The Notary & Setting Up a Business

I'm in several social media groups for notaries and small businesses and one question I see asked all of the time is:

Should I create a business entity for my business and get a tax ID number?

I am not a lawyer nd cannot give legal advice, but for me, when I opened by business there were several reasons that I opted to create a limited liability company (LLC) for my business instead of acting as a sole proprietor (fictitious name/DBA (do business as)). Those were:

1. Most sole proprietor businesses do not use an employer identification number (EIN) as the income that they generate is passed through on their personal taxes, so an EIN isn't really needed. However, that means when doing business with other businesses (for supplies or services) and they need a W-9 (Request for Taxpayer Identification Number) you are giving out your social security number.

2. Sole proprietors are held personally liable for any mistakes, issues, damages, etc. that occur as a result of their business activities.

(Kappel, Jul. 2020).

Below is some information on the pros and cons for sole proprietor, LLC, and a corporation:

Sole Proprietor

Pros	​Cons
Easy and inexpensive to formand inexpensive to form	Personal liability
More Control	Difficult to raise capital
Quicker tax preparation	​More responsbility
Less paperwork	No room for expansion

(Kappel, Jul. 2020)

Limited Liability Company

Pros	Cons
Limited liability	Added costs
Flexible membership	Possible issues in transferring ownership
​Management structure
Pass through taxation
Heightened credibility
Limited compliance requirements

("How to Form an LLC...", 2022)

Corportions (S & C Corps)

Pros	Cons
Personal liability	Potential delays in setup
Easy to transfer ownership	Rigid formalities, protocols, and structure
Ease of raising capital	Double taxation (C Corp)
Tax benefits (S Corp)	Expensive

("Advantages...")

We all have our own reasons for the things that we do; those are my reasons for operating as a LLC. Make sure that you do your research to find the best option for you and your business. If you're still unsure contact an attorney for advice on what structure would you and your business best.

If you know what type of business entity you to create but just would like some general assistance, call me! I can help! I've been assisting small business owners for over 10 years in getting their businesses registered with the State of Florida.

If you have any questions, please do not hesitate to contact me:

Shannon “Ivy” Colón, Florida Notary Public

Certified Remote Online Notary

NNA Certified Notary Signing Agent (background screened)

(561) 325- 8579

ivy@notarybydivine.com

Please note that the above was provided for informational purposes only and should be construed as legal advice. I am not a license attorney and cannot give legal advice. If you have legal questions, please contact a Florida licensed attorney. I can provide you with a referral if you need one.

1. Kappel, Mike. “Pros and Cons of a Sole Proprietorship.” Patriot Software, 30 Jul. 2020, https://www.patriotsoftware.com/blog/accounting/sole-proprietorship-right-job/.

2. “How to Form an LLC, What Is an LLC, Advantages Disadvantages and More.” Back to Top, https://www.wolterskluwer.com/en/expert-insights/how-to-form-an-llc-what-is-an-llc-advantages-disadvantages-and-more.

3. “Advantages and Disadvantages of a Corporation.” Business News Daily, https://www.businessnewsdaily.com/15805-corporation-advantages-and-disadvantages.html.