Question by Cupcake: What business entity should I file under?
I’m going to own my own online retail business.
As of now, it will solely be online.
I have been thinking about sole proprietorship, but know that I have unlimited liability.
If it makes a difference, it is possible for me to began a partnership (having a family member act as a silent member).
LLC sounds great to me, but I haven’t found enough information to make up my mind.
Answer by Vic J
Sounds like you will start with Sole Proprietorship since you will be reporting your business income on your SSN. You could get a TIN later.
Most courts don’t recognize a sole member (one person) LLC as a true corporation, and will treat it as a Sole Proprietor.
As you grow bigger, and want to bring a partner in (always a BAD idea), you can form an LLC. The second member in an LLC would need to control at minimum 20% of the business.
As Sole Proprietor you won’t need to spend money on the LLC fees.
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