Ground Your Business in the 3D
Empowerment

Business Entity

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To Ground Your Biz in the 3D and truly anchor it in a way that gives it room to grow, you'll need to structure your business as its own legal entity.

A Limited Liability Company (LLC) in the United States is a business structure that combines the limited liability protection of a corporation with the simplicity and pass-through taxation of a sole proprietorship. An LLC protects a business owner's personal assets (car, house, savings, etc.) in case your business is sued or defaults on a debt. The main cost of forming an LLC is the state filing fee, which ranges between $40 and $500, depending on your state.

Benefits of structuring your business as an LLC:

Personal Liability Protection

A main advantage of an LLC is that it provides the business owner(s) with personal liability protection. This means an owner’s personal financial assets are not in danger if the LLC goes into debt or is sued. Sole proprietorships and general partnerships do not offer this protection.

Tax Options

  • Pass-through taxation: The default option for LLCs. Profits and losses pass through to each member’s individual tax return and are taxed at the owner’s personal tax rate. The LLC itself doesn’t pay federal corporate income tax.

  • This allows owners to avoid double taxation, which is not the case for corporations.

  • LLCs also have the option to be taxed as either a C corporation (C corp) or an S corporation (S corp), which may be beneficial depending on your situation.

Once your business is consistently bringing in revenue of $50K+ per year, I HIGHLY recommend you convert your LLC to an S corp. This will help you avoid paying self-employment tax out of your own pocket.

Entities in Other Countries

  • Canada: You can set up an LLC in the United States (relatively easy), but the only true equivalent to an LLC in Canada is a Corporation.

  • Australia: The equivalent is a Proprietary Limited Company or Private Proprietary Company (Pty Ltd). This is the most common type of entity in Australia due to its ease of setup.

Always do your own research and seek counsel from a trusted source inside your country on which route works best for you.

Just like separating your business banking from your personal banking, your business also needs to be its own legal entity. Separation is critical, especially if you plan to scale your business.

This also sends a message to both the universe AND your subconscious that you are serious and that this is more than a hobby. Having your legal entity set up and your business bank account is what I call Goddess behavior.

Guess what? Setting up a bank account for your business requires you to establish it as a legal entity. So this challenge is a 2-for-1.

More Benefits of Structuring Your Business as an LLC:

  • The main cost is filing your LLC's articles of organization with the Secretary of State ($40–$500, depending on the state).


    Other possible costs include:


    • Business licensing and permit fees
    • Publication fees (in Arizona, Nebraska, and New York)
    • Optional LLC name reservation fees (required in Alabama)
    • Optional fictitious name fee (also known as DBA name)

  • Compared to C corps and S corps, LLCs are straightforward to set up. Most people can form an LLC on their own without an attorney.

  • Corporations are heavily regulated and require more paperwork. An LLC, by contrast, registers by filing articles of organization and paying the required state fee. This filing typically includes the LLC's name, principal office location, member identities, planned business duration, and any other legally required information.