Should I file as a sole proprieter or something else

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Should I file as a sole proprieter or something else

I want to start a t-shirt/apparel brand
that I opperate from home along with a
website page. Should I file as a sole
proprieter in the state of Maryland or
another business type?

Asked on February 27, 2018 under Business Law, Maryland

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

Form an LLC (limited liability company). An LLC will, as the term implies ("limited liability") protect your personal assets (e.g. home; money in the bank) from most business-related liability or obligations, such as if you fail to pay a supplier, breach a contract, infringe on someone's intellectual property (e.g. trademark or copyright), etc., the same way a corporation does. (If you are a sole proprietor, by contrast, your personal assets are at risk from business debts or liabilty.) However, it involves less paperwork and formalities than a corporation--i.e. it is simpler. It does *not* involve "double taxation"--profits and losses drop directly to your own tax return, and are taxed with any other income you have; however, under the new Trump tax plan, you may be entitled to a significant deducation due to having an LLC (check with your tax provider).


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