I have seen a lot of musicians waste their money paying to become an LLC when they are very early in their career.
***Disclaimer*** The following are my opinions from my own experience. I am not a lawyer or a CPA:)
Here's your Wisdom Wednesday knowledge bite for today.
You don't need to pay to become an LLC unless you are:
Making a good deal of money and are considering forming an S Corp or some other tax sheltering entity
Or
Feel that what you are doing makes you legally vulnerable in some way such that you want to protect yourself. Although, keep in mind that the term LLC means "limited" liability so depending on what happens, it may still not fully protect your personal assets.
I'll be honest with you. I didn't even understand this topic for a long time. And really, I didn't need to until I started making enough money to make it worthwhile for me to consider forming an S Corp.
The point I want to make sure you understand is that an LLC is not a tax designation. Meaning...that you can be an LLC in the US and you still have to file as either a sole proprietor, a partnership or a corporation.
An LLC is a legal designation that offers you limited personal protection from what may happen in your business.
So what you DON'T need to do in order to start making money as a musician is to set up an LLC. At least not yet.
Right now, invest your time and money into building your business. You can cross that bridge when you come to it.
Always in your corner,
Bree Noble
