Type of Business

[itsallaboute]

I am starting my own marketing consulting business an can operate as sole proprietor or just use my name. I have a second business that may incur some liablity some day but I also don't know how realistc it is that it wil get off the ground. Should I register the name and operate as LLC now or just wing it?

Thanks!!

[JLeezer]

That really depends on the potential for liability in the foreseeable future and you're inclination to take on the risk associated with the liability. Answer the following:

1) In terms of your current net worth or insurance coverage against liability of this type, how much liability could you face from any business transactions that occur before forming a LLC? (i.e. I have $10,000 in savings, but could potentially see liability of $15,000 - would equate to 150% liability compared to net worth)

2) Are you ok losing more than what you have invested in the LLC?

3) Are you thorough enough and disciplined enough to keep everything separate and distinct within the LLC (in other words, DO NOT MIX IN ANY PERSONAL STUFF) to keep a judge from piercing the corporate veil? If not, it doesn't really matter if you form it. A good judge will award what he deems appropriate and will stick it to you personally.

[itsallaboute]

Great way to put it in perspective. Can I register as an LLC and be the only partner for now and change later when and if I bring on a partner?

Also, for the other side business sole proprietorship, can I file multiple ficticious business names? What is they are different types of services and businesses?

Thanks so much.

[JLeezer]

Great way to put it in perspective. Can I register as an LLC and be the only partner for now and change later when and if I bring on a partner?

Most states do allow single-member LLCs (with LLCs, those who own it are called members; in LPs or LLPs, Limited Partnerships or Limited Liability Partnerships respectively, the owners are called partners), but there may still be a few that do not. You'll definitely want to check with your state for that. It is a very common question and I'm sure they'll have it in a FAQ section somewhere on their website.

Also, for the other side business sole proprietorship, can I file multiple ficticious business names? What is they are different types of services and businesses?

You should be able to file as many different fictitious names (also could be called assumed names or DBAs--doing business as), but again, check specifically with your state. Some states have requirements regarding making public notification of the fictitious name through trade or legal newspapers/magazines in the area.