If you have been following my posts, you know that I recently talked to a business owner, who had been interested in hiring me a contractor. He still wanted to hire me, but there was an obstacle, I had to create a LLC (Limited Liability Company) instead of Sole Proprietorship.
The main difference between a single-person LLC and a sole proprietorship is that an LLC protects your personal assets if you are sued. It separates your personal and company assets. Most entrepreneurs (and online forums) have recommended using an LLC company structure instead of a sole proprietorship. I founded a sole proprietorship in July, because I just wanted to overcome the (daunting) obstacle of “having a business.”
However, motivated by the potential to make money, I figured out how to create an LLC quickly.
- Apply to the Washington Secretary of State
- Grimace at the $200 cost of filing with the Washington Secretary of State
- Get a new EIN (employee identification number) (Note: I didn’t do this and realized that I needed to because my old EIN for the sole proprietorship may not work for the LLC since the name is different)
- Use the Secretary of State-provided UBI (unified business identification) to apply for a license with the State of Washington (-$20)
- Apply for a license with the City of Seattle (-$110)
- Be grateful that all of this is online
Even with the holidays looming, I managed to receive all my paperwork (state and city business licenses + LLC certificate of formation) by the beginning of year. It’s amazing what you can do when you are motivated.
On a personal note, I am strongly motivated by a lack of money. Uber has become my savior, providing a constant $15/hr before expenses. While I hate the alarm at 5:15am every morning, I know that driving Uber will earn enough money to survive until my first science writing client comes through.
That said, I don’t like driving as much as science writing, so I’ve also been motivated to cold call aerospace start-ups (by email), offering to create a blog and other content for them. I also pulled together a website for my new LLC (which doesn’t share my name) within about 24 hours (minus the time for the DNS to propagate).
I’ve learned that I can get a lot done in a short amount of time – because I want to avoid making $15/hr and instead move into more lucrative contracting.