04 09:06:40 · answer #1 · answered by Anonymous · 0⤊ 0⤋
You'll pay about the same taxes. However, the record keeping and administration of a corporate entity is usually much easier (although sometimes more complicated) than as a sole proprietorship. If you have an LLC, the LLC will need to pay you a salary, pay payroll taxes, etc. The downside is that you will have to do payroll reports, etc. at least once a month, usually every 2 weeks. If you have make sure there is enough money in the bank to pay the payroll taxes as they become due - you will be required to make certain tax deposits for this. Also, you need to pay unemployment insurance on the employees, which isn't that much but still another expense. The upside is that you just get a regular salary, so for your personal income tax return it is pretty simple - since the LLC already deducted your estimated taxes and FICA, you won't have to worry about paying all of that plus FICA and self-employment tax all at once at the end of the year. In addition, it's much easier to prove that certain business expenses are deductible if the LLC is paying it, versus if you personally are paying it. In addition, having a corporate entity will give you some measure of protection in case of liability.
2016-04-01 01:58:31 · answer #2 · answered by Anonymous · 0⤊ 0⤋
If it is a Sole Proprietorship then you are the main boss and main owner-- There are some very interesting benefits but also some down sides. (That I will get into further if you would like to talk)
But being Sole Proprietor means that she will have to be hired on as CEO or a suitable title.
A Limited Liability Company has nothing to do with being Sole Proprietor.
I would definitley suggest taking some small business courses. And I think the best bet for you and your wife would be an LLP (Limited Liability Partnership) You guys can split the resonsibilities 50/50 or however you see fit 30/70, 40/60,etc...--Also with asset protection.
2007-06-04 09:12:37 · answer #3 · answered by Anonymous · 0⤊ 0⤋
LLCs have the option of being treated as a sole proprietor, partnership or a corporation. If you're a corp, any officer of the corporation is an employee of the corporation. If you're a sole prop or a partnership, neither of you would be considered an employee for employment tax purposes.
2007-06-04 09:10:12 · answer #4 · answered by cashmaker81 6 · 0⤊ 0⤋
Don't even consider an sole proprietorship. If you get sued, your personal property can be taken.
2007-06-04 14:49:56 · answer #5 · answered by jdkilp 7 · 0⤊ 0⤋
I would say technically no, since it is marital property, and technically it belongs to her anyways. Even if she is listed on it or not, it still is hers.
2007-06-04 09:03:31 · answer #6 · answered by bpl 5 · 0⤊ 0⤋