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Need advice on LLC

Discussion in 'Business & Tax Advice' started by rjlvariety, Sep 19, 2011.

  1. rjlvariety

    rjlvariety Newbie

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    I am relatively new to reselling, and could use some advice. I am strongly considering signing up with Worldwide Brands. I wish to purchase items from wholesalers for resale on sites like Ebay and Amazon. While browsing another thread, I saw where someone advised that before doing this, it would be good to start an LLC. From what I can gather, an LLC is not necessary. If my information is correct, all you need is a Tax ID, resellers certificate from the state where you will be doing business from, a business bank account, and you're good to go. So, my question is, why would it be good to start an LLC before beginning this venture? What are the pros and cons of the LLC when it comes to dropshipping and reselling? Any feedback and advice is greatly appreciated. Thanks!
     
  2. jonnyquest

    jonnyquest Regular Member

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    Not a matter of pro's and con's but whether you want to expose your personal property and assets to anybody that wants to sue you.

    As an LLC and operating your business as such it is a sole and separate entity in all U.S. states I would guess. The LLC is responsible for all assets and liabilities protecting your personal assets.

    So no, you don't need an LLC to open a business but would be a good idea if you start generating some $$.

    Be careful though many creditors are wanting a personal guarantee on some credit accounts and cc cards. Read the fine print when you start applying for credit.

    JQ
     
  3. Dan Free

    Dan Free Regular Member

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    If you are planning on doing Amazon, is your state considering doing what a few other states have done and attempting to tax Amazon and therefore Amazon fought back canned all affiliates in those states. This happened to me in Colorado and it has happened in other states such as California (though California looks like it is trying to fight back with a ballot initiative).

    So, you may want to set up an LLC in a safe state without taxes on businesses. Seek legal advice.
     
  4. redrhino

    redrhino Registered Member

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    Set it up in Delaware, trust me! I have Inc and LLC in Delaware it's only annual Franchise Tax $200 and of course Federal Tax report to IRS. Everywhere else is always something which ruins your day. Go with Delaware and you don't need a lawyer for registration. You will need the lawyer only to protect yourself if you start growing big.

    Once you have LLC registered you apply for EIN online.
     
  5. Cnotey

    Cnotey Power Member

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    LLC's never get taxed anyways. One of the reasons people use LLC's is because of the tax flexibility that comes with it. You can either be taxed as a sole proprietor, a C corporation, or an S corporation.

    At $200, creating an LLC will be the best business decision you ever make.
     
    Last edited: Sep 20, 2011
  6. KREAM

    KREAM Junior Member

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    great advice, never knew this about LLC's
     
  7. funkienz

    funkienz BANNED BANNED

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    newbie here. Can i open a LLC in usa being outside of USA?
     
  8. ooodaveb

    ooodaveb Junior Member

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    Yes you can. There are various LLC forming entities you can find online who'll act as your registered agent for you.

    Pick a state you want to form in and they'll do the work for a fee. Obtaining EIN etc are a rip off add on they do when forming LLCs you can do it online yourself.
     
  9. Rubix101

    Rubix101 Regular Member

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    I opened up my LLC in Nevada and it was a great decision. Cheap to start, flexible tax rules, and you don't have to live in the same state to have it. Once you have something to lose start opening LLCs for all your big possessions like your cars and boats etc. That way no one can sue you for all your worth lol
     
  10. blackmagician

    blackmagician Newbie

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    Hello dear friendz, can I set my LLC's principal office address with the address of my usa friend, although he is not involved in my LLC any way? I'm outside of USA.
     
    Last edited: Sep 24, 2011
  11. MrSofteeMan

    MrSofteeMan Newbie

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    If you have an LLC, you can also write off a lot of purchases so they are tax deductible.
     
  12. cybersage

    cybersage Regular Member

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    LLCs cost little to setup and provide many benefits. I know the advantages very well because I practice in business law. Basically people use LLCs for different reasons, but one of the big ones is that it keeps the members of the LLC (aka the owners) behind a limited liability shield. Any liabilities of the company are limited to the company and not the individual's personal assets. The limited liability shield is most often what people are seeking, but it is most useful when you have employees, because while you may have limited liability status, that status will not protect you from personal liability occurring through your own negligence.

    While you can write off taxes related to business expenses with an LLC, there is no reason that you cannot do this as a sole proprietor; in fact in the US an LLC is what is considered a disregarded entity, meaning that LLCs are taxed like general partnerships or a sole proprietorship, as opposed to a corporate which is subject to double taxation.

    Deciding the place of LLC formation is also important because corporate law is largely based in State statute meaning that each state has different rules. Some states are better for asset protection LLCs because they don't force a sale of a member's interest, should there be an adverse judgment.
     
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  13. b1step-ahead

    b1step-ahead Power Member

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    IF your starting out, start small and cheap- just file as a sole prop. In california, it cost the money to file a LLC, I forgot what I paid, and a 800 llc tax. The nice thing is you can keep your llc and change the name later down the road. I would hold off for now untill you really need it.
     
  14. madBlackhatter

    madBlackhatter Registered Member

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    I opened up a business through Delaware. A lot of Forutne 500 companies go that route.

    Benefits going through Delware are:
    More businesses choose Delaware because of its favorable and business-friendly environment, which offers numerous benefits in convenience, tax liability and legal protection. Here are just a few:
    • In Delaware, one person can hold the title of each of the officers of the business.
    • Delaware has no requirement for a minimum balance in the company's bank account. This is in contrast to a number of states that require a $1,000.00 minimum bank balance.
    • Business owners can choose to file business formation papers anonymously in Delaware to maintain privacy.
    • Delaware imposes no state income tax on a business that does not operate within the state.
    • • Businesses formed in Delaware enjoy the benefits of an established body of laws and a Chancery Court. Both are unique in the way they settle legal disputes, which helps business owners focus on running their companies rather than on protracted court proceedings. This legal system and judiciary process exist only in Delaware.
    • Directors are free to set any price on shares of stock they wish to sell.
    • Forming a business in Delaware is straightforward and uncomplicated, and doing so online, by phone or by mail through Harvard Business Services, Inc. is fast, easy and affordable.
    • Anyone can form a business in Delaware through Harvard Business Services, Inc. without ever setting foot in the state. Delaware's Division of Corporations is the best in the world at processing business formation filings quickly and encourages entrepreneurs from across the country and around the world to form their businesses here.
     
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  15. kideze

    kideze Elite Member

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    realish ish u ever wrote
     
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