We have income from live performances and merchandise sales. Incoming money is deposited into separate bank account set up for band. I pay the members from this and plan to issue them 1099's. Annual income less than $20,000 Do I need to registe...
Do your performers agree that this is a sole proprietorship and do you have a written contract to that effect? Or do they possibly look at this as a partnership and they would make a claim in the future for the profits? Make sure the agreements are in writing. Also, consider that as a sole proprietor you will have individual responsibility / liability for anything related to the operation of the business. So the band is travelling to a gig and the driver runs a stop sign and kills someone - since the driver is on company business, the company is liable. Which means you are liable. Or a band member does a wrongful act while engaged by the band (jump into the crowd? sex with a fan (construed as rape)? etc. So consider whether you want to create an LLC or corporation to obtain limited liability protection. Also, consider getting insurance to cover potential liabilities. As to tax liabilities, contact an accountant and also consider potential employee vs independent contractor issues - check out the recent IRS guidance from last year.See question
I want to set up my LLC in Delaware for my startup. I am currently a sole founder with team members assisting me during the summer. In case I see that they are serious about the company and committed, I will ask them to join the team officially wi...
You are having physical activity in Illinois. You have bodies doing work here. That is enough for you to be required to be registered with the state. However, being a Delaware LLC makes sense for a number of other reasons possibly. Then you just register it here. Most good business attorneys will have a 10 page or more checklist to walk you through with regard to your multiple member LLC and will custom design your operating agreement to what is desired. Or you can go to Joe Schmoe and he (or Legal Zoom) will give you a generic multi member LLC operating agreement and ask you if you want any changes to it. That is essentially asking someone who doesn't know what they don't know to give a good opinion.
I suggest you make the wise decisions up front and don't try to fix it later. It usually costs more to fix later. Especially when you get in to the tax elections up front and if your LLC is taxed as an S-Corp., C-Corp or sole prop./partnership and you want to change later, there are a lot of implications to consider.See question
I am starting an online retail business (selling apparel online to many states in the US and a part international) with no physical store. The production factory (which will store the clothes for a few days between the time they finish production ...
You should register in Illinois in any event as you are doing business here. I usually recommend staying with the LLC as it only costs $150 more per year than a corporation (with a smaller amount of capital), but then you don't need to do annual minutes. Most small businesses fail to do the annual minutes and then open themselves up to a potential piercing the corporate veil claim. LLC's don't need to comply with corporate formalities of minutes in Illinois. Also, the LLC can choose to be taxed as an S-corp. or as a sole proprietor,,,,and the pros and cons of that are too long to discuss in an online forum such as this.See question
I had a corporation that I let get dissolved by the state about ten years ago because I didn't need it anymore. Now I would like to use it again. It looks like I could reinstate it, but there would be a lot of fees and forms. Can I just sign up a ...
Why use the same name as opposed to a different name? Think through that and if there isn't a good reason, consider going with something new to avoid any confusion.See question
C-Corp in Illinois
To form it, all you need to do is file Articles of Incorporation with the Secretary of State. Not sure why you would want a C-Corp though with its double taxation. After going over pros and cons of the various entities, most clients are going with LLC's these days - taxed as a sole prop/partnership or an S-corp. Very rarely going with a c-corp.See question
I am forming an LLC with my son to purchase a rental property and possibly more rental properties in the future. I will be contributing 100% of the capital but he will be running the business of the LLC and also he will be managing the properties....
Generally speaking you can gift as much as you want. You may need to file a gift tax return, but gift tax may not be owed. Talk to your tax advisor regarding this. Someone else mentioned a loan and that is certainly one way to go. You also need to consider what an adequate amount of capital would be to start the company to avoid a piercing the corporate veil claim. I generally suggest 3 months of operating expenses - note, it would not necessarily have to be the full $150,000. So you could potentially capitalize for $30k with you son and you each putting in $15k and the rest being a loan. Also, you could buy the whole thing and just gift ownership interests each year (may require valuations and discounting so that may be more complicated) until he owns 100% - and as someone else mentioned, if you are married, your spouse can also gift. Probably a number of other ways as well, but not going to spend more time thinking of them. You really should hire a lawyer to help with this. It's not just chump change you are dealing with and if you plan to deal with multiple properties, that requires additional planning as well. .See question
I own a Pennsylvania LLC Sole Proprietorship but I reside in Illinois. I do not sell goods only services.
If you are doing work only here and not in PA you will want to consider closing down the PA entity (and starting a new one) or merging it with an IL entity if it is expensive to keep it going in PA (e.g. your annual filing fee and registered agent fee, if any). Note be careful closing it down if you have contracts, retirement accounts, etc. that you want to have continue.See question
My daughter and I are starting a business in Illinois using "LLC".
An LLC (limited liability company) is not the same as a corporation which files Articles of Incorporation - it files Articles of Organization. However, based on your general lack of knowledge of this area, I suggest you hire a good business attorney for an hour to explain the differences between LLCs and corporations and the types of decisions you and your daughter will need to address. For instance is your LLC going to be taxed as a partnership, S-Corp,, or C-Corp and why? If one of you dies, what happens to that person's ownership? If one of you quits working in the business, will that person still get to collect 50% of the profits? Etc. Make sure you properly capitalize and operate the company.See question
I have been approached by a investor who wants to invest in me my brand and my business. This kind of came out if no where so I'm very unsure of my next steps with this prosess. Thank you in advance for any help you may provide!
First thing is to always get a Non-Disclosure Agreement in place. Even with that, be careful what you share as the person may decide to use the information anyway and then you have a lawsuit to pursue. Suggest getting an attorney involved to discuss pros and cons of equity and having an investor in the company. For instance, do you really need the money and what for? If not, then why give up equity. Then you need to determine how much control, if any you will be willing to give up. Good advice in some of the other postings as well. If this company will ever be worth anything (which presumably it may be or you wouldn't have a potential investor), don't be penny wise now and try to save on attorney fees. You will just regret it later if you gave away something you didn't realize you agreed to.See question
I'm president of corporate and I'm selling the business, so we thinking to just change the officer names of corporation take mine off put his on and that way he's not opening new corporation but just taking over. How do I take my name out of all t...
The simplest way to do a sale is a simple stock assignment/transfer. But there are a lot of legal and tax implications. The officer names have nothing to do with ownership. If this is truly a corporation, the Shareholder(s) own(s) it. The board of directors has overall operating responsibility and the officers run the day to day affairs. The new shareholder would elect a new board and officers. However, most buyers don't want to do a stock sale for liability and tax reasons.See question