Is Your Daycare a Sole P or LLC???

[kbeutiful]

Hi Everyone

I am currently in the process of opening my family daycare and I wanted to know about those who went down the route when it came to their business of being Sole Proprietorship and those who chose to make their business a LLC. How has it affected your business, I just want to know what route should I go with mines.

[AmyKidsCo]

Sole P. Tom Copeland says not to go with LLC because there's so cross-over of personal items used for the business:

First, since you are using part of your home for your business, the business portion is not protected by the LLC. This means that if your Time-Space percentage was 40%, then 40% of your home (and your furniture and other equipment) is business and would not be protected.

Second, since the LLC is a relatively new type of business entity it’s not clear if child care providers would really get the liability protection that is normally granted a corporation. I’ve heard from lawyers about this and the law is unclear whether an LLC will protect you in a lawsuit over a major injury to a child.

I don’t recommend setting up an LLC unless you understand the additional fees and record keeping requirements as well as the possibility that it will not offer you complete personal liability protection. In general, your best protection is to purchase a lot of business liability insurance ($1 million per occurrence and $3 million aggregate).

http://tomcopelandblog.com/should-you-set-up-a-limited-liability-company-llc