Question Regarding Cottage Food Law & Llc?

Business By Bridgette1129 Updated 29 Nov 2011 , 4:51am by Bridgette1129

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Bridgette1129 Posted 28 Nov 2011 , 12:03am
post #1 of 8

So my state is figuring out their kinks with the cottage food law but I should be able to bake under it early next year.

Would I just need a business license or would I need an LLC as well?
(In Washington, they're two seperate things. One's through the county and one's through secretary of state.)

Thanks so much

7 replies
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kmstreepey Posted 28 Nov 2011 , 12:36am
post #2 of 8

I think they are two different things everywhere. An LLC is basically a way you can choose to organize your business and protect yourself from personal liability (to some extent) if someone should sue your business. Check with a lawyer in your county or do an online search to get more information on what it means to be an LLC. If you become an LLC, you have certain filing requirements with the state and possibly other requirements to meet on an annual basis.

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MCurry Posted 28 Nov 2011 , 1:14am
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You will need to formally establish yourself as a business (LLC, Corporation, etc.). This you should do with the advice of an accountant or attorney. It is critical for you to do this prior to officially starting your business. It is to protect you personally from any potential lawsuits. They would be suing your company and not you. I set myself up as an LLC.

A business license is typically what a state will require for you to conduct business. You would be registering your business name, tax id, etc. You should be able to go online to your state's small business site to find out more info.

Every state is different so it is best to get professional advice.

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jason_kraft Posted 28 Nov 2011 , 3:40am
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Forming an LLC is simple, you don't necessarily need to pay an accountant or a lawyer to do it.

More info on WA LLCs:
http://nolonow.nolo.com/noe/popup/NNLLCWABAS_faq.html

Don't forget that you'll also need liability insurance for your LLC, and if you do business under a name other than your own you'll need to file a d/b/a notice with your county.

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MCurry Posted 28 Nov 2011 , 1:05pm
post #5 of 8

Jason_Kraft is correct in that you don't need a lawyer or accountant to help you set up an LLC. However, if you are unsure about the different types of businesses and the tax responsibilities it is best to get advice from experts and/or do your homework. I'm fortunate that my accountant does not charge me for quick calls or basic questions.

I set up my LLC by doing all the research on my own and attending a business workshop. After that I contacted my accountant to determine what info he needed.

You should do what you are most comfortable with. Best of luck!

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Bridgette1129 Posted 28 Nov 2011 , 5:12pm
post #6 of 8

Thanks everyone. I know I want to be a LLC versus Corp or Sole Pro. I was just confused on the difference between that and a business license. Thanks for clearing it up icon_smile.gif

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jason_kraft Posted 28 Nov 2011 , 5:43pm
post #7 of 8
Quote:
Originally Posted by Bridgette1129

Thanks everyone. I know I want to be a LLC versus Corp or Sole Pro. I was just confused on the difference between that and a business license. Thanks for clearing it up icon_smile.gif



The LLC status is in addition to being a sole prop vs. corporation, not instead of. If you create an LLC you are by default taxed a sole prop (or a partnership if there are multiple members), but you can file a form with the IRS and elect to be taxed as an S-corp or C-corp instead.

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Bridgette1129 Posted 29 Nov 2011 , 4:51am
post #8 of 8
Quote:
Originally Posted by jason_kraft

Quote:
Originally Posted by Bridgette1129

Thanks everyone. I know I want to be a LLC versus Corp or Sole Pro. I was just confused on the difference between that and a business license. Thanks for clearing it up icon_smile.gif


The LLC status is in addition to being a sole prop vs. corporation, not instead of. If you create an LLC you are by default taxed a sole prop (or a partnership if there are multiple members), but you can file a form with the IRS and elect to be taxed as an S-corp or C-corp instead.




Oh really? That's not what I learned in my accounting class. Guess I need to read up on this more.

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