Incorporating your business?

[AndreFuture]

Has anyone gone the legit route and started an LLC? I'm ready to buy my own domain, set up banking, and all that jazz but want to keep my business separate from my personal life. I've done a bit of online research on the subject, but most of it is (obviously) not geared towards sex workers. Any tips about finding an industry-friendly, Delaware registered agent or other advice?

[corndog]

I'm not sure what you'd achieve by forming an LLC for an escorting business. I am by no means a legal expert, but my understanding is that the main the purpose of forming an LLC is to protect an individual (or individuals) from liability for actions taken by the company. I don't think that would work in an escorting situation due to the extremely personal nature of the service; the client is engaged with you as an individual, and I think you'd be hard pressed to argue that they were doing business with your "company" and not you.

 

Beyond that, I don't think that escorts are very exposed to civil liabilities. It's very unlikely that a client would sue you for some sort of damages, due to the sensitive nature of the work, and most clients' very strong desire for privacy.

 

On the other hand, if your main goal is to keep your business accounts separate from your personal finances, that can be easily done without going to the expense and trouble of establishing an LLC.

[+ GregM]

Yeah I don't see a hooker starting an LLC type thing either. Now if you were starting your own porn company or sale stuff (besides your ass) online sure but not for being a hooker. Remember being a hooker is illegal.

 

Hugs,

Greg

[Kevin Slater]

I agree with the above. Also, I see this leading to the phrase "conspiracy to commit prostitution" (I just made that up).

 

Kevin Slater

[+ Topseed]

I suggest consulting both an attorney and an accountant about the legality of this. It's possible that the feds would see this as a means to avoid taxes. In short, doing this might invite more outsider scrutiny than an escort would prefer.

[+ IronMaus]

Starting an LLC can be great for escorts. It can prevent hassle from the IRS and the consequences of moving so much money through personal accounts. You don't want to be caught with you pants down ;-)

 

Also, it can help keep your credit in good standing and easily strengthen it. Using a business account attached to your LLC, you can pay for work expenses and later write them off.

 

Frankly, there is nothing wrong with paying taxes. I am moving towards this goal because I live in California and my taxes go to many things that benefit me immensely.

 

You shouldn't do this on your own. Hire an accountant to do it. There are plenty familiar with this process and they can ensure it won't bite you in the ass.

[+ Keith30309]

I'm not sure what you'd achieve by forming an LLC for an escorting business. I am by no means a legal expert, but my understanding is that the main the purpose of forming an LLC is to protect an individual (or individuals) from liability for actions taken by the company. I don't think that would work in an escorting situation due to the extremely personal nature of the service; the client is engaged with you as an individual, and I think you'd be hard pressed to argue that they were doing business with your "company" and not you.

 

Beyond that, I don't think that escorts are very exposed to civil liabilities. It's very unlikely that a client would sue you for some sort of damages, due to the sensitive nature of the work, and most clients' very strong desire for privacy.

 

On the other hand, if your main goal is to keep your business accounts separate from your personal finances, that can be easily done without going to the expense and trouble of establishing an LLC.

 

+1

 

If you insist on incorporating then ask an accountant about a PSC. I suspect that incorporating in any form is not the right answer unless you have allot of income and the benefits of incorporating justify the added expense. There's nothing wrong with simply paying taxes on income via a schedule C on your 1040.

[+ Keith30309]

Also, I see this leading to the phrase "conspiracy to commit prostitution" (I just made that up).

 

Kevin Slater

This is correct, though at the end of the day I'm not sure it would make allot of difference were you to be prosecuted. If a prosecutor were super gungho (haha - my spellcorrect made that "bunghole") and up for reelection he might be looking for someone to make an example of.

Standing up a LLC or other entity raises your profile and generates questions.

[AndreFuture]

Well, this might be another place where male and female escorts are different. Yesterday, I sat in on a (female-focused) webinar about forming an LLC as part of how SWs can keep personal and business separate. One would register all business-related endeavors with the corporation (for me, that's the domain, but perhaps even a separate bank account and credit card/bitcoin wallet to use for advertising purposes).

 

I'm just trying to think of all the places where I need to use some kind of identity in order to further establish myself and I don't want to inadvertently expose my privacy. Although I should say, many of the privacy concerns raised during the webinar seemed to come from the fear of a disgruntled client/would-be client (or "punter"—I learned that today!) seeking to ruin their lives through snooping and exposure. Maybe there's less of that in the male escorting world?

[Bayman4Fun]

I counsel about this stuff in my work life.

