If I am a daycare provider and we have 14 children that we take care of daily, should I turn it into an LLC?

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If I am a daycare provider and we have 14 children that we take care of daily, should I turn it into an LLC?

If yes, why and what cost will I incur to do so? Also what about tax consequences?I setup the business like a sole proprieter.

Asked on March 15, 2013 under Business Law, California

Answers:

Hong Shen / Roberts Law Group

Answered 8 years ago | Contributor

Yes you should, just for your own protection. An LLC would protect you if something goes wrong. I assume you also have insurance since you have so much responsibilities dealing with kids. Filling for an LLC is not that expensive. You have to pay $800 each year to the tax board, plus a percentage of the money you make. Tax wise, it is not so much different than your personal tax. If you have employees, you should also set up payrolls. Talk to an attorney to find out details.


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