Sole proprietorship or incorporation - what's the best way to start?

geoff613

Hi,

I'm currently doing some research in niche marketing business and I'm wondering if the best way to start off would be to begin as a sole proprietor, see how much income I actually can produce first, and if I become successful, to incorporate afterward. Would this be a good strategy to cut down on initial costs? And would my business nature be considered as 'e-commerce'?

Thanks,

Geoff

fudjj

Hi Geoff, if it is just you involved, then setting up as a sole trader is the easiest and cheapest option available to you for sure.

The big difference between a sole trader and a company structure, apart from the cost and taxation reporting styles being different, is the liability.

As a company structure, it's the company that holds the liability, as a sole trader, it's you and only you.

e-commerce (electronic commerce) covers any online trading business, so from what you have written above, yes, you would be involved in e-commerce.

planes

I'm no lawyer but an LLC is a good way to isolate yourself from business issues and gain a tax advantage.

An LLC works very well for older business people who no longer need to pay into Social Security ( They have maxed out their benefits.) as they can show a very low income and pay very little SSN, but still have access to the good things in life like a new car etc... , as long as they keep good records and a clear division between the LLC and their personal income.

A good way to start one is through LegalZoom. I have heard that lawyers even use the service for their clients and greatly limit their workload. Nice gig if you can get it.

geoff613

Awesome! Really appreciate the comments. Thanks guys!

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