Sole Proprietorship or LLC?

For those who have started an official tarot business in the United States: Did you opt for a sole proprietorship or an LLC? Which do you recommend? With the former, it seems like start-up costs and hassle are much lower, but the latter offers legal protections that separate you from your business in many cases where you might get sued.

I am not an attorney, but I think you should consult one. The law may vary from state to state.

Diana

FaintlyMacabre said:

I am not an attorney, but I think you should consult one. The law may vary from state to state.

Diana

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^This. Most family law attorneys can help you set up either. This is a situation where you NEED a lawyer.

You don't need a lawyer but it wouldn't hurt to consult one before getting some program like legal zoom. Like the other member stated, options to forming entities such as an LLC will be possible, depending on the state you are in.

Some attorneys give free consults, so you might want to call your local bar association office and see if they have a referral system. In California, state and local bar chapters offer referrals, which allow seekers to get free consultations with attorneys they refer you to.
Hipe that helps

Darkmage said:

^This. Most family law attorneys can help you set up either. This is a situation where you NEED a lawyer.

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You can file an LLC yourself. Don't waste money on a lawyer. Go online to the tax board of your state get the paperwork and fill it out or file online. It's that SIMPLE.

Depends on your state; check out the laws/consult with a lawyer and tax pro if you want to get real particular with an LLC. There might be minimum financial requirements to maintain an LLC (minimum capitalization/insurance) in order to keep your behind protected in the manner you're speaking of.

Personally, if you're just going to work for yourself, a sole proprietorship may be easier to handle with proper legal documents to protect you ('entertainment purposes', waiver of liability, etc.). There are different kinds of LLCs as well, and I have no idea what tarot reading might fall under -- it would probably largely depend on how your state classifies it. Tarot reading in particular is likely tricky business; I'd consult with a lawyer in your state just to be sure because it sounds like you want to go all the way. It also just depends on what your future business plans are.

I'd be interested in knowing if any tarot reading professional here is classified as an LLC specifically and under what conditions, because it seems like that would not be the obvious thing to do for pro tarot reading (to me).

alchemiholic said:

For those who have started an official tarot business in the United States: Did you opt for a sole proprietorship or an LLC? Which do you recommend? With the former, it seems like start-up costs and hassle are much lower, but the latter offers legal protections that separate you from your business in many cases where you might get sued.

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I've been reading since the 1970s. I've never been sued. Honestly, you can get too paranoid about these things.

This is strictly personal opinion, and should not in any way be construed as legal advice.

Please, please, talk to an attorney AND a certified tax adviser. Also see if there are any small business advisers in your area. One of my local universities has a small business development adviser to help local start-ups for a minimal fee.

I personally would strongly advise you to set up an LLC. For my state, the cost is roughly $150.

Why set up an LLC? If a client decides to sue you, they can only take assets that belong to the LLC. In the case of a tarot reading business (IF that's legal in your state, county, etc.) your business assets might include a computer, a reading table, a few decks, maybe a few crystals, etc. On the other hand, if you have a sole proprietorship and get sued, then ALL your assets can be seized -- everything you own -- from your house to your bed to your silverware.

Tax paperwork is a bit more tedious with an LLC, but in my opinion, it's worth it to have your personal assets protected.

Again, this is not legal advice and should not be construed as such.


Nisaba, I understand y'all Aussies are not as litigious as us Yanks. We have to be more careful.

nisaba said:

I've been reading since the 1970s. I've never been sued. Honestly, you can get too paranoid about these things.

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You don't live in the US. Where people sue for ANYTHING. I wouldn't worry in the UK or Canada - and even less in Australia - which seems exceptionally civilised - but if I lived in the US, I would.

ETA - see above - the edit EXACTLY !

Thank you for all the helpful advice! I have consulted a couple of legal/financial resources informally, and do have a pretty clear sense of what it would take to go forward, and of small business groups that could help me get things set up. I was curious about how other US professional readers handle this decision.

My thought is to start with a Sole Proprietorship and a slew of protective documentation during the pilot phase of my career, similar to what Amanda suggested. After a six- to twelve-month pilot period, I'll have a better idea of the amount of resources and time I'm able to devote, and will be able to make a firm decision on how far I'd like to go. If I decide to move forward, it seems like an LLC is definitely the reasonable choice, for reasons along the lines of what SarahJoy mentions.

Thanks again to all for sharing!