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Should I get a LLC

Discussion in 'Business & Tax Advice' started by stealth_eclipse, Apr 5, 2009.

  1. stealth_eclipse

    stealth_eclipse Newbie

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    So I'm currently making small sells with some e-cigarettes and other things and using drop shipping. My question is that since people are trying to get them banned and are clamming that they could be harmful to your health due to straight inhaling nicotine and it's not known the effects; Would it be in my best interest to get a LLC to keep my personal asset's safe? I don't want someone suing me over me selling them a product that was harmful. So should I worry about it or just keep on what I'm doing and wait till I start making more money. I see alot of posts that if your not making around $50k it's not really needed. Any ideas or thoughts are gladely apprciated. I'm buying at $20 a piece and selling at $120 a piece(Starter kit/ membership card). I'm selling at about 5 a day and have been pushing them more and more(just a little on the business side also I'm really the only one in the state selling these).
     
  2. blackmagiquellc

    blackmagiquellc BANNED BANNED

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    I would do it. Stay safe.
     
  3. premiumsource

    premiumsource Senior Member

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    Well, it is in your best interest to start an LLC and protect yourself because otherwise you could lose your shirt if people sue you. A word to the wise should be sufficient.

    P.S. They are very easy and inexpensive to start.

     
  4. blackmagiquellc

    blackmagiquellc BANNED BANNED

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    This should help you out:

    Code:
    [URL="http://www.myllc.com"]http://www.myllc.com[/URL]

    Good Luck :)
     
  5. blackmagiquellc

    blackmagiquellc BANNED BANNED

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    Where are you selling? Offline? Online through your own website?​
     
  6. Wex600

    Wex600 Newbie

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    would probably get offshore asset protection
     
  7. lemon

    lemon Jr. VIP Jr. VIP Premium Member

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    If they did take you to court it wouldnt' get very far as you just sold them the e-cigarette, it was them that took the nicotine and put it in the thing and smoked it.

    anyway I agree an LLC could be a good idea just in case, offshore asset protection would be more effort that it's worth unless you intend to avoid taxes (and you earn enough to make tax evasion worthwhile)
     
  8. innocent

    innocent Junior Member

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    Let's do the math...your earning $500.00 per day and you are worried about spending a grand to set up an LLC? This is a no-brainer!! Get the LLC (or S Corp).
     
  9. Warbucks

    Warbucks Junior Member

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    LLCs are a no brainer.

    http://mycorporation.intuit.com/

    It's dead cheap now. Just remember that it won't protect you if what your LLC, and in turn you, are doing is found to be fraud. If you're being knowingly fraudulent you can easily be found and brought up on criminal charges.
     
  10. purplepeopleeater

    purplepeopleeater Newbie

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    yea go for the LLC they're cheap. And they keep you safe.
     
  11. stealth_eclipse

    stealth_eclipse Newbie

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    Well I'm selling on and off-line. My worry is that since there not regulated and not tested if there are problem's I could be responsible for not telling them that complications could arise or whatever that are posted on like cigarette packs. I think I'm going to get it
     
  12. crashed

    crashed Jr. VIP Jr. VIP Premium Member

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    The people manufacturing the cig packs should have product liability insurance.

    I'm not sure if there is an insurance that you could get against it? Maybe someone else knows better then me?

    I'd definately go LLC though as that way its the company dragged through the mud n not you.
     
  13. beakman

    beakman Newbie

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    OK, I'm not a lawyer, but here's my take:

    An LLC is always a good idea for ANY business. Just another layer between you and the sharks in the water.

    That being said, I have a hard time believing anyone would sue you. Yeah, lots of people have sued over cigarettes and cancer, but they sued the manufacturer, not the store they bought the smokes in. You're in the same boat. Of course, I'm sure somebody somewhere tried it. I'd definitely talk to a lawyer who specializes in asset protection about it. If you're making $500 a day, a couple of hours of legal expense is a drop in the bucket.

