Originally Posted by Ucwarrior1
Well how easy is it to change to an LLC later down the road? If I have no assets (a $1500 honda accord and $21,000 in student loan debt) then it really isn't that important right? I'm a server on the side and I'm wondering if there are benefits to being a sole proprietor. I also don't know which may be better, registering the business in Wisconsin or Minnesota. I reallllly don't have up front money for an attorney or an accountant for these suggestions
It isn't just about protecting your current assets. If someone sues you and you can't cover their damages immediately, you might be paying for years to come. That's a super big bummer when you know that the court is going to garnish your wages for the next 10 years.
I believe changing your business entity from a sole proprietorship to an LLC is as simple as signing some legal paperwork and having your signature notarized. It might depend upon your particular state's laws since business laws can differ from state to state, but you'd want an attorney to get everything drawn up and sent in anyway. If you're doing something simple, I know LegalZoom.com has gotten a ton of good ratings from consumer reports for its ease of use and affordability. Something is better than nothing!
I don't know the answer to your question regarding which state should house your business. I would think that the primary residence for your bus would be the state you're doing business in, but I am definitely not an expert in this area. Something makes me think there are weird tax laws for some businesses in Minnesota, but I'm not from there so I can't be certain. I do know that Wisconsin doesn't have reciprocity with the majority of other states for traffic violations, but that doesn't really help you from a business point of view.