Starting a company for comic writers... LLC or Sole Proprietorship?

After figuring out I wanted to write comics (graphic novels, manga, etc.) and writing several scripts, I knew I had to hire and pay an artist a proper wage before I had my comic.

... So... I knew I needed to start a company... maybe?

Why? Well, for one thing, you can write off loses on taxes which can help the first couple years. Also, if you ever start making a profit, you can deduct expenses before you pay taxes as well... and... well, I had heard I should start a business for this stuff, right?

I just had to figure out the structure for the business.

I am in the USA, so I had a couple options:


I don't have any partners in my business and I don't plan on being a Corporation at this point (too big), so I threw out Partnership and Corporation.

That left me with Sole Proprietorship vs. LLC (Limited Liability Company).

I chose LLC. Why?

LegalZoom covers the tradeoffs better than I could, but the main one was Owners are Not Personally Responsible for Company Debts.

I wanted to make sure I had a clear separation between me and my business. If something goes wrong, it won't ruin my life. After all, not a lot of small business succeed.

That does mean there was a little extra work in getting the LLC set up, but it was well worth it.

Also, make sure you keep a clear separation between your personal and business costs. That means you should get a separate bank account and credit card for your business. Even if you have to transfer money in from your personal account to fund it, that is still ok. You are keeping the records separate.

If you don't do this, legally, someone could come after you by Piercing the Corporate Veil. This basically means they can show you are really a Sole Proprietorship and can come after you for personally for business liabilities.

It isn't much work to setup those separate accounts, and you will want to make sure you do it just for that reason alone.

Also, it makes you more professional to use your LLC. :) 

You can even setup a business email with your site via Google GSuite (gmail)... really, really easy.

Anyway, I went with LLC because it clear separated me from my business. I hope this helped you.

-Jeremy

P.S. - If this helped, please support me by reading my free webcomic halfwing, thanks!

Comments

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