Can we be Sole Proprietor?

(Adam Dunin) #1

So I know since we are Licensed Professionals we need to technically register as PLLCs via the State. However, are we able to register as Sole Proprietorship?

(Nolan Kienitz) #2

Where does it say that you, we, me have to register with the State of Texas as a PLLC?

I might have missed something … I’ve only been inspecting now a bit over 16 years.

(Adam Dunin) #3

I legit cannot ever get a definite answer. Since we are licensed by the state I have been told that we need to be a PLLC. This sounds wrong?

(Adam Dunin) #4

check this post;

https://www.nachi.org/forum/1537862-post5.html

(Adam Dunin) #5

Found this from Secretary of State;

Search for Inspector. It says that it cannot be LLC

(Stephen W. Stanczyk, WA License #221) #6

Well of course you would get that info from the Secretary of State. They deal with corporations and those are the type of corporations you can use for real estate inspectors.

If you own 100% of your business, you can register as a sole proprietor and don’t deal with the SoS.

Prime reason number 1 why you should have an accountant to help set up a professional business.

(Adam Dunin) #7

Do you think that applies to Texas too?

(Stephen W. Stanczyk, WA License #221) #8

Lesson 1. Google “sole proprietor in Texas”.

(Adam Dunin) #9

Ok so basically zero help from you LOL.

(Stephen W. Stanczyk, WA License #221) #10

Maybe if you could read you would see the answer in my first post. Looks more like you will be one of the hobby inspectors that sets up their business on the cheap by asking questions on message boards.

(Chuck Evans, CMI TREC 7657) #11

You should be getting advice from your tax accountant.

That said, you are not supposed to be eligible to set up your home inspection business as an LLC in TX. It should be a PLLC. Though there are inspector LLCs out there, you should set up as a PLLC. The state will reject your LLC application if they catch it.

There is nothing that I’m aware of, other than perhaps good sense, that prevents you from operating as a sole proprietor with or without an assumed name.

(Adam Dunin) #12

Finally someone with a brain! Thanks for the answer. And yes I should get advice from a tax accountant but this is a Texas based board so someone who else started their own can provide details on what they found out and what path they took. Nothing wrong with asking questions. It is a forum. Thanks again

(Adam Dunin) #13

Thanks again buddy

(Brandon Feltner, TREC #22952) #14

Yes you can be a sole proprietor. If you do not have many assets to protect (most young people starting out) & won’t be making a lot of income right away (most new inspectors) sole proprietor is probably the easiest route. The fact that you have a professional license has nothing to do with how you have to structure your business except for if you choose llc, which then pllc applies as Chuck mentioned. I set up an llc (which had to be a pllc of course) for it’s liability protection. Honestly, it is easy to do & a 1 time fee of $300. You do have to do some extra work & conduct yourself/business accordingly for that protection to stand in court if ever needed. llc/pllc is more about you limiting liability & protecting your personal assets but your taxation/accounting needs are also a consideration, especially as your business & income grows.
Lots of YouTube videos explaining all of this. It’s pretty helpful.

(Brandon Feltner, TREC #22952) #15

By the way…pllc was created to be exactly like an llc with 1 exception. The exception is that a licensed professional cannot limit their personal liability to just the company in the event of malpractice.
Watch this guy> https://www.youtube.com/watch?v=9cs7txMy290)

(Adam Dunin) #16

[quote=“bfeltner, post:15, topic:127157”]

By the way…pllc was created to be exactly like an llc with 1 exception. The exception is that a licensed professional cannot limit their personal liability to just the company in the event of malpractice.
Watch this guy> https://www.youtube.com/watch?v=

Thanks Brandon. HUGE help!

(Roy D. Cooke, Sr) #17

I would recommend you site down with an Chartered account pay him his fee and listen close to what he says .
You need some expert advice and it could save you much money and help you avoid a mistake .
We used the same CA for 40 years and he saved us much money and avoided many errors .

(Bruce Thompson, TREC# 9199) #18

Interesting. I’ve had an LLC now for 13 years. The state never said a word when I filed it. Of course, it is worthless as far as protection from being sued personally for something I may or may have not missed. And the federal government at tax time, doesn’t recognize LLC’s, so I have to file sole proprietor.

If I were you, I would remain a sole proprietor and leave it at that. There are advantages of forming a corporation, but not enough for me to warrant the extra taxes.