I've been wanting to start a business for a while but I'm still bouncing between a few ideas (consulting, an online store, maybe a food truck). I keep reading that forming an LLC early "protects" you and makes things official. Is it dumb to go ahead and file now, or should I wait until I actually know what I'm doing? I have about $700 set aside for fees if that matters.
LLC Setup
Forming an LLC before deciding exactly what the business will do
You can file with a super generic purpose clause in most states. "Any lawful business activity" covers a lot. So yes, you *can* form one now. The real question is why you'd want to pay annual fees and file taxes for something that isn't doing anything yet.
LLC = lawyer's favorite upsell for peopLe who haven't picked a business yet. Do the LLC when you have customers or a lease. Until then it's a $700 hobby.
Depends on the state. Some have crazy high annual franchise taxes or minimum fees. If you tell us where you are, people can give you aactual numbers. Also some states let you file as a "series LLC" or with a delayed effective date but that's more niche.
Forming first isn't dumb if you want to name-protect the business name. Check the trademark/sos database before you fall in love with a name. But an LLC doesn't give yyou federal trademark rights on its own.
i'm in Colorado, so the filing fee is like $50 online and then a $25 annual report. That's why I figured it's cheap enough to just do. My main worry is looking like an idiot with an "LLC" that never actually does anything.
Nobody cares. People form LLCs for real estate, side hustles, even just to hold a truck. The annual report is the only thing to remember. Just don't forget it or you get hit with a late fee and eventually dissolution.
Also worth noting a food truck and an online sore are wildly different risk profiles. Mixing them under one LLC is just going to make bookkeeping a mess later. Pick one lane before you start tossing liability into the same bucket.
Honestly if it's 50 bucks and you don't mind the small annual fee, just do it. The worst case is you dissolve it in a year. The best case is you stop overthinking and actually start the thing