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Do I need to file for LLC right now?

The only reason I think I may have to is to secure the company name I want, so that Number 1 I have it, and number 2, so nobody else can take it.

I hope that makes sense... other than that reason, as of right now I don't see any other reason to; except I am accruing expenses ordering sample products and sample packaging, because I am trying to find exactly what I am going to stock... so those expenses could be tax write offs if I already have the LLC correct?

Dheer
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diana chesser
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  • Probably now but can you clarify: is launch just weeks or months away or is this more of a years away situation? – C8H10N4O2 May 26 '20 at 16:42

1 Answers1

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Form the LLC now.

  1. It’s much easier to set up the vendor logins, registrations, accounts, etc once as the business than it is to change a myriad of 3rd party systems’ records while you’re relying on them to operate.

  2. LLCs are (almost always) taxed on a pass-through basis to their members’ tax returns so order of operations only makes a big difference on taxes if there will be multiple members sharing ownership (and therefore tax obligation) unequally e.g. as an S corp. In the United States the business expense is deductible on a federal basis (limitations apply, I’m sure) as a “sole proprietorship” or “partnership” depending on whether the business has other members, regardless of whether you are incorporated as an LLC.

  3. You must maintain a “veil” between your personal and business activity in order effectively shield your personal assets from liability to the business’ potential creditors / claimants as intended. The earlier you establish this separation the easier it is to maintain.

Community
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newcoder
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