So confused - 2 person business set up as SP?

PatriciaM

Member
My tax advisor recommended the business my daughter and I are starting be a Sole Proprietorship to begin with. I questioned if that was even possible and was told we would each claim 50%. Has anyone ever heard of this? Their reasoning behind this was only having to file taxes for myself as opposed to a General Partnership or LLC. Your thoughts on this would be greatly appreciated!
 

MaplewoodVA

New Member
Sounds like you have some doubts so get a second opinion. Be sure that this person understands the type of business model you wish and the goals and liability risks you're willing to assume both personally and professionally. The type of business entity and risks to each make a big difference.
 

emgmcv12

New Member
That does sound odd, since it's a "sole" proprietorship. I would do more research on that before committing to it, you definitely do not want IRS troubles!

Liz
 

PatriciaM

Member
Thanks for confirming my gut feeling that this was really bad advice. Have done further research and pretty sure I will be going with an LLC and am also looking for new tax advisor! I think she may have been thinking of how you can set up an LLC as a partnership or corporation. If partnership would each claim 50%. Definitely do not want IRS troubles. Want to set it up right from the beginning.
 

vrsi-office

New Member
A Sole Prop is for one person. Only one could be the owner. It sound like you have a Partnership or LLC. Either one of these two could be a 50-50 split. (You could also set-up a corp-c, with each of you owning 50% stock.)

Julie
 

Teresa M

New Member
a sole prop can actually have 2 owners but the best thing is to have a LLC not only for tax purposes but also to save yourself from any legal problems in the future even if it is family.
 
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