There are all sorts of circumstances you will find that having and LLC is a chance to go through the easier/faster door. The whole article starts off with a painful javajoke and the punchline is sometimes you need to go really fast. That's what already having an LLC handy for helps with.
Recent personal discovery about an LLC, useful for gaining PDK access to proprietary fabs, so I can finally try touching lower process nodes again that are not open source, despite being out of university and not having a job that gives me the PDK access.
I feel like a lot of people (not holman) are looking for permission, as if having an LLC is a marker that says "I am a serious business doing serious business things." You don't need permission. You can just do things.
A formal business structure is good (but not required!) if you have employees and/or business partners, or if your attorney tells you you need one. IME as a solo entrepreneur an LLC (or two, in my case) just invited more paperwork into my life.
You know what actually functionally limits liability as a solo business? Good contracts backed up with business insurance.
Seeming serious is often needed for others to do business with you. E.g. I believe ARIN and APNIC will only let companies hold internet number resources (while RIPE will also allow sole proprietors, but that's only relevant if you're in Europe). Enterprise B2B companies just don't have their systems set up to deal with sole proprietorships.
An LLC does help with getting a proper EIN and DUNS number which helps greatly in establishing trust in a relationship with a new client.. Yes it absolutely helps with accepting payments.. having an EIN is necessary in many cases..
No it doesn't. Sole proprietors can get DUNS numbers just fine. It's literally the first option when you tell them how your business is structured right after telling them your name and email address.
> "Yes it absolutely helps with accepting payments"
A billion people accepting payments in every possible form without being incorporated say that you're wrong. No method of payment processing, from credit cards to memecoins, cares whether you're incorporated.
> "having an EIN is necessary in many cases"
Again, getting an EIN and forming an LLC are completely unrelated.
You can certainly use all of those mediums via consumer fintech, but you will often find yourself limited to products which are designed for consumers, and many B2B service providers may refuse to work with you.
Nobody said consumer fintech? You can just operate as a business. "Sole proprietor" is a real thing that almost every service knows how to deal with, and if one can't there's a competitor willing to right next door.
Forming an LLC doesn't make separating finances any easier. It doesn't help you do it or help you force yourself to to do it. My objection is specifically to the claim that it helps you do anything. It doesn't.
Also, you should separate finances as a sole proprietor too.
LLCs are great, but you should be aware that single-member LLCs may offer less liability protection than you expect, and in some circumstances it can be easier to pierce the corporate veil.
For all these things I think just having an EIN is simpler.
You don’t even need that to start; you set up Capital One (for example) business accounts using your SSN. The EIN is just to avoid putting your personal SSN on invoices.
LLC matters if you think you’ll have liability risks.
>The EIN is just to avoid putting your personal SSN on invoices.
In order to do that, your LLC has to elect to be taxed as an S-corp, which requires it to file its own return. Worse, certain states and cities will impose a corporation tax on it.
Otherwise, if you retain disregarded entity status, you have to use your personal SSN for invoices. The corporation EIN is then mostly for employment tax purposes.
(Not actual tax advice)
"For example, if a disregarded entity LLC that is owned by an individual is required to provide a Form W-9, Request for Taxpayer Identification Number (TIN) and Certification, the W-9 should provide the owner’s SSN or EIN, not the LLC’s EIN." [0]
As someone living in Taiwan, can I set up an LLC and get all the benefits of it?
I now have a Singapore entity that helps me out for getting a Stripe account mainly.
I agree that if you're engaging in the tech business you should have an umbrella llc. I have been asked multiple times to do projects for people and it's always easier to invoice as an llc with everything already set up.
However most software engineers don't engage in the tech business at all outside of regular employment. It's not useful for them
Depends on what's your goal. Privacy and the least amount of paperwork? Probably a place like Wyoming, where your annual report is a single page saying "yeah I'm still alive". But an LLC will usually need to be parallel-registered in the state it's doing business in, so if it's a pain-in-the-butt state like California, might as well register it here - you're not escaping their fees and paperwork either way.
If you live in California, you likely have to register in California. So you really only have one option, unless you want to register in two places. You’ll also have to pay at least $800/year for the pleasure.
>Cost-wise it’s maybe $500 a year, all in (unless you have the pleasure of living in California, in which case you have to add their inane $800 on top). But that’s pretty reasonable considering the optionality it gives you to just… build shit these days.
You don't need an LLC to build things and sell things. And you also get the downsides of needing to stay at an office to be able to be served or having to have your active home address be publicly viewable.
additionally many RAs offer mail forwarding/virtual offices (that can even accept deliveries) for pretty affordable , eg northwest registered agent offering seemingly millions of sheridan wy suites
There are all sorts of circumstances you will find that having and LLC is a chance to go through the easier/faster door. The whole article starts off with a painful javajoke and the punchline is sometimes you need to go really fast. That's what already having an LLC handy for helps with.
Recent personal discovery about an LLC, useful for gaining PDK access to proprietary fabs, so I can finally try touching lower process nodes again that are not open source, despite being out of university and not having a job that gives me the PDK access.
I feel like a lot of people (not holman) are looking for permission, as if having an LLC is a marker that says "I am a serious business doing serious business things." You don't need permission. You can just do things.
A formal business structure is good (but not required!) if you have employees and/or business partners, or if your attorney tells you you need one. IME as a solo entrepreneur an LLC (or two, in my case) just invited more paperwork into my life.
You know what actually functionally limits liability as a solo business? Good contracts backed up with business insurance.
Seeming serious is often needed for others to do business with you. E.g. I believe ARIN and APNIC will only let companies hold internet number resources (while RIPE will also allow sole proprietors, but that's only relevant if you're in Europe). Enterprise B2B companies just don't have their systems set up to deal with sole proprietorships.
