If you take a look at the Terms of Use on this site, you will see the line “The Website is owned and operated by Brainstorming in Motion, LLC (“Brainstorming in Motion”).” I started my company, Brainstorming in Motion, LLC in 2014. Unlike some people, I never wanted to own my own company. I didn’t want to deal with hiring people, firing people, dealing with business taxes, paying business expenses and so forth. However, a limited liability company was the perfect solution for me. Here are a few reasons why I decided to start my own company and why I choose a LLC over a S-corp or C-corp.
Reasons Why I Decided to Start My Own Company
- Amazon had banned Minnesota from their affiliate program in 2014 and I really wanted to stick with it. I was making some decent money and knew it was going to be a big source of income for me in the future. The only way I could get back into the program was by opening a LLC in another state.
- I needed a way to separate my business expenses from my personal expenses.
- I felt like people, both online and in person, would take my work more seriously if I had my own business.
- I wanted some protection in case I got sued. While I doubt I would ever get sued, I don’t know for sure what the future will bring so I want to have my personal assets protected just in case.
Why I Choose an LLC Over an S-Corp or C-Corp
When you are doing business online, there are a few different ways you can go. First, you can stay a sole proprietor. This is the easiest option but may not be the best. Second, you can open an LLC and third, you can open an S-Corp or C-Corp.
Sole Proprietor
Being a sole proprietor is a great option for someone who is making money on the side or just getting started. You don’t have to file separate taxes, pay corporate taxes or change your name. You can even get a business bank account as a sole proprietor.
There are also plenty of reasons why a sole proprietor may not be a good choice. It is difficult to raise money or take out a business loan. You can’t hire employees nor can you sell your business. The worst part about being a sole proprietor is that if you get sued, they can come after your personal assets such as your house or car.
Limited Liability Company (LLC)
If you love the advantages of being a sole proprietor yet want to protect your personal assets, then a limited liability company is the option for you. LLC’s are designed for only one owner, however, you can have more than one owner if you wish. They also give you the ability to hire employees, get business funding & loans and you can sell or transfer the company. The only disadvantage, that I can come up with, is that you may have to pay a fee or tax depending on the state your LLC is based in. My LLC is based in Wyoming and I pay $255 per year. That includes a filing fee, a forwarding address, my registrar and any fees or taxes charged by the state of Wyoming.
Corporation (S-Corp or C-Corp)
I honestly don’t know the difference between S-Corp or C-Corp but I do know that corporations are tricky. It is a lot harder to start a corporation on your own. Plus, you have to pay separate taxes so there may be double taxation, however, you do get more tax breaks so you might come out ahead. If you have any questions about the advantages or disadvantages of opening a corporation, I suggest chatting with a CPA or lawyer. They can provide you with better advice than I can.
My Choice
I decided to open a LLC because it was easier than a corporation, yet it gave me more protection than working as a sole proprietor. I love having my own business. My friends and family take my online business more seriously now and it sounds cool to tell people that I’m a business owner. If you are considering starting your own business, speak to a lawyer or CPA (both would be better) to figure out what would be the best option for you. In the next post, I will go into detail about how I started Brainstorming In Motion, LLC and give you some advice on how to open your own LLC.