Can anyone please guide me how to register for a consulting business. I have got an opportunity for an Instructional Design Contract and they asked if I was already registered, which I was not because I was working full time before this.
I'm not a lawyer, but here's what I can tell you. There are multiple options for setting yourself up as a business. A one-person business can be set up as a sole proprietorship, a limited liability corporation (LLC), or a corporation. There are advantages and disadvantages to each.
The legalities can vary somewhat based on where you live. To determine what type of business is righ for you, go to your state's website (or your government's website if you live out of the US) and look for their section on business. For example, Minnesota (where I live) has quite a bit of information about starting a business (https://mn.gov/portal/business/).
FYI: Sole proprietor is the easiest method. However, some companies won't hire a sole proprietor due to concerns about contractor-vs-employee rules. I suggest you ask the company that wants to hire you what their requirements are.
I agree with Judy. The LLC provides you a barrier between you (your house, property, funds, etc.) and the client you are working for. If something goes wrong and the client sues you in court, the client only can sue the LLC and not take your house and funds. You can look at companies like Legal Zoom - setting up an LLC is about $100+. You can also do it yourself with state documents and then get it notorized.
3 Replies
I'm not a lawyer, but here's what I can tell you. There are multiple options for setting yourself up as a business. A one-person business can be set up as a sole proprietorship, a limited liability corporation (LLC), or a corporation. There are advantages and disadvantages to each.
The legalities can vary somewhat based on where you live. To determine what type of business is righ for you, go to your state's website (or your government's website if you live out of the US) and look for their section on business. For example, Minnesota (where I live) has quite a bit of information about starting a business (https://mn.gov/portal/business/).
FYI: Sole proprietor is the easiest method. However, some companies won't hire a sole proprietor due to concerns about contractor-vs-employee rules. I suggest you ask the company that wants to hire you what their requirements are.
You may need to consult a lawyer.
Thank you so much Judy. This was very helpful!
I checked with the company and they said most of their contractors have LLCs so I will be moving forward with that.
Appreciate your help!
I agree with Judy. The LLC provides you a barrier between you (your house, property, funds, etc.) and the client you are working for. If something goes wrong and the client sues you in court, the client only can sue the LLC and not take your house and funds. You can look at companies like Legal Zoom - setting up an LLC is about $100+. You can also do it yourself with state documents and then get it notorized.
This discussion is closed. You can start a new discussion or contact Articulate Support.