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LLC or sole proprietorship?

Union City, CA |

Hello,

I am starting my image consulting business and was wondering what kind of structure I should choose.
I will be the only employee. Basically, people will hire me in order to come to their home and revamp their closet. They can also hire me to go shopping with them so I can create outfits for them. There is no business space required. I operate my website from my home office and I meet clients at their home or at the mall.
I do not expect to make much money out of it (i have a full time job on the side) but I am trying to see if this is something that could be developed as a full time job in the future.

Also, since I will be operating from home, do I need to get a local business license and a business permit from the City and County ?

Thank you for your precious help!

Attorney Answers 4

Posted

I would not go to the expense of an entity until it is economically justified by your income. I would substitute a very good liability insurance policy (customized to your needs) and a good contract with your customers (e.g. no advance of funds for customers, method for confirming instructions, change orders by clients, etc.) A business license would be prudent, but I would call the local office to see if it is actually necessary.

The above is general legal and business analysis. It is not "legal advice" but analysis, and different lawyers may analyse this matter differently, especially if there are additional facts not reflected in the question. I am not your attorney until retained by a written retainer agreement signed by both of us. I am only licensed in California. See also avvo.com terms and conditions item 9, incorporated as if it was reprinted here.

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2 comments

Ripal Patel

Ripal Patel

Posted

Great Advice Mr. Doland.

Michael Charles Doland

Michael Charles Doland

Posted

Thank you Mr. Patel. You are consistently kind in your comments and accurate in your analysis.

Posted

If you are doing business in your municipality you need to get a business license and will have to pay an annual tax for a very small percent of your annual gross sales.

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Posted

Mr. Doland provided you with great advice. I would say, have an Attorney draft you some good contracts. Wish you the best.

Sincerely,
Ripal Patel, Esq.

Your particular situation may be different. This answer is intended for information purposes only. No Attorney-Client relationship has been established. I am an attorney in the Bay Area.

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Posted

I concur with my three colleagues. You will undoubtedly need a local business license and will be required to pay an amount depending upon your annual income. You need to have sufficient insurance to cover the type of service you will be providing. As there could be a significant amount of expense incurred in setting up an LLC, I would also recommend holding off on setting one up until you have a successful business on-going. Finally, I would strongly suggest having a Contracts/Agreements attorney draft up a couple of contracts for you that you can have your clients sign. That will serve you well in case of any issues. Best of luck.

Mr. Crosner is licensed to practice law in California and has been practicing law in California since 1978. The response herein is general legal and business analysis.. It is not intended nor construed to be "legal advice" but rather it is analysis, and different lawyers may analyze this matter differently, especially if there are additional facts not reflected in the question. Oftentimes the question does not include significant and important facts and timelines that, if known, could significantly change the reply and make it unsuitable. I am not your attorney until retained by a written retainer agreement signed by both of us. See also avvo.com terms and conditions item 9, incorporated as if it was reprinted here.

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