I’m curious whether those of you who do freelance work do so under your given name or a separate business name?
How did you come to that decision? I’m starting a freelance web design business and I’m debating which is the best course of action.
Here in New York City I have a sole proprietorship using my name, but I also registered a Doing Business As business name (DBA) with the city for my business’s name. I see you’ve got a Canadian flag icon next to your name, so you probably won’t have the same tax implications to deal with.
Short answer: I use a company name, although I am legally able to use my own name as well.
But if you’re a one-person freelancer and want people to remember your name you might want to use your name (and use a related, named domain for your email).
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From a US perspective (I can’t speak on Canadian taxation), it depends on whether you want to pay extra taxes or not, which you will with only registering your business. Registering a business, even an LLC, doesn’t give you any tax advantages. All it does is prevent anyone else from registering a business using the exact same name in your state. If you want to make sure you get the best possible tax treatment, talk with a tax professional.
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I’m Canadian. I have a company name (which I think I’m going to change within 12 months). People don’t care about your business name, they care about your name and what you can do for them.
If I were you, I would start up a company (it can be your name design or something like that) and get a company bank account (most banks allow you to accept checks in your company name and your name).
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Here are two podcast episodes that might help you:
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I guess it depends on two things. One, what do you want to brand. Two, if you eventually want to create a business that you either sell or have others takeover and run it for you. IMHO I see little value in using your own name unless you are some type of celebrity or influencer status or creating some type of artistic work like artists, photographers, designers.
I always like to look at at business venture with an exit strategy and what is the end game and if that business should fail for what ever reason ( I had a few) it is better treating it as an investment in your education and not have your name be associated with a failure and you are free to move on learn from whatever mistakes that were made and ready to start the new fight again.
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I’ve been a freelancer for almost 15 years. Contrary to other opinion, I’ve found considerable tax and other economic benefits to forming my own company and trade name. Speak to your advisor. I also found that no one carries diddly about my trade name. They hire me because of my reputation and the network of customers I have built over the years. As @D_Rehak points out, unless your name is already a widely recognized brand, what you call your business means little.
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What blocking you the most right now? Choosing a name or choