Author Topic: Form LLC For Various Side Projects?  (Read 2096 times)

jfLip

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Form LLC For Various Side Projects?
« on: April 03, 2014, 04:05:16 PM »
Would it be a good idea to form an LLC for tackling various [small] income generating side projects?  For example, I've previously earned a little income through Amazon's affiliate program, and I'd like to launch a couple of apps and an unrelated website soon.  Would there be a benefit to having all projects under one LLC besides protecting personal assets?  Bear with me if it's a silly question, it's been a long day and I don't understand taxes/tax avoidance much.

Edit: I live in VA.

« Last Edit: April 03, 2014, 05:43:43 PM by jfLip »

Thegoblinchief

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Re: Form LLC For Various Side Projects?
« Reply #1 on: April 03, 2014, 04:16:58 PM »
For web stuff, no.

I have an LLC for my side job, but it's property management, so I am on other's property, using tools, etc. I also preferred having a business entity owning the insurance policy for that work.

And LLCs in my state are cheap to file.

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Re: Form LLC For Various Side Projects?
« Reply #2 on: April 03, 2014, 04:24:00 PM »
Even though it is cheap to form/file, in CA there is a minimum yearly tax of $800 for every LLC.  If you have substantial assets, or have a risky business, perhaps $800 is worth the limited liability.

nawhite

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Re: Form LLC For Various Side Projects?
« Reply #3 on: April 03, 2014, 04:27:55 PM »
In Colorado you can create and file an LLC for $1 (or at least you could last year). You do have to file taxes every year but there isn't a penalty for existing. That being said, the benefits only help you if you are extremely vigilant about finances. Separate bank accounts, never touch the earnings for non business related spending unless you explicitly declare (and keep records of) a dividend or a salary.

Most states judicial branches have allowed people suing an LLC to get the owner's personal assets when the owner wasn't vigilant about their accounting saying that it really was a Sole Proprietorship pretending to be an LLC.

That being said, if you are good with your accounting, then having an LLC does protect you personally if sued (which is more or less likely depending on what your apps/sites do). If you are really fancy and really good at accounting and make a decent amount with these side businesses you can do fun things with a 401k matching from a side business. That's one of the best benefits for self employed mustachians.

Note: I'm not a Lawyer and that wasn't legal advice.