Pixtus - Photography Forum, Photographers, Photo Tips

boliver · **sole proprietor vs. limited liability -** 05-02-2008, 02:58 PM

can someone explain the pros and cons of starting a business as a sole proprietor vs. limited liability. i know this is a loaded question. i've read a few websites and asked a couple of cpa friends but get mixed information about which is better from everyone.

thanks!

bigjon0107 · 05-02-2008, 04:57 PM

Limited Liability what? Partnership? Corporation? The largest advantage is that if something should happen to the business, they cannot take your personal assets with a LLC or LLP. They can only take what you have invested in the business. That is what i know without going into to much detail and giving me a better chance of me being wrong

. There are a few others on here who know much better than I (Coby). The biggest piece of advice you will get though is to go see a CPA to get accurate information and something customized to your needs.

brad · 05-02-2008, 05:18 PM

Not really true... depending on the situation, it is possible to go after personal assets if you have an LLP, LLC, Class S, or even a full Class C Corp... you really need a legal expert on these kinds of entities to give you proper advice... don't just depend on others who have been in these kinds of business. Their advice is valuable, but won't serve you if things go south.

Do searches on terms like "piercing the veil" for more info on what I'm talking about.

L Stegall · 05-02-2008, 05:29 PM

There are tax ramifications to the various entities, as well as a difference in exposure. However, in Texas, a lot of personal assets are exempt from judgments, so people aren't really going to get your house if you get sued. Bottom line, it will really depend on your particular circumstances as to what type of business entity works for you. A good small business attorney can give you the advice you need.

bondarnes · 05-02-2008, 10:02 PM

Every situation is different, therefore you should be asking this question of someone able to give you proper legal advice. I don't ask my attorney for photography advice.

brad · 05-02-2008, 10:13 PM

Quote:

Originally Posted by bondarnes

I don't ask my attorney for photography advice.

Excellent advice.

dbphotos · 05-02-2008, 10:29 PM

Yes, you need legal advice. I run everything through an LLC, but that works for my situation. If you don't have much in the way of assets you may be just fine as a sole proprietor, but I'd spend some $$ and ask an attorney.