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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 15831
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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If I were to establish a 'Sole Proprietorship' could I

Customer Question

If I were to establish a 'Sole Proprietorship' could I purchase a insurance policy that protects me and my homelife from debts and liabilities of the business?
JA: Because laws vary from state to state, can you tell me where the business is located?
Customer: Virginia
JA: Has anything been officially filed? If so, what?
Customer: No. I'm trying to figure out what would be best first.
JA: Anything else you want the lawyer to know before I connect you?
Customer: no
Submitted: 11 months ago.
Category: Tax
Expert:  Lane replied 11 months ago.

Hi Debbie. My name's Lane

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THe sole proprietorship is what's call a default business type ... meaning that if you start doing business and DON'T set up an LLC, S-Corp, or C-Corp then IRS treats you as a sole proprietor (you'll simply file a schedule C to report the income and expenses of the business, with the profit flowing to line 12 of your regular tax return (business income or oss).

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What you MIGHT want to consider is an LLC which DOES provide the corporate liability protection of the corporation with the simplicity of a Sole Proprietorship.

...

But the Sole proprietor is seen as NOT separate and distinct by state corporate law.

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You Certainly CAN buy business liability insurance (be sure of the policy specifics) to cover those business liabilities in a different way

Expert:  Lane replied 11 months ago.

Please let me know what question you have from here.

...

Lane

I hold a law degree (J.D.), with concentration in Tax Law, Estate law & Corporate law, an MBA in finance, a BBA, and CFP & CRPS (Chartered Retirement Plans Specialist) designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, on three continents, since 1986

Customer: replied 11 months ago.
I've considered an LLC. I am totally new at this business thing and I kind of want to ease in to all the requirements of a business, if you know what I mean. I like the fact that all income is reported on my taxes and I don't have to file quarterly reports and pay federal insurance. Right?
Customer: replied 11 months ago.
I've already paid $52. If you call me is it another $52?
Expert:  Lane replied 11 months ago.

It is BUT, that's an additional offer that the site throws out there (that did n't come from me) We can still continue chatting here and there's no additional charge

Expert:  Lane replied 11 months ago.

On your question... that's exactly right. You'll simply be taxed on whatever profits you end up with for the tax year... no quarterly payroll taxes, and no unemployment insurance either.

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I typically recommend that my clients start with the LLC

Expert:  Lane replied 11 months ago.

A Virginia LLC is created by filing Articles of Organization (Form LLC-1011) with the Virginia State Corporations Commission. The articles must include: the LLC's name and address and the name and address of the LLC’s registered agent. The articles may be filed online at the Virginia New Entity Formation webpage, or by mail. The filing fee is $100.

Expert:  Lane replied 11 months ago.

Please let me know if you have ANY questions at all, before rating me.

If this has helped, and you DON’T have other questions … I'd appreciate a positive rating (using the stars or faces on your screen, and then clicking “submit")

That’s the only way JustAnswer.com will credit me for the work here.

...

I have clients coming to sign some papers, but will be back on in 45 minutes or so. Let me know if you have any questions at all

Thanks,

Lane

Please let me know if you have ANY questions at all, before rating me.

If this has helped, and you DON’T have other questions … I'd appreciate a positive rating (using the stars or faces on your screen, and then clicking “submit")

I hope that you’ll rate me based on my accuracy and thoroughness, rather than any good news/bad news content.

That’s the only way JustAnswer.com will credit me for the work here.

Thanks,

Lane

Expert:  Lane replied 11 months ago.

Hi, Lane here.

...

I’m just checking back in to see how things are going.

...

Did my answer help?

If so, I'd appreciate a positive rating, using the stars on your screen, and then clicking “submit" – That’s the only way I’ll be credited for the work.

But if you need more on this please let me know

Lane