Creating a Business for Side Programming

I'm an Android developer that has made money over some of the apps I've created in the past year. I have no corporate filing so I am currently considered a sole proprietor in the state of Florida. I would like to incorporate or become an LLC to get the benefits of being such entities like limited liabilities.

I'm not sure on how to organize the business. Or the proper startup procedure on how to do it. I've been doing some research and currently I'm stuck at the classic inc vs llc decision. I'm thinking llc is the way to go but I'm not 100% sure.

Business Summary

• One man shop.
• No intention on going public.
• Currently focused on android mobile but can expand to web and other mobile platforms in the future.
• Only operates out of Florida. Of course product can be used anywhere in the world.

• No conflict with current full-time employer.
• No liability to debtors. (Private assets protection against lawsuits etc.)
• Simple tax filing.
• No double-taxation.

Based on your Business Summary, a single-member LLC is probably a good fit.

My rule of thumb: If you anticipate managing lots of contracts, go with a corporation because it standardizes them, otherwise go with an LLC. Tax is the other major consideration.

Reasons?

One man shop. +1 LLC (no contracts!)

No intention on going public. +1 LLC (again, no contracts!)

Simple tax filing. +1 LLC (yup, just a supplement your personal income tax filing)

No double-taxation. +1 LLC (yup, no need to worry about corporate income vs. salary/capital gains, although you may have to pay self-employment tax with a LLC).

Compliance-related overhead is not so much a problem if you go with a corporation because you can just fill out some no-hassle templates for those documents BUT completing the corporate tax filing is what really makes the corporation a bit more of a hassle in your case.

An LLC probably makes more sense for you because of less overhead.

Your question comes up frequently. I addressed it on my blog in "Should I form an LLC or a corporation? ". The most important portion of that post is reproduced below:

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The following are the factors that, in my experience, are most likely to lead an entrepreneur to form a corporation rather than an LLC:

• An expectation that outside funding will be sought, especially from institutional investors (venture capitalists, in particular, tend to invest only in corporations).
• A desire to offer tax-advantageous equity ownership interests to employees and independent contractors (more straightforward to accomplish with a corporation than with an LLC).
• Prospective customers may feel that a corporation is more substantial and more “real” than an LLC (marketing and sales consideration).

The most significant disadvantage of a corporation is compliance-related overhead : The need to conduct annual shareholder meetings and regular board meetings and to prepare and file minutes for those meetings.

So what I have seen among my clients is: If none of the pro-corporation factors described above is present, the client forms an LLC to avoid the expense and effort associated with compliance-related tasks.

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Disclaimer: This post does not constitute legal advice and does not establish an attorney-client relationship.

I would go LLC. It has a lot of advantages and is far less complicated to set up and maintain than a corp...S-corps are also a possibility and have many advantages as well, but for simplicity sake LLC. Check legalzoom.com