License

I'm curious, what type of business license do you use? Sole proprietorship, LLC, what? And WHY? :)

We got our LLC.
The main reason was the legal protection it affords a business. If something were ever to happen only the assets of the business could be targeted and not us personally.
Also another benefit of the LLC is if we ever decided to open a line of credit or get a loan, everything would be based on the business and not our own personal credit and debt.

Your best bet is to find a good Accountant if you already don't have one and sit down with them and talk about your situation and future plans.

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Originally Posted by C&H Exotic Morphs

We got our LLC.
The main reason was the legal protection it affords a business. If something were ever to happen only the assets of the business could be targeted and not us personally.
Also another benefit of the LLC is if we ever decided to open a line of credit or get a loan, everything would be based on the business and not our own personal credit and debt.

Your best bet is to find a good Accountant if you already don't have one and sit down with them and talk about your situation and future plans.

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Interesting! I have a proprietorship, and now I think I will look into the LLC. I wonder what's involved in getting things switched over? Hmmm....

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Originally Posted by C&H Exotic Morphs

Also another benefit of the LLC is if we ever decided to open a line of credit or get a loan, everything would be based on the business and not our own personal credit and debt.

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While this is a great idea in theory, I assure you, it will never happen in practice (if we're talking bank loans). Any bank will require the owners of a closely held business to guaranty the debt. Your personal credit and income would play a huge part in a loan decision, and you would be personally responsible for any loan.

To the OP - you might know this already, but none of these are business licenses, they are forms of a business. Starting an LLC does not give you license to operate within your municipality.

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Originally Posted by swansonbb

While this is a great idea in theory, I assure you, it will never happen in practice (if we're talking bank loans). Any bank will require the owners of a closely held business to guaranty the debt. Your personal credit and income would play a huge part in a loan decision, and you would be personally responsible for any loan.

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What you are saying is correct if you are talking about a new/start up business. However over time a business will build its own credit history and score.
Also it is fairly easy to open lines of credit with suppliers if you are willing to work with them and prove yourself to them.

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Originally Posted by C&H Exotic Morphs

What you are saying is correct if you are talking about a new/start up business. However over time a business will build its own credit history and score.

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Sort of. But for a small, closely held company, a bank will still require owner guarantees. Plus, consider the type of credit. In this industry, you really have no acceptable collateral for a bank (they won't take a lien on reptiles, because they won't want to feed them if it comes to it, nor do they really understand their worth). Even an SBA guaranty will require owners to have skin in the game. Not trying to be difficult, but this is what I do for a living.

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Originally Posted by C&H Exotic Morphs

Also it is fairly easy to open lines of credit with suppliers if you are willing to work with them and prove yourself to them.

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True. Getting credit with suppliers is easier than credit with banks. Suppliers will typically require payment within 30 days.

Thank you for all of your inputs. I was thinking of LLC because I like the protection it provides BUT I am trying to figure out if it is necessary? If I run a high risk business with the potential of being sued then yes, I think getting the LLC is worth it. Does anybody ever experienced being sued from running a reptile business?

The thing I know that's nice about the proprietorship is taxes. It's very easy to do taxes for my business. In fact, I just use turbo tax and do my business and personal taxes at the same time. Very uncomplicated. I know there is more involved with a LLC, just don't know the particulars. :)