Kyle Wilson7
Member
14 messages
joined Apr 2007
I've been through the whole entrepreneurship grind—started out doing side hustles and odd jobs as a business student, moved up to being a sole proprietor, and eventually ran an LLC. Honestly? In my book, the LLC is the way to go. With a sole proprietorship, you’re basically putting your entire life savings on the line if things go south, but with an LLC, you have that shield. Plus, it’s way less of a headache—you aren't constantly at the mercy of some local tax official. One time, a clerk told me I had to report higher profits than what was actually in my books just to hit a 30% margin... totally insane. I also think being subject to corporate tax (LLC) is better than personal income tax (sole proprietor), even though you can opt for corporate tax as a sole proprietor—but then you lose those little perks, like being able to pull cash out without keeping a strict petty cash log. Regardless, I'm leaning towards the LLC.
1. You can bring machinery into the company as an initial capital contribution, which is a bit of a pain because you have to pay for an appraisal, but you can always just buy equipment later once you've made some money using a standard purchase agreement—kind of like buying a car. Taxes are a given, but they're usually lower than the corporate tax rate. I won't get too deep into the weeds here, so definitely check with your accountant.
2. Getting an EIN is easy regardless of whether you choose a sole proprietorship or an LLC.
3. Invoicing is straightforward for both, though there is one perk to being a sole proprietor: you only deal with sales tax once the invoice is actually paid. For an LLC, the obligation hits the moment you issue the invoice, whether you've seen a dime yet or not.
4. This part is simple, and honestly, the LLC wins here. You can register for wholesale, retail, or manufacturing without needing specific massive facilities or certain degrees. Basically, for production in an LLC, you buy parts, import them as raw materials, and set a standard—say, for a workbench, you need 5 screws, 1 base, and 4 saws. You open a work order from the warehouse, pull the parts needed, assemble it, and boom—you have a piece of Tigman darkness or whatever you call it. The work order tracks the production cost: raw materials + labor + utilities + overhead. (Again, ask your accountant for the specifics, or I could give you some actual consulting—but that'll cost you). Feel free to ask if you're stuck on anything.
And a piece of advice from my own mistakes: don't take on a partner unless you absolutely have to. My former partner still owes me $50,000 after I sold him my half of the company, so now I'm sitting here with no friends and no cash.
