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To start a LLC or no?
I was wondering at what point you should start thinking about making a name for an LLC? I currently have 7 BP's which isn't alot and I am not in it for profit more because I enjoy them so much and want to make the morphs I can't afford to buy. I plan to have a possibility of 3 clutches this year depending on how pairings go. Currently all the money is coming out of pocket and I started thinking maybe I should be creating a LLC to claim it. This year alone since it's when I am getting everything going I will probably have spent 3-4k or more. When I start adding the Herpstat2 I just ordered, the incubator I plan to order later this month and the Herpstat1 I will need for it, heat tapes and materials to build racks, feeders, new morphs I already bought and ones I still plan to buy I figured this might be the time to start the business. Now if I need larger loss to even claim then I am no rush and can start next year when I may be selling if breeding goes well. I am looking for differant opinions on what others think.
1.0 Bumblebee (Sheldon)
1.0 Enchi (Jaxon)
1.0 Phantom (Leonard)
1.1 Pastel Het Genetic Stripe(Clyde+Bonnie)
0.1 LemonBlast (Dottie)
0.1 Cinnamon (Cindy)
0.1 Pied (Pissy)
0.1 Phantom (Priya)
0.1 Butter (Bernadette)
0.1 Lesser (Penny)
0.1 Pastel (Ivy)
0.1 Normal (Amy)
1.0 Boxer (Rocky)
1.0 Sugarglider (Oreo)
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Re: To start a LLC or no?
I am not an attorney or a CPA. I do run a non-herp business as a 51% member of an LLC (my husband controls the other 49%) so I do have experience with one.
First, the LLC is its own entity and its purpose is primarily to shield members from personal liability in case of a lawsuit, though this doesn't always work, especially in a single-member LLC; google "piercing the corporate veil" for more info. So, suppose a few years down the road you ship out a snake with some funky drug-resistant RI, the buyer doesn't QT properly and decides to sue you not only for the vet bills but the value of any of his animals that died - in theory your LLC would be sued, not you.
Second, there are some administrative tasks and expenses that you will have to do each year. The LLC will need an operating agreement, registration with the state, etc. Your state's Secretary of State web site should explain everything you need to file, along with a fee schedule for both the initial and annual filings. An attorney drafted ours and it was worth every penny to have him do it.
Third, the time to form an LLC is before you spend money on business-related expenses. You said you really don't intend to make a profit, which pretty much negates any reason to create an LLC and deal with the associated overhead, expenses, tax returns, bank accounts, etc. The IRS won't let you run losses year after year after year... eventually they likely will be limited to your income from the activity.
Fourth, an LLC can elect how it wants to be taxed, whether as a corporation, partnership, or sole proprietor (if it's a single-member LLC). The choice should be discussed with a CPA or tax attorney to see which method creates the least tax burden for you. Also see if there's a minimum income or franchise tax you pay to the state each year; in WV it's $50 even if we post a net loss, and the business also has to file and pay additional taxes with my county, about $100 year on average. I imagine in NJ those taxes will be higher because... well, it's NJ.
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The Following User Says Thank You to bcr229 For This Useful Post:
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Thanks much for all the input. Now I have a direction to go and more stuff to read up on. Would you happen to know or does anyone know if an LLC is the only way to claim rights to a name? Or can that be done by simply putting a copyright on it. By this I mean if I wanted to make a FB page or website with the name BPluvr's Snakes for example.
1.0 Bumblebee (Sheldon)
1.0 Enchi (Jaxon)
1.0 Phantom (Leonard)
1.1 Pastel Het Genetic Stripe(Clyde+Bonnie)
0.1 LemonBlast (Dottie)
0.1 Cinnamon (Cindy)
0.1 Pied (Pissy)
0.1 Phantom (Priya)
0.1 Butter (Bernadette)
0.1 Lesser (Penny)
0.1 Pastel (Ivy)
0.1 Normal (Amy)
1.0 Boxer (Rocky)
1.0 Sugarglider (Oreo)
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To start a LLC or no?
Just something to maybe look into. I was talking to my Dad the other day about just this thing. More about not claiming any earnings from offspring and calling it a hobby. His friend keeps lamas and the way it works is if he is keeping them it's a hobby, if he breeds them its a business as seen by the state. I have to look into it more for reptiles considering the rules are usually different however thought it might be an interesting point to bring up.
Also some states require a permit to sell exotics. Just something to look into if you haven't already
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The Following User Says Thank You to M&H For This Useful Post:
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Re: To start a LLC or no?
Names are trademarked, photos and artistic works are copyrighted, ideas and inventions are patented. Some light reading: http://www.uspto.gov/
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The Following User Says Thank You to bcr229 For This Useful Post:
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BPnet Veteran
You also need permits to keep let alone breed reptiles in the state of NJ.
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The Following User Says Thank You to meeistom For This Useful Post:
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Re: To start a LLC or no?
Originally Posted by meeistom
You also need permits to keep let alone breed reptiles in the state of NJ.
This I am aware of and will be filing for all permits later this month.
1.0 Bumblebee (Sheldon)
1.0 Enchi (Jaxon)
1.0 Phantom (Leonard)
1.1 Pastel Het Genetic Stripe(Clyde+Bonnie)
0.1 LemonBlast (Dottie)
0.1 Cinnamon (Cindy)
0.1 Pied (Pissy)
0.1 Phantom (Priya)
0.1 Butter (Bernadette)
0.1 Lesser (Penny)
0.1 Pastel (Ivy)
0.1 Normal (Amy)
1.0 Boxer (Rocky)
1.0 Sugarglider (Oreo)
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Re: To start a LLC or no?
Originally Posted by bcr229
Names are trademarked, photos and artistic works are copyrighted, ideas and inventions are patented. Some light reading: http://www.uspto.gov/
Thanks so much. I am building a 9 x 41qt. tub rack today so I'll read up on this more after.
1.0 Bumblebee (Sheldon)
1.0 Enchi (Jaxon)
1.0 Phantom (Leonard)
1.1 Pastel Het Genetic Stripe(Clyde+Bonnie)
0.1 LemonBlast (Dottie)
0.1 Cinnamon (Cindy)
0.1 Pied (Pissy)
0.1 Phantom (Priya)
0.1 Butter (Bernadette)
0.1 Lesser (Penny)
0.1 Pastel (Ivy)
0.1 Normal (Amy)
1.0 Boxer (Rocky)
1.0 Sugarglider (Oreo)
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