> "An LLC will help you force a separation of personal and work finances"
No it won't.
> "it’ll help you accept payments"
No it won't.
> "or sign up for a bank account"
No it won't.
An LLC doesn't make those things any easier than they already are (very easy) as a sole proprietor.
An LLC only does the liability thing. And that's fine. Just don't make other things up. You don't need to.
Some vendors will only deal with companies (of all types) and refuse sole proprietors as customers.
An LLC does help with getting a proper EIN and DUNS number which helps greatly in establishing trust in a relationship with a new client.. Yes it absolutely helps with accepting payments.. having an EIN is necessary in many cases..
> "An LLC does help with getting a proper EIN"
No it doesn't. Sole proprietors get EINs just fine. It's literally the first option on the first page of the application. https://sa.www4.irs.gov/applyein/legalStructure
> "and DUNS number"
No it doesn't. Sole proprietors can get DUNS numbers just fine. It's literally the first option when you tell them how your business is structured right after telling them your name and email address.
> "Yes it absolutely helps with accepting payments"
A billion people accepting payments in every possible form without being incorporated say that you're wrong. No method of payment processing, from credit cards to memecoins, cares whether you're incorporated.
> "having an EIN is necessary in many cases"
Again, getting an EIN and forming an LLC are completely unrelated.
There are many financial products which require business incorporation.
"Financial products" is vague, so what if we just go down the list of payment methods and see which ones require being incorporated.
Credit card? No. ACH? No. Wire transfer? No. Cash? No. Crypto? No. Check? No. IOU on a napkin? No. Pokemon card? No. Sex? Weirdly illegal in most places, but still no.
...uh...which ones did I miss?
You can certainly use all of those mediums via consumer fintech, but you will often find yourself limited to products which are designed for consumers, and many B2B service providers may refuse to work with you.
Nobody said consumer fintech? You can just operate as a business. "Sole proprietor" is a real thing that almost every service knows how to deal with, and if one can't there's a competitor willing to right next door.
It doesn't force you to do anything, same as a sole proprietor.
What it does do is that since it provides a rigid structure, it compels law abiding citizens to do those actions, not forcing still.
You would have a hard time proving liability if you didn't have separated finances.
Forming an LLC doesn't make separating finances any easier. It doesn't help you do it or help you force yourself to to do it. My objection is specifically to the claim that it helps you do anything. It doesn't.
Also, you should separate finances as a sole proprietor too.
LLCs are great, but you should be aware that single-member LLCs may offer less liability protection than you expect, and in some circumstances it can be easier to pierce the corporate veil.
Single-member LLCs may reincorporate as any other type of corporation to meet growth, or other needs.
For all these things I think just having an EIN is simpler.
You don’t even need that to start; you set up Capital One (for example) business accounts using your SSN. The EIN is just to avoid putting your personal SSN on invoices.
LLC matters if you think you’ll have liability risks.
>The EIN is just to avoid putting your personal SSN on invoices.
In order to do that, your LLC has to elect to be taxed as an S-corp, which requires it to file its own return. Worse, certain states and cities will impose a corporation tax on it.
Otherwise, if you retain disregarded entity status, you have to use your personal SSN for invoices. The corporation EIN is then mostly for employment tax purposes.
(Not actual tax advice)
"For example, if a disregarded entity LLC that is owned by an individual is required to provide a Form W-9, Request for Taxpayer Identification Number (TIN) and Certification, the W-9 should provide the owner’s SSN or EIN, not the LLC’s EIN." [0]
[0] https://www.irs.gov/businesses/small-businesses-self-employe...
> or EIN
Anyone can get an EIN for their sole proprietorship business (just one, though) and use it on tax forms.
As someone living in Taiwan, can I set up an LLC and get all the benefits of it? I now have a Singapore entity that helps me out for getting a Stripe account mainly.
I agree that if you're engaging in the tech business you should have an umbrella llc. I have been asked multiple times to do projects for people and it's always easier to invoice as an llc with everything already set up.
However most software engineers don't engage in the tech business at all outside of regular employment. It's not useful for them
A question is: where do you register one? Should it be Caymans or Panama or South Dakota or Texas or Delaware or your home state?
Also, what type of LLC should it be?
Depends on what's your goal. Privacy and the least amount of paperwork? Probably a place like Wyoming, where your annual report is a single page saying "yeah I'm still alive". But an LLC will usually need to be parallel-registered in the state it's doing business in, so if it's a pain-in-the-butt state like California, might as well register it here - you're not escaping their fees and paperwork either way.
Delaware is for big companies.
If you live in California, you likely have to register in California. So you really only have one option, unless you want to register in two places. You’ll also have to pay at least $800/year for the pleasure.
hello from an old TotalSpore-head :)
Well if nothing else I feel a bit better having an llc sitting around doing nothing.
>Cost-wise it’s maybe $500 a year, all in (unless you have the pleasure of living in California, in which case you have to add their inane $800 on top). But that’s pretty reasonable considering the optionality it gives you to just… build shit these days.
You don't need an LLC to build things and sell things. And you also get the downsides of needing to stay at an office to be able to be served or having to have your active home address be publicly viewable.
That's specifically the $100 of the $500/year fee; you pay for a registered agent to handle all that for you (and shield your address).
additionally many RAs offer mail forwarding/virtual offices (that can even accept deliveries) for pretty affordable , eg northwest registered agent offering seemingly millions of sheridan wy suites
whats the uk equiv?
A ‘Registered Limited Company’, as in ‘Widgets Ltd.’. Per the ‘Limited Liability Companies Act’ of 1855.
Why does everything need to make money so bad, this is terrible advice
"Everything" doesn't need to make money so bad. But if you're interested in making money on the internet, this is good advice.