 

Incorporating can protect your personal assets. Some forms of corps can also lighten your tax burden to some extent.

[Beancounter]

https://howtostartanllc.com/california-llc

 

I'm chuckling at the absurdity of this thread. While I applaud the OP for wanting to set up an appropriate business model for his illegal activities rest assured an LLC is not the answer. I invite all interested Forum members to click on the above thread and get a feel for what's involved.

 

The KISS principle is the best way to go.

[Electra225]

I've had a number of clients over the years, ask this question. Many facets of the answer(s) to your question focus on the state where you live (are domiciled). One idea may be to set up a sole proprietorship with a DBA ("Doing Business As") and set up a separate Taxpayer Identification Number (TIN) with associated banking accounts/relationships (checking account, savings account, credit card acceptance ability, business credit card account, etc.). This way, you can pay yourself a salary with deductions for income taxes, Social Security payments, and have a set of books showing expenses (travel, hotel, etc.) and income from clients (cash receipts--no names or other identifiers, but backed up with deposit slips or credit card receipts). Your best course of action, initially, is to consult with a business attorney whom you trust as well as a CPA in private practice that specializes in working with clients with small businesses (and someone you trust). Best of luck!!

[Kevin Slater]

Using a business account attached to your LLC, you can pay for work expenses and later write them off.

 

You do that as a sole-proprietor as well, so no need for an LLC there.

 

Kevin Slater

[Bayman4Fun]

I too would think that incorporating as an escort is overkill. There may be some special circumstances I'm not considering.

 

Asset protection concerns can probably be addressed by setting up a trust.

[Electra225]

One more thing: By having at least the appearance of a legitimate business, you have a plausible employment record that can be of great help when you retire from this particular industry and go into something else. The important thing is to build believability and plausibility with the world at large (tax records, Social Security records and payments, etc.). Taking the long view, this can be invaluable.

[+ sam.fitzpatrick]

For an individual worker situation, I would agree the operating as a sole proprietor would meet 99% of your needs. You can still set up a second bank account to keep your professional expenses separate from your personal expenses, and depending on your bank, it may even be possible to do it as either a business or personal account.

[+ Topseed]

No need to incorporate to protect financial assets. Instead, get an umbrella liability policy. The agent who handles your homeowner's or renter's insurance often can add an umbrella policy for a nominal amount.

[+ BenjaminNicholas]

As others have already said, an LLC makes little sense for us

 

You're better off continuing to minimize financial transactions that leave a glaring trail, as well as figuring out how much and in what way you want to remain square with the IRS.

[+ BenjaminNicholas]

No need to incorporate to protect financial assets. Instead, get an umbrella liability policy. The agent who handles your homeowner's or renter's insurance often can add an umbrella policy for a nominal amount.

 

Exactly. Umbrella policies and floaters are two very powerful tools to be used.

 

My policy has been to always err on the side of being overinsured vs under.

[+ MostlyLurking]

Incorporating is a means to an end. Ditto for forming an LLC or adopting any other structure other than just doing the work yourself. First ask yourself what you are trying to achieve. Then consult with a lawyer and/or a CPA to decide whether the structure you're thinking about will achieve what you want.

 

In the real world, I don't think incorporation offers significant protection against liability. (If professionals want to discuss this, I'd be interested to hear your POV, but somewhere else: let's not hijack this thread.) I incorporated my law practice because so I could adopt a very generous medical benefit plan and deduct 100% of my medical expenses.

[amused1]

I would suggest you be very careful in who you contact for advice. Some attorneys may say you need a corporate entity simply to get the billing for establishing it. Some CPAs may do the same as they see years of preparing a pricey tax return that may bring you no tax advantages.

[Kevin Slater]

I would suggest you be very careful in who you contact for advice. Some attorneys may say you need a corporate entity simply to get the billing for establishing it. Some CPAs may do the same as they see years of preparing a pricey tax return that may bring you no tax advantages.

 

Whereas I would just argue that everybody needs to get laid.

 

Kevin Slater

[amused1]

I (w)hole heatedly agree. Are you suggesting something good sir?

[+ Keith30309]

Whereas I would just argue that everybody needs to get laid.

 

Kevin Slater

http://image.dhgate.com/albu_173354168_00/1.0x0.jpg

[Jomo]

I disagree with many of the posters

I sell real estate for a living, along with owning 9 renal properties

My rental properties have been always held by an llc, to limit my liability. I filed taxes as a sole propritor. Last year I switched my real estate income to an llc, filing as an s corp. I saved 6k in federal tax s doing this. Just saying

I toLed this to my favorite escort, I don't think he believed me