Starting an LLC: Where to begin?

When people talk about "starting a company," they usually assume you’re stepping into the role of CEO or board member—which isn't actually required. You can just be the owner and hire someone else to run the show.
If you decide to act as the director without being on a different payroll setup, federal law dictates you have to cover those specific payroll taxes. For instance, you could set up an employment contract at minimum wage ($938 gross). In that scenario, your employer-side taxes would hit about 15.2%, plus the standard 20% withheld from your paycheck. Your actual income tax will fluctuate depending on whatever deductions or credits you qualify for based on where you live.
And that's assuming full-time status!!!

Hey there,

I’ve been scrolling through these forums for a while now, but it’s finally hitting me just how much I don't know, so I’m reaching out to anyone willing to lend a hand.
Here’s the situation: my wife works full-time as an esthetician for a local spa, and we’re looking into the possibility of her starting her own LLC to take on private clients at home on the side. My understanding is that she could technically be the owner of her own business, and if she does that, she wouldn't necessarily have to worry about double-paying certain payroll taxes since they're already being covered by her main employer. But since she'd be working for herself, I'm a bit lost on the mechanics—how would she actually pay herself a draw or a salary while still drawing a regular paycheck from her day job?
Also, there's the "what if" factor. If her current employer were to let her go—God forbid—would she lose all access to unemployment benefits because she's technically a business owner? And would she then be stuck footing the entire bill for her company's taxes and overhead all on her own? Please set me straight if I've got this wrong.

Thanks,

Best,

Richard Jones12 said:Hey everyone.
I’m looking at getting a little side hustle off the ground.
So, here’s the deal: I’m torn between starting a brand-new LLC from scratch or just buying up an existing small business that’s been sitting dormant for a few years—one that doesn't have any outstanding debts or legal headaches hanging over it.

Which route do you think makes it easier to land a loan? I’m looking for some seed money in the ballpark of 100 $0.00, which, let's be real, I don't have sitting in my savings right now.
Obviously, I’d hit up the bank with a solid business plan and all the necessary paperwork.
My big question is: in this current economy, do banks even bother helping out small entrepreneurs who don't have a massive track record of revenue yet?

Thanks for listening.

To put it bluntly: forget about it. A company with zero turnover and only $6667 in capital isn't going to cut it. Even if that company had been around for a hundred years, no bank in the US is going to give you a loan based on that.
Honestly, nobody working at the local banks around here has ever actually heard of a "business plan" being enough to prove your seriousness or act as a guarantee for success. Your best bet—and really your *only* realistic option—would be to take out a personal loan for $33333 if you're currently employed, or maybe just borrow from family.

Jesse Vaughn65 said:Hey there,

I’ve been scrolling through these forums for a while now, but it’s finally hitting me just how much I don't know, so I’m reaching out to anyone willing to lend a hand.
Here’s the situation: my wife works full-time as an esthetician for a local spa, and we’re looking into the possibility of her starting her own LLC to take on private clients at home on the side. My understanding is that she could technically be the owner of her own business, and if she does that, she wouldn't necessarily have to worry about double-paying certain payroll taxes since they're already being covered by her main employer. But since she'd be working for herself, I'm a bit lost on the mechanics—how would she actually pay herself a draw or a salary while still drawing a regular paycheck from her day job?
Also, there's the "what if" factor. If her current employer were to let her go—God forbid—would she lose all access to unemployment benefits because she's technically a business owner? And would she then be stuck footing the entire bill for her company's taxes and overhead all on her own? Please set me straight if I've got this wrong.

Thanks,

Best,

Your wife can certainly start her own company; she doesn't need to be registered as an employee of her own LLC since her primary employer is already covering her social security and tax withholdings, so she's free to work.
As for getting paid, if the work is just occasional, she could potentially pay herself through contract work, though most people simply distribute the profits the business makes during the year. You can also issue yourself quarterly profit distributions throughout the year...

If she does lose her job at the salon, she won't be eligible for unemployment benefits, and she'd essentially have to register herself as an employee within her own company to handle things.

ruggedcyclist74 said:Your wife can certainly start her own company; she doesn't need to be registered as an employee of her own LLC since her primary employer is already covering her social security and tax withholdings, so she's free to work.
As for getting paid, if the work is just occasional, she could potentially pay herself through contract work, though most people simply distribute the profits the business makes during the year. You can also issue yourself quarterly profit distributions throughout the year...

If she does lose her job at the salon, she won't be eligible for unemployment benefits, and she'd essentially have to register herself as an employee within her own company to handle things.

It simply cannot be done off the books. That’s just straight-up illegal labor. You either need to hire them properly or set up some sort of formal contract.

