I’m starting a small construction company because there is a demand for my work in my area.
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I’m starting a small construction company because there is a demand for my work in my area.
I need to get a tax ID number for my construction/ remodeling business. I mainly work alone, but need at least one employee. Should I start this as a sole proprietor, or should I spend the money and get an LLC?
Asked on October 12, 2017 under Business Law, New York
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 6 years ago | Contributor
Create an LLC. LLC stands for "limited liability company"; that means it "limits," or reduces, your personal "liability," or legal exposure to business debts and obligations. While the protect is not absolute or perfect--it won't protect you from any loans or debts you personally guaranty, from liability for wrongful acts you *personally* do (e.g. if you are driving the company van and run someone over), or certain tax debts--it *will* protect your personal money and assets (e.g house) from most business debts or liability. So with an LLC, if your business violates a contract, you cannot be personally sued; if your employee runs into someone while driving for work, the business can be sued, but not you personally; if the business has a loan which you did not guaranty, you would not be responsible for it; etc. You really want that protection for your personal assets and money.
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