This section of the forum is for discussing the business and finance issues of the t-shirt industry. Which business structure to use (sole proprietor, LLC, S Corp, etc), how to handle billing, where to register your business and get the proper licensing, etc.
Each business entity has it's pro's and cons. You'd be best paying a good CPA from the beginning to evaluate your business needs. I've personally run a C-corp and a Sole Proprietor. C-Corps can get tricky. You really have to do things by the book to really take advantage of them. Sole Proprietor is easier because you file just one set of taxes at the end of the year. You can move money from the business to your personal accounts without any issues. We incorporated as we started to grow and hired more employees. We wanted to shield ourselves and our assets from anything unfortunate that may happen like a lawsuit or disgruntled employee etc... Get a good CPA from day one. Set up quick books or an accounting software and keep it reconciled and clean. Take it from me entering historic data can be a major headache.
I was 23 when I started and my idea of a filing cabinet was in the form of multiple shoe boxes. When tax time came I just handed them to the accountant. Expensive lesson #1.
You'll need a resale Id from the state. I'm not sure where you're at but in CA it's the State board of equalization. Lesson #2 pay your sales tax on time. You don't want to mess with the state board. It's really not hard to file. Just keep your records updated and you won't have any problems. Also if you do wholesale stuff don't forget to get your customers to fill out the resale form if they don't want to pay tax. Don't assume you can get it later from them. It may be years before the state board comes knocking but when they do and they will, they'll want to see those signed forms. Just my 2 cents.
Good luck!!!
Bryan Ray
Last edited by Rodney; March 18th, 2008 at 01:05 PM.
Reason: removed link to website as per forum rules
Hi Patrick:
I have an LLC. In GA it is filed with the Office of Secretary of State.
Quote:
Originally Posted by oversizedfilm
Lesson #2 pay your sales tax on time. You don't want to mess with the state board. It's really not hard to file.
Amen. The GA forms are super-easy, but my partner didn't think we had to file them since we had no sales in GA. Wrong. They fined us $1200 ... $100 for every month we didn't file. (They ended up waiving the fees as a one time courtesy.)
Quote:
Originally Posted by oversizedfilm
Also if you do wholesale stuff don't forget to get your customers to fill out the resale form if they don't want to pay tax.
Wow, I didn't even think about this. This is even for retailers outside your state, right? Can you point me to the form, or do these vary from state to state?
forming an LLC would probably be your easiest route at this point. i don't know where you are but here in maryland you just fill out a form (articles of organization) with your business name and what you plan to do. then you file that. costs about 100-200. mine was 200 because I expedited the process and took it down to the offices in person to have it filed that day. this protects your business name and you get some corporate protection but do not have to hassle with the paperwork of a corporation. as an LLC the tax liabilities get passed down and you the owner pay them on your personal tax return instead of filing a company return.
for the sales thing here you just go online and request an federal employer id number which functions like the SSN for your business.
Unless there is a need to separate yourself with liability (you will have a shop where you have slip in falls) or equipment with employees a Sole Proprietorship works well.
I have DBA and it's worked well for 3 years. Never had a problem, have EIN, sales tax, everything.
Even if I had an LLC I would have sign personal guarantees on all the equipment anyway (for financing) so I'm still liable for the $$ part.
I started out of my home with a sole proprietorship. There really wasn't any need that justified anything more than that. When we moved into a storefront, with the liability issues, we went for the llc
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Hard labor kills, make t-shirts instead.
In Florida, all you have to do is go to the Secretary of State's website - and for $99.00 (I'm pretty sure that's the correct cost), it walks you through the entire process and you can do everything on-line.
How is your business setup? 
(They ended up waiving the fees as a one time courtesy.)
