The Couch: Register a Business?

The Couch is a place to exchange ideas and brainstorm, not only for its contributors but also for our readers who engage in the ensuing discussions. Sometimes, a person needs to ask a large number of people what the best course of action is to be able to make as wise a decision as possible for their business. Thank you to this week’s Couch contributor!

A question from one of our readers: I am relatively new to this profession. Some colleagues have told me that it is completely superfluous and unnecessary to set up a business officially, while I see that others have one (mostly LLCs). An LLC is meant to protect your assets from liability, but how likely are you actually to be sued? Can anyone attest to the potential usefulness an LLC? Are there any other business configurations you recommend, or is it all unnecessary in this profession?

Thank you all!

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4 thoughts on “The Couch: Register a Business?”

  1. Registering is a good idea, not only for asset protection but also for tax purposes. I suggest you consult with an accountant. LLC’s or S-Corps may be a good idea depending on the type of business you do, agency v. single employee.
    I hope this helps.

  2. Jason Knapp says:

    By default, an independent contractor begins with the business structure “sole proprietor.” While this designation is automatic from the standpoint of the IRS and some states, other state require you to file and pay a fee. LLC offers the advantage that it protects your personal assets from being seized in a lawsuit. Historically, lawsuits of translators are rare; lawsuits of interpreters, rarer still. Another option is an S-Corp. This is a tax designation rather than a particular business structure. It requires special filing with the IRS but offers the potential for substantial tax savings if your gross income is above a certain threshold, typically in the $60-$70K range. The Business Practices Education Committee of the American Translator Association has more detailed information on business structures and how they can protect you. This is important to know as there is pending national legislation that will affect whether freelancers across a range of industries, including T&I, are classified as employees or independent contractors.

  3. Viktoryia Baum says:

    The best answer is: it depends. It depends on your personal preferences, whether or not you want to have a company name, how much you’d like to go through trouble of registering an LLC, how hard it is in your state to set up an LLC. Personally, I have worked in this business for over 15 years and I do not have an LLC. That is my personal preference, and many people would disagree with me. I pay my taxes to the IRS and the state, and I have never had an issue. In terms of the likeliness of being sued——would you perhaps say that if you EVER are sued, this will be just as much of a headache and a highly stressful inconvenience whether you have an LLC or not…. As long as you provide quality services and communicate with your clients promptly if there is an issue, you should be fine.

  4. Navigate with care, as there is a world of bad advice out there. The question you pose is much like asking: What car should I drive? And who should I insure it with? Combustible engine or electric? Only you can know what is right for you.

    The one thing you should do is set up a Sole Proprietorship, to buy time until you understand your own competency and market. These two, competency and market, determine your exposure, For now, it is important to have an IRS issued number to prevent giving out your social security and on the same note set up a P.O. Box for safety and consistency. A sole Proprietorship protected by an insurance policy is a pragmatic start until you can make a fair assessment of your circumstances.

    Good luck to you!

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