    I'd say this, though, don't hold anything of value in the LLC's name: computers, cars, whatever. Don't let money pile up in the LLC checking account, pay yourself as often as is practical. If you do get sued, anything the LLC owns is up for grabs. That's why smart landlords use a separate LLC for every property. If a tenant sues, he can only grab the LLC's assets, which is only the building. If you own 10 houses with one LLC, a tenant could get all of them.

    +++++++++++++++++++++++++++++++++++++

    DISCLAIMER: I'm not an attorney, CPA, tax guy, etc., and can barely even find my keys in the morning, so this is just FYI and I don't make any claim, warranty, guarantee that it is accurate. Always consult a professional. That's what they're there for, and the good ones are worth it.
     
  14. tommysc

    tommysc Senior Member

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    I didn't want to start a new thread so I will just ask here...

    I've been making money online all 2009. I am just now getting around to setting up an LCC.
    This is for my CL business....

    My question is when I have to list my initial investment...what would that be? I already have a phone, PC, everything I need to do what I do. Hence I've been doing it for months already.

    Technically I could put $0 cash in and be OK... but do I could assets that I previously owned but now use for the business? Like can I count my darn PC chair? I mean what is this really meant for?

    Would it behoove me to simply take like $5k and put it in the biz account and call that the initial investment?

    I am just not clear on what to list here as I've been running this already as an "independent contractor" for some time now.

    -
     
  15. drey2k

    drey2k Power Member

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    IMO, Yes get the LLC.
     
  16. JohnDoe

    JohnDoe Junior Member

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    What's the main difference over a EIN as I am about to get a EIN if you are a LLC I understand you are protecting your own money but for ebay selling stuffing and small time money making I dont see how you will get dragged in to court.
     
  17. JonesersRX7

    JonesersRX7 Regular Member

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    Couple of things....

    Always prepare to get sued - it amazes me how many people say "why would someone sue little ole' me" In this litigious society you better bet your ass if you are in business long enough you will be a target.

    LLC is great for quick and easy liability protection. As far as active income it DOES NOT save you that much in taxes. Yes you can file a schedule S but that's exactly what an S-Corp does.

    So... bottom line if you are in business for yourself get at minimum an LLC setup and if you are generating active income in your business get a S-Corp to save on SE tax. And honestly... stop doing your taxes yourself and get a flippin' CPA.
     
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  18. JonesersRX7

    JonesersRX7 Regular Member

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    Seeing as that we are half way through the second quarter of 09' it's best you do it asap. A good CPA will assist you in being able to do a carry forward for that income.

    Go to the local community college or post on craigslist for a part time book keeper. Or get a book on general accounting. You would add that to your general ledger as the initial deposit to the new bank account when you get your EIN.

    And unless you purchased these things in 09' and have receipts you cant add them as "assets". You can't really depreciate them either. Only write them off as business expenses.
     
  19. Warbucks

    Warbucks Junior Member

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    There are two points here.

    1) Ask yourself why you SHOULDN'T get an LLC. When you struggle to come up with a reason, you'll realize the answer is "Hell yes".

    2) If a court determines that you have committed fraud, even through your LLC, all protection is off. An LLC protects you from frivolous lawsuits, but if you've been blackhatting ecigs by telling people they CURE cancer, there's not much that will prevent you from getting sued at a personal level. This is why I personally suggest blackhat methods for white (or light grey) products.

    There's no reason to NOT have an LLC. As I said in another thread, for $92 at freeregisteredagent.com (I have no interest in this) I got a New Mexico LLC, the first year of Registered Agent service for free (future years are $99) and an LLC with my name nowhere on public record, no yearly fees, and will last forever as long as my registered agent stays paid up.

    Of course, it's now been 22 days. New Mexico is heinously slow.
     
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  20. GreenGoblin

    GreenGoblin BANNED BANNED

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    ^^ I like that response,, thanks given.... I have 2 LLC's and its protects u from te B.S if u are a xtream blackhatter its important u you have one.