Ep. 11: Advice for Getting Started and LLCs and Business Structures

Hi there folks! Creatives Meet Business is an event and podcast series based out of Austin, Texas for creatives of ALL disciplines to get from zero to one in thinking of themselves as business owners (in the creative sector). This episode features Paul Glantz, an Austin-based CPA, who owns Launch Consulting, Inc. Launch Consulting, Inc. assists clients throughout the business process - from business consulting to entity selection to bookkeeping to tax preparation. In case you missed it, Paul was featured in the previous episode which answered questions like: What is a CPA and when do I need one, plus he strolled us through the World of Taxes and shared about deductions, estimated taxes and more. You see why we brought him back for business structures (like LLCs) and advice for getting started, right? 0:00 to 1:03 - Ashland Opening Remarks and Intro of Paul Glantz, CPA 1:04 to 4:10 - Advice for Getting Started Set up an entity Get an EIN (pretty much the social security number for your business) This is free to file! Takes about 10 minutes Open a bank account Keep a separate business bank account and credit card, keep it separated from personal. Keeping it separate helps for several reasons: 1) easier to keep track of your expenses and you'll know what's a business expense, 2) if you're ever audited, the IRS will ask for your bank statements. There'll be more scrutiny if funds are "commingled", aka if expenses are mixed between business and personal accounts. Partnership Agreements (if you have a business partner) Have a written agreement! Have a lawyer help you draft this! 4:11 to 4:52 - Ashland Interruption 4:53 to 6:39 - What is an LLC + Entity Selection An LLC is a Limited Liability Company. From a legal standpoint, this means your exposure is limited A sole proprietor / DBA has unlimited liability which means your assets are exposed Entities that provide some sort of limited liability / limits your exposure are: LLCs, Corporations, Limited Partnerships and Limited Liability Partnerships Which entity is right for you? Depends on your goals for growth, revenue and raising funds Your choice of entity affects your taxes, day to day operations, how you grow / scale 6:40 to 7:13 - Are There Benefits to Being a Sole Proprietor? The cost for starting is low, there's a filing fee for an assumed name certificate Reminder: On the legal side, you have unlimited liability and on the tax side you pay the self-employment tax 7:14 to 8:46 - Choosing a Business Entity Consider liability Consider your goals for growth and funding Breakdown of entity types 8:48 to 10:44 - Misconceptions about LLCs LLC is the most common type for small business LLCs are governed by state statute LLCs with one member as the sole owner (by default) is a separate entity for legal purposes but disregarded for federal taxes LLCs with two or more members (by default) is a partnership No LLC is a corporation or S corporation by default, you have to make an election to be taxed as such If you have an LLC and didn't make an election to treat it as anything other than its default treatment, there's no separate business tax return to file - it's reported on your individual income tax return 10:45 to 11:28 - Get Your Team Together Gather your lawyer, CPA and financial advisor - the three of them will help you make the best financial decisions possible 11:34 to 12:35 - Ashland Closing Remarks If you like what you hear, share the podcast with your friends, rate and review. To stay in the loop - follow us on Twitter, Facebook or subscribe to the newsletter. In the next several episodes, we'll be shifting directions into the world of websites and have some pros that we can't wait to introduce you to. Stay tuned! Thanks! Ashland, Creatives Meet Business