Kate Robinson5 said:It simply cannot be done off the books. That’s just straight-up illegal labor. You either need to hire them properly or set up some sort of formal contract.

In a perfect world, you'd be absolutely right, but when you see how many businesses out there are running with zero official employees and facing zero pushback from the authorities, a much different picture starts to emerge...

I haven't exactly heard of an inspector ever coming after a business owner just for working in their own shop without being on the official payroll...

It seems more likely that they might actually raise an eyebrow only if the company doesn't have a single other employee on record...

Well, at least that's what my experience has shown me.

ruggedcyclist74 said:Your wife can certainly start her own company; she doesn't need to be registered as an employee of her own LLC since her primary employer is already covering her social security and tax withholdings, so she's free to work.
As for getting paid, if the work is just occasional, she could potentially pay herself through contract work, though most people simply distribute the profits the business makes during the year. You can also issue yourself quarterly profit distributions throughout the year...

If she does lose her job at the salon, she won't be eligible for unemployment benefits, and she'd essentially have to register herself as an employee within her own company to handle things.

I appreciate the insight, ruggedcyclist74. What’s the setup look like if I’m the one holding the ownership? In this scenario, we both have full-time jobs elsewhere, so we’d both be working for other companies while I act as the owner of this venture, which wouldn't have any other employees. Since I'm not in her field (she's a cosmetologist 🙂), she could work under my entity, and I could pay her through contract work when things pick up. Or, theoretically, she could volunteer her time initially, and then I'd just distribute the profits later on. Essentially, we just need a way to operate legally on a part-time basis while we build up the brand and test the waters. If it takes off, great; if not, we haven't lost much. We want to keep overhead low and stay completely off the radar of the IRS.

Thanks

Best,

Raymond Martinez10 said:When people talk about "starting a company," they usually assume you’re stepping into the role of CEO or board member—which isn't actually required. You can just be the owner and hire someone else to run the show.
If you decide to act as the director without being on a different payroll setup, federal law dictates you have to cover those specific payroll taxes. For instance, you could set up an employment contract at minimum wage ($938 gross). In that scenario, your employer-side taxes would hit about 15.2%, plus the standard 20% withheld from your paycheck. Your actual income tax will fluctuate depending on whatever deductions or credits you qualify for based on where you live.
And that's assuming full-time status!!!

Got it, thanks!

I'm also wondering how this works for someone who's already retired. Can a retiree just start a business without having to hire anyone?

🙂

Hello there.

I’m new to this discussion, and I’m looking for some specific clarity on a situation. Is there any possible way for a full-time student to register an LLC without losing their full-time student status? I mean, truly—is there any loophole or workaround? A friend mentioned that if you opt out of the health insurance provided by the university, no one would ever notice you have a business. This is a massive dilemma for me because I’m stuck. I work in the beauty industry, and right now we operate under a small sole proprietorship registered to my mother, though I handle the vast majority of the actual workload. We’re planning to move into a new location and open a dedicated cosmetics salon, and I’m torn on whether we should stick with the current setup. If everything stays in my mother's name, my ability to operate is extremely limited; technically, I shouldn't even be working there unless I'm just acting as an assistant. Long-term, I know forming an LLC is the smartest move, which is why I’m asking. I wouldn't mind switching to part-time status if it weren't for the fact that my father passed away this month; I've applied for survivor benefits, and I absolutely cannot afford to lose that support while trying to grow the business. If anyone has any insight, I’d really appreciate the advice. I’ve heard whispers of people managing to run their own companies while maintaining full-time student standing. Thanks.

Jesse Vaughn65 said:I appreciate the insight, ruggedcyclist74. What’s the setup look like if I’m the one holding the ownership? In this scenario, we both have full-time jobs elsewhere, so we’d both be working for other companies while I act as the owner of this venture, which wouldn't have any other employees. Since I'm not in her field (she's a cosmetologist 🙂), she could work under my entity, and I could pay her through contract work when things pick up. Or, theoretically, she could volunteer her time initially, and then I'd just distribute the profits later on. Essentially, we just need a way to operate legally on a part-time basis while we build up the brand and test the waters. If it takes off, great; if not, we haven't lost much. We want to keep overhead low and stay completely off the radar of the IRS.

Thanks

Best,

Even with volunteers, you're still on the hook for payroll taxes and contributions, so that route isn't really worth the headache.

Personally, I think it makes more sense for her to set up her own LLC once she's licensed, and then...
She can occasionally draw a fee via an independent contractor agreement when she has the capacity. Since she'd be the owner, she can't exactly claim she's being exploited by an employer, and since she's launching a startup that likely won't see a profit right away due to overhead, there's a perfectly logical excuse for why she isn't taking a regular salary.
At any rate, if an inspector ever does show up, you'll always have that paper trail to fall back on...

