I was lucky that in my specific situation I didn’t have to worry much, and we went with an LLC, because who knows if not getting that taken care of ASAP would’ve eventually led to a huge legal issue!

Also, taxes can bite it ;) They’re way too high, amirite? Alas, it’s not like we get free health insurance and higher ed like Europeans do.

Stellar breakdown, will be sharing!

And, forming an LLC outside of one’s home state is a very bad idea for 98%+ of people.

For example, if someone in CA forms an LLC in TX (to try and avoid the $800/yr franchise tax), and then they operate that TX LLC in CA; they are illegally transacting business in CA (that TX LLC is an unauthorized entity).

They’ll then need to register their TX LLC as a foreign LLC in CA. This means, they now pay 2 filing fees, a registered agent fee out of state, and still have to pay the CA annual franchise tax (as well as file the TX PIR). Yikes! Double the cost!

Worse, taxes are paid where the money is made. So even if they formed an LLC in TX, but made/derived their income while in/from CA, they’ll still have to pay CA taxes.

Hope I didn’t “burst the bubble” too much here lol… just don’t want people getting the wrong information. Hope this was helpful :) And you’re right though… TX is an awesome state for forming an LLC! (if that’s where you live and/or that’s where your business is located).

Let me know if you have any questions :-)

Hi Blake! I’m so sorry I missed your comment when you first left it!

Yes, the initial reason I incorporated was because I went from freelancing on my own to building a small business with another person. Creating an LLC seemed like the best option for the partnership. When we decided to close our business and go back to individual freelancing, I was going to close the LLC and just be a sole proprietor again, but the attorney I engaged to draw down the business recommended that I keep the LLC open, and just rename it for a few reasons—continued liability protection, ease of tax filing, and because it was less expensive to rename the LLC rather than decide later that I wanted to do it again, and start from scratch.

I do feel, however, that the LLC does lend a bit more credibility when I send potential clients proposals and contracts. There’s a business name there rather than just little ol’ me. :-)

Hope this helps, and again, I’m sorry it took me so long to respond! :-)