I have a consulting business that is rather small side income. I was wondering how I should structure my business to make sure I am completely shielded of Personal Liability? Dealing with contracted hires can be a pain sometime and I want to make sure my personal assets are protected. There are no expenses minus a website fee. (mostly online consulting) I typically deal with advising course of action for securing funding/pitch books for tech start ups/other fields as well as doing some base underwriting and financial analysis for various companies to find out proper leverage/forecasting.
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when you meet with clients, bring polaroids of their kids
I'd spin it as a "Time Machine"
Register the business as an LLC. Move all assets / liabilities to that entity.
Talk to an accountant. People blindly form LLCs when sometimes S-corps and other shit might be better.
Judging by the information OP provided, a single member LLC would be better in this case.
Thank you all, I filed as a single member llc. It is a small business (more of side income) with all of the assets contained within business accounts I want to make sure that I am shielded in case something happens (data breach). I take precautions like vpn and other things that one would use working remotely at work but with access to financial data of clients I want to be as safe as possible (personally).
Form a LLC in St. Kitts, then employee yourself as a contractor or regular employee. To file a claim against a LLC registered off shore in St. Kitts one must register a claim with the government and put up a $100k bond as to assure you are not wasting the governments time with frivolous matters. Most never bother filing suit due to this especially if you’re only billing in the 10s of thousands.
man i hope this is true
This is true and should cost 1-3k depending on how quickly you want it done, 5k max for a good lawyer. If you’re feeling extra adventurous you could also buy a beach house and gain the passport and citizenship too for roughly 400k and some months waiting time. This will allow you to avoid paying some taxes on those consultanting fees if done correctly.
This is what I'm talmbout
The useful bits of knowledge you pick up well traveling and speaking with accountants could potentially save you a small fortune in taxes in the future.
Given the description of your company and the way that you likely manage it, if someone REALLY wanted to come after you for some reason it's likely that you've pierced the corporate veil anyways. An LLC is a useful deterent, especially against something small, but if there's a large claim and its worth the legal fees I wouldn't assume you're 100% safe.
Not saying an LLC is wrong move here or that you should be worried, but want to give you a fair warning as well.
You should talk to an attorney.
This is really the right answer. You can also look into Errors and Omissions Insurance for your business. I'm not sure the pricing, so it may be cost prohibitive. But if things start to take off for you, you will likely need it eventually.
Either way, a lawyer will be able to point you in the right direction.
Make sure to keep separate bank accounts, and maintain the books and records. One key issue in piercing the corporate veil for an LLC is whether corporate separateness was observed. If you are grossly negligent or commit some type of malfeasance or malpractice it is also possible they could pierce the veil. If you believe that there is a risk of a catastrophic liability then form a C-Corp. In line with the St. Kitts recommendation if you want to make your assets near judgement proof create a Cook Islands Trust, they are nearly inviolable and you have to fly to the Cook Islands to file a claim.
In theory this is a good idea, but due to the 08 recession, Panama papers etc and the increased AML/KYC laws that probably fuck with every IA and corporate banker on this forum. It’s highly unlikely you’ll be able to set up a bank account with a large “reputable” international bank with just a cook island trust.
So unless you want to have to tell your clients that they need to wire your money to Georgia, Mongolia, Paraguay or Vanuatu I would say there are better options. Just my .2
Pro Tip: Using your corporate card for things that can be reasonably associated with the business (Phone Bills, Laptops, etc.) effectively lets you use those expenses as a tax write-off as it lowers your corporate income on paper.
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