Home Daycare Providers...are you a Sole Proprietor, LLC, or Corp?

[TwinKristi]

Sole proprietor

[LysesKids]

Sole Proprietress... I'm an LLC for my jam business, but it's on hold now. Not much extra an LLC can give me for childcare

[NITC]

What if the daycare insurance keeps dropping you off?

This is all copied and pasted from Tom's site:

If you form an LLC or incorporate your business you may get some personal liability protection. This means that your personal assets may be protected if you are sued. However, you should not assume that such protection is automatic. If you are negligent and a child is injured or if you are accused of child abuse - being incorporated won't protect you. In addition, there are many business formalities to follow as a corporation (separate business and personal records, stockholder meetings, following your bylaws, etc.) and if you fail to follow them all you could lose this protection.

The key benefit of an LLC is limited personal liability. The idea is that if someone sued you she could not get any of your personal assets (house, personal property, savings, etc.). There are, however, several problems with this.

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).

We are thinking to be LLC because the liability insurance we have keeps dropping us. It is obvious that when there is injury or abuse complain, it won't automatically protects you getting sued. Is this applicable in all state? Atty. Copeland is from Minnesota. We are from California.

[NITC]

My husband and I talked about this in length. We decided that the LLC just made us feel better, and if it ended up offering us no extra protection except piece of mind, we were okay with that

Would like to connect with you, to get information being LLC Childcare Provider

Thank you!!!

[Unregistered]

This is all copied and pasted from Tom's site:

If you form an LLC or incorporate your business you may get some personal liability protection. This means that your personal assets may be protected if you are sued. However, you should not assume that such protection is automatic. If you are negligent and a child is injured or if you are accused of child abuse - being incorporated won't protect you. In addition, there are many business formalities to follow as a corporation (separate business and personal records, stockholder meetings, following your bylaws, etc.) and if you fail to follow them all you could lose this protection.

The key benefit of an LLC is limited personal liability. The idea is that if someone sued you she could not get any of your personal assets (house, personal property, savings, etc.). There are, however, several problems with this.

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).

Also, I talked to several lawyers who I know personally, you basically can't be a true LLC if you live in the business (as many of us do). If an adult or child gets hurt in your daycare and it's your home, you're going to lose the property. For example, say you do Uber. It's no longer considered your personal car. No, someone can sue you for it. Let's saw you have a shiny new beamer, that you don't do Uber with, no one can take that.

[Unregistered]

How does it reduce taxes? My entire downstairs is dedicated to my daycare

I incorporated, reducing my taxes by hundreds each month.

I’m considering single owner LLC has does it reduce taxes could you give me more info please?