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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
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Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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Which is more cost efficient - a self proprietor business or

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Which is more cost efficient - a self proprietor business or an LLC in the State of New York?
Also what are the tax implications for each

The business is in telecommunications on the technical side such as cabling etc.

What insurances are required for workers in this field when they are out doing installations etc and traveling between jobs?

Are there other issues to be concerned about in this type of business?
Thank You
Both a sole proprietorship and an LLC are essentially "flow through" tax entities in NY. This means the income and losses from business would be claimed on the owner's personal income taxes (unless the owner elects for the LLC to be taxed as a corporation, which is not available for a sole proprietorship). The biggest difference between the two is in the area of personal liability for actions of the business. The sole proprietorship gives the owner no protection from any liability for any actions of or debts of the business. Thus, if you get into any debt or get sued for any work performed, you as owner would be personally liable for that debt. With an LLC, the owners (presuming you follow all of the proper corporate formalities and do not mingle the funds with your personal funds and maintain proper insurances and funding of the business and do not sign any personal guarantees for debts of the LLC) are not liable for any debts of the LLC. Thus, if the LLC is sued, the LLC is solely liable and they cannot come after the personal assets of the owner of the LLC.

You would require business liability insurance to cover any damages done during installations or work you are performing as well as auto liability insurance and workers compensation insurance if you will have any employees.

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Customer: replied 3 years ago.

What is the tax rate for a LLC in New York State. When are company taxes filed each year. Is company tax due the same for LLC formed in Delaware

As an LLC is a flow through entity, it is the same as whatever your personal tax rate would be. Thus, it depends on what tax bracket your own personal income taxes are at as to what tax you pay on the income of your LLC.

Company taxes are filed based on the annual year and again, as they are claimed on your personal taxes, they are due by April 15, as that is when your personal taxes are due.

Even if you form the LLC in DE or WY or NV or NY, they are all flow through entities and you claim the profits/losses on your personal income taxes.
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