Nolo:
As of January 1, 2000, California joined the ranks of the many other states allowing people to form single-member LLCs. In fact, as of March 2003, every state in the nation allows single-member LLCs.Becoming an LLC grants you protection from personal liability for business debts and judgments. But you will still be taxed as a sole proprietor, so attach a Schedule C to your 1040.
You mentioned your other option was forming a corporation. For many small service businesses that are just starting out, LLCs are a better choice than corporations. LLCs provide the same limited liability as a corporation, but without a separate corporate tax and the three-tiered organizational structure of a corporation. In a one-person corporation, the owner has to don various hats at different times — that of shareholder, director, president and secretary. It is difficult enough not to look too affected when wearing a single hat — much less three.
Ted on September 27th, 2004 at 1:17 pm
If one has an LLC, does one have to pay the double up on Social Security payments as if one is an employee of a corporation?
R Speelmon on March 28th, 2006 at 2:41 pm
If one has a single member LLC, are bylaws necessary?
Llc incorporator on June 14th, 2006 at 6:04 am
Re Llc bylaws: Some jurisdictions require written operating agreements to be on file in the company record books, other jurisdictions allow only an oral agreement. Limited liability companies have operating agreements versus bylaws.