# What is the right type of business to register as?



## Looker4 (Aug 9, 2007)

Hi! I am planning on starting a new t-shirt/clothing company. I plan to start small and see where it goes. Should I register my brand/company name in my state? And if so, what is the best business type to register as, considering I plan to start out small?


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## Leatherneck (Jan 18, 2008)

Looker4 said:


> Hi! I am planning on starting a new t-shirt/clothing company. I plan to start small and see where it goes. Should I register my brand/company name in my state? And if so, what is the best business type to register as, considering I plan to start out small?


Hi Jus here is a link that may answer some of those questions for you when you see how long it is I'm sure you will understand why I chose to give you the link instead of retype LOL  http://www.t-shirtforums.com/t-shirt-articles/t17054.html


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## Looker4 (Aug 9, 2007)

Thanks. This was helpful but Im still torn between LLC or Sole Prop. Is there anyone who was in a similar position that could help me out. Thanks.


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## fdsales (Jul 1, 2007)

A LLC (limited liability corp.) means that your business is a LLC based on the rules of incorporation in your state, and that your business stands alone, and you are a stockholder (you can have more than 1 stockholder). Basically, a LLC offers a "buffer" between YOU personally, and your company, in the event of any lawsuit, or other legal action that would create legal liability for your company.
Let's say, for example, customer comes into your shop, falls, and really hurts themselves. First, your main liability insurance co. would step in (you need insurance), then if the customer chooses to sue for 1 million dollars, and they win, basically they can take all the LLC owns, but it pretty much stops there. You personally, as a stockholder, are generally protected.
If you are sole prop. then YOU, YOURSELF, and all YOUR personal assets, stand in place of the company, and everything YOU own, including any future income from any source, stand at risk for a business failure, lawsuit, etc.
Also, since a LLC operates own it's own, it's taxed for income on it's own. If you are a sole prop., then the income tax gets messy, as it passes on to you personally, which you put you in a higher tax bracket, depending on other income you have.
First, consult a business attorney to fully know & understand the rules for a LLC in your state, and also your tax advisor, to know & understand the tax advantages (or disavantages) a LLC may have for you. Personally, after 23 years in this biz, I would NEVER go as a sole prop., either a LLC, or regular corporation.


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## Buechee (Dec 22, 2005)

I would say LLC. I don't see where we would need to incorp. for tees. But if you know you will be growing to over say 100 workers, then I might set up as a Corp.


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## guest29928 (Mar 30, 2008)

Limited Liability Company, this is not the same as a corporation, but its close. If you are going to be small, work by yourself or with partners, an LLC is your best bet. A C or S corp requires a lot of paper work to maintain. You have to keep minutes and meetings etc.

If you do a single entity LLC, you will send in federal taxes once a year with your personal tax. You will file a schedule C along with your 1040.

The state tax is different and you will go to you state dept of revenue and find out about sales tax or use tax.

Also, if you are worried about liability then you need to consult a corporate laywer. There are things that you need to do in order to keep the LLC protection and keep you from being sued personally. 

Most people think that a corporation or LLC will protect them, but rarely unless you are a C corp and a public or large company will you be protected. There are so many way to pierce the corporate veil. 

Unless you will have your own shop, I dont think you are at a high risk at being sued.

Also with an LLC or Corp, you can build corporate credit that you dont need to use your social sec number for. Things like office supply stores and getting credit terms with your vendors etc. But it wont help with actual major business credit cards or business loans, for those you have to use your ss# no matter what and goes off your consumer credit report.

so whatever state you are in, go to google and type in your state and "sos" or your state and "corporation commission", this will let you download the paper work to file the LLC. Its usually pretty cheap, under $100, depending on where you live and is very easy. Fill it out and usually no ID required, just pay with check.

I would also suggest the LLC for you and also suggest talk to a lawyer to make sure you understand everything you need to understand.

good luck and let us know what you decide to do.


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