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It’s important to take care of the basics and set the foundation as you build your road to financial freedom on the Internet. In this episode we talk about the different kinds of business entities (LLC, S-Corp, C-Corp & Partnership). We discuss the ins and outs of starting your own business entity and questions such as:
- When should you create a business entity?
- How do you create a business entity?
- Why should you create a business entity?
- What is the hidden benefit of starting a business entity now (Hint: it’s part of the success mindset)
- Which is better…an S-Corp or LLC?
- and more…
Disclaimer: We are not lawyers or accountants. We do not render professional advice in this podcast. You are responsible to do your own research and make your own decisions. We are simply sharing our experiences.
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Thanks for another informative episode.
A question for those of us starting several small affiliate type sites as a secondary income. Lets say over the next year or so I create 10 unrelated niche type affiliate websites. Could there be, or would you recommend an umbrella LLC that would incorporate each of these sites into one “business” (as opposed to creating an individual LLC for each an every website.)
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Bryan,
Of course, you need to talk to your accountant & lawyer, but here are the trade offs as I see them.
Having one umbrella business for all of your sites is easier logistically, but having one business entity for each site protects the assets of each individually from anything that could happen related to one of the sites.
Hope that helps.
Jay
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Hey-
You mentioned in this podcast that you did alot of the work for incorporating your business online. I have looked around and most of the websites that do this charge hundreds of dollars. I was wondering websites you used to do this?
I love your podcast. I fell in love with after I heard the first one. I even went back and downloaded all your older ones!
KEEP UP THE GOOD WORK!
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First, I have used legalzoom.com to incorporate all of my businesses and they are fast, easy and pretty cheap.
Second, In regards to the umbrella LLC (I am not a lawyer nor an accountant and as Jay mentioned, you should always refer to one), a asset protection method that I was taught was to create your silos of liability by incorporating a LLC for each site/business, this spreads out your liability so if one of your sites/companies gets sued it doesn’t impact your other sites. Then you can either have all the LLCs flow directly to the members or be taxed as a corporation, which I personally liked about an LLC is to have that flexibility. Most LLCs income flow to the members unless that LLC is going to retain a lot of those earnings, then it becomes more beneficial to tax as a corporation. Another idea that I have seen others use is to put their LLCs under an umbrella corporation S-Corp/C-corp, which in some instances allows for greater tax benefits. Again, I am not an accountant nor a lawyer, but these are some of the methods I have picked up from those working with accountants and lawyers.
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Be sure to listen to IBM # 20 EP as they talk about how Corporations ARE NOT usually shielded from ‘personal’ liability legal matters, even though you can be protecting your personal assets from any ‘corporate’ liability legal matters (when properly set-up, of course). Confused? Listen to # 20.
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