Re: [Nolug] OT Consulting Contracting etc.

Dennis Bourn <dbourn@clkenergy.com> writes:

> I don't know what State and/or Federal issues I might encounter,
> Business license and such, or Insurance issues I would need to think
> about.

I've done some consulting on the side. I have never relied on it as
my primary source of income (though, I've been tempted to in the
past). That said, I may be able to offer some insight.

After doing some research online, I set up an LLC to limit potential
personal liability (as opposed to a sole proprietorship). This was as
simple as

 1. Filling out the proper form (available from the Louisiana State
    website).
 2. Getting the form notarized.
 3. Sending it in to the state.
 4. Requesting an EIN from the Federal Government.
 5. Used the EIN to set up a business checking account.

My understanding (IANAL) is that this provides a certain amount of
legal protection in case anything goes wrong. Its possible I've
completely misunderstood everything and I'm in deep doo doo. But the
tax adviser I had help me with taxes here in Pennsylvania didn't say
anything about that. (I started the LLC in LA and refiled it in PA
when I moved.)

Taxes. As long as you are the only member of the LLC, it works just
like a sole proprietorship tax-wise. Again, I was advised not to
make my spouse a member of the LLC as I could lose some or all of the
liability protection the LLC is supposed to provide.

Beyond that, the most important thing is to have a way to send out
invoices and keep records of income. You can use paper and pen or
GnuCash (I'm do little enough that it works for me) or QuickBooks.
But use something! I've had problems in the past because I'm a
terrible record keeper.

The other record keeping you need is good records for the time you
spend working on contracts. Don't guesstimate. I am constantly in
Emacs, so I use timeclock.el and planner.el for keeping track of
time I spend in projects. Every month, I run a report, copy the hours
to GnuCash and send an invoice.

That's what *I* have done. It works for me and I haven't gotten in
any legal trouble. Doing business is really, really easy … as long as
you can find the clients.

I'm interested in what others have to say on this.

Mark.

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