In practice, she should probably issue an independent contractor agreement for every single esthetic service provided...

Anyway, I hope that helps clear things up...

Anyone got any fresh intel on when we might actually see the simple LLC setup become a thing? And does anyone here have a clue what the shutdown process looks like for one of those? Like, what kind of damage are we talking about in terms of costs?

Hey there!
I have a bit of an unusual question for you all. Is it theoretically possible to set up a single LLC that covers absolutely everything? I mean, could I just register for every possible business activity right from the start? I realize some industries naturally conflict with one another, so obviously, you can't register for *everything*, but is it feasible to list, say, 50 different business activities under one roof? Also, does the filing fee apply $50 per activity? I’ve heard whispers that adding each extra category comes with its own $50 charge. On another note, is it legally possible for a company to have zero official employees while still having, say, 50 volunteers on board? How would the IRS or standard accounting practices view that? Would I need to be signing specific contracts or waivers with them to stay compliant...
Specifically, I'm trying to estimate the monthly overhead for running an LLC where there is only one employee (who also serves as the CEO) earning minimum wage. Basically, I'd be paying roughly $600 in payroll taxes and healthcare contributions, plus my U.S. Chamber of Commerce dues, an accountant, bank fees, and various other miscellaneous costs. If the company isn't generating any revenue yet, what kind of total monthly burn rate am I looking at?

Grace Thomas7 said:Hey there!
I have a bit of an unusual question for you all. Is it theoretically possible to set up a single LLC that covers absolutely everything? I mean, could I just register for every possible business activity right from the start? I realize some industries naturally conflict with one another, so obviously, you can't register for *everything*, but is it feasible to list, say, 50 different business activities under one roof? Also, does the filing fee apply $50 per activity? I’ve heard whispers that adding each extra category comes with its own $50 charge. On another note, is it legally possible for a company to have zero official employees while still having, say, 50 volunteers on board? How would the IRS or standard accounting practices view that? Would I need to be signing specific contracts or waivers with them to stay compliant...
Specifically, I'm trying to estimate the monthly overhead for running an LLC where there is only one employee (who also serves as the CEO) earning minimum wage. Basically, I'd be paying roughly $600 in payroll taxes and healthcare contributions, plus my U.S. Chamber of Commerce dues, an accountant, bank fees, and various other miscellaneous costs. If the company isn't generating any revenue yet, what kind of total monthly burn rate am I looking at?

It's doable. The cost is the same whether you list one activity or fifty.

velvethawk68 said:Got it, thanks!

I'm also wondering how this works for someone who's already retired. Can a retiree just start a business without having to hire anyone?

🙂

Does anyone happen to have an answer for this?

🙂

velvethawk68 said:Does anyone happen to have an answer for this?

🙂

Let’s look at the logic here... If a retiree starts a company and doesn't hire anyone, who's doing the actual work? Him? He’s retired because he’s done with the grind. Makes sense, right? 🙂

Technically speaking, a retiree can start a business, and if they aren't pulling a significant income from it, they should be able to keep their Social Security checks coming.

It’s a gray area, so there isn't a simple "yes" or "no" answer.

Retirement isn't one-size-fits-all. You could be retired due to age, disability, or some other reason. Everyone falls under different legal categories with specific rules you have to follow.

Honestly, it would be smart to just run this by a legal expert or someone at the Social Security Administration.

velvethawk68 said:Got it, thanks!

I'm also wondering how this works for someone who's already retired. Can a retiree just start a business without having to hire anyone?

🙂

Look, be a bit more specific with your question—anyone can start a business regardless of their employment status or if they're retired.

Most of the time, your pension gets cut if you go out and start your own business—it’s a headache. Like Henry Edwards33 mentioned, there are a ton of specific rules to navigate, so you really ought to look into them first.

Grace Turner said:It's doable. The cost is the same whether you list one activity or fifty.

Awesome! Thanks🙂

Are there any specific rules if a minor wants to start their own LLC?

In theory, you can register for pretty much any line of business you want, but let’s be real—it isn't always that straightforward! Some industries require specific permits, mountains of paperwork, and endless legal procedures. Like, imagine trying to register for something like manufacturing firearms or heavy chemicals? You'd hit a wall immediately! Plus, all those extra licenses and certifications come with a hefty price tag, which is just an added expense you might not want right now.
The good news is that about 90 percent of businesses don't need those kinds of special permissions. For those, it won't cost you a dime extra to include them all in your list of activities.