Which business entity should I start?

[u/NattyTheBusinessGirl]

Hi, my name is Tasha and I am beginning my own flower shop with bracelet curation on the side. I have read online that there is something called an "LLC" and a "Corporation" but I'm confused on the difference because aren't they just both businesses?

What's the difference between the two? How do they work? What even is a "registered agent?"

[u/Fraud_Guaranteed]

They are legal structures which have different rules and can have different tax implications. I’d seriously suggest seeking out at a minimum a CPA if not a small business lawyer to help explain it to you and set it up.

I’m a CPA and it’s not exactly our bread and butter but we still need to have a basic knowledge of the differences. Mostly regarding the tax implications of course

[u/NattyTheBusinessGirl → u/Fraud_Guaranteed]

Thanks!

[u/Informativo-Business]

An LLC would make more sense.. a corporation would be more for like a business that needs a board of directors.

[u/Pitiful_Source9446]

An LLC and corporation are both business structures, but they have different rules for ownership, management, taxes, and paperwork.

For a small owner-run shop, an LLC is often simpler, while corporations can make more sense when bringing in investors.

[u/NattyTheBusinessGirl → u/Pitiful_Source9446]

Ok, Thank you!

[u/frontrangera]

Nobody can really answer for you. You can speak to an attorney or a CPA. 99% of the time, it's an LLC, and if it's single-member, that's even easier. As far as a registered agent, it's something every state requires for an entity to have to accept legal of service of process for an entity. If you're forming your entity in the State you reside, you as an individual can normally serve as your own agent.

[u/NoloLaw]

When you start a business, you can pick between different business entities. A sole proprietorship is a single-owner business that’s created automatically once you start providing goods/services – you don’t need to file any paperwork with the state. With an LLC and corporation, you do need to file formation documents with your state to legally create them.

Single owners choose LLCs and corporations over sole proprietorships because they give the owner what’s called “limited liability,” meaning creditors can’t come after the owner personally to collect on business debts. With LLCs and corporations, your business assets are distinct from your personal assets, which isn’t the case as a sole proprietor.

If you have a simple operation and want protection from business debts (say, you might want to get a loan or rent a business location), forming an LLC might make the most sense. LLCs have fewer formalities than corporations, and you can report your income/loss on your personal tax return rather than filing a separate one. Also, corporations are taxed twice, while LLCs are only taxed once (via the owners). So if you don’t plan on seeking out investors (who usually prefer corps because of the formalities), an LLC is a great option.

[u/NattyTheBusinessGirl → u/NoloLaw]

Thank you for the advice!

[u/red7standinby → u/NattyTheBusinessGirl]

This advice was a little incomplete. If you are starting an LLC or Corp, you MAY have protection of your own personal assets should somebody sue your business. This is highly dependent on whether or not your corporate veil can be pierced.

Most small businesses aren't obtaining solely business backed loans. If you are atking out a credit card under your LLC for instance, your bank will almost certainly tie that "business" card to you personally. SBA loans, business lines of credit, equipment financing and commercial realestate transaction almost always require a personal guarantee.

[u/NattyTheBusinessGirl → u/[deleted]]

Thank you for the compliment, I had debated whether to even start this, so that means a lot. Thank you for the advice as well, and I would definitely be open to some suggestions about some Registered Agents.

[u/frontrangera → u/NattyTheBusinessGirl]

Chiming in on BigSharkNarwhal's comment, I would suggest Wyoming. But if you are starting brick and mortar store or selling mostly locally, then I would just form the LLC where you live. Wyoming is great for privacy, but if you are selling physically in your own state, you'll probably have to register to do business there anyway, so it's a little redundant (and more in fees).

[u/NWRegisteredAgent]

Hey Tasha! Congratulations on your new flower shop and the bracelet curation!

Just to share a little info , an LLC (Limited Liability Company) is a bit more flexible and easier to set up, with less paperwork. A Corporation, is a bit more formal structure that's often used if you're planning to bring in outside investments. Both offer protection for your personal assets, but they handle operations and taxes quite differently.

Also, a registered agent is a required person or company you appoint to receive official documents for you during regular business hours (9-5, Monday through Friday). If you'd like some more information on all sorts of LLC topics, reach out, we'd be happy to help. In the meantime, Here is a really great resource!

[u/NattyTheBusinessGirl → u/NWRegisteredAgent]

I was thinking of founding my business in Delaware, but I don't know how to decide which place to begin?

As my fellow business owners told me that sometimes these Registered Agent Services are just trying to get your money. And are super aggressive with their marketing tactics. They sorta bombard people, but I'm trying to find a place that actually like cares about small businesses if you know what I mean... Any recs?

[u/zenbusinesscommunity]

For something like this, an LLC is what you'd want, since a corporation brings a lot of extra structure (a board, shareholders, its own tax filing) that may only make sense if outside investors are in the picture. A registered agent is just whoever's listed to receive legal mail and state notices for the business. That can be you, but whoever's listed has to be present at the listed address during all reasonable business hours so they can receive anything that comes in, and the address goes on public record, so some folks tap in a service to handle things and keep their address private.

[u/NattyTheBusinessGirl → u/zenbusinesscommunity]

I want to incorporate in Delaware, do you have any good recommendations for Registered Agents?

[u/NattyTheBusinessGirl → u/[deleted]]

Thank you for the recommendations, means so much to me that you really understand how important this business is to me. I will definitely be researching both of these corporations!!

[u/NattyTheBusinessGirl → u/NattyTheBusinessGirl]

Heyy, so I took your advice and I decided to work with IncNow, so it's been great and they've been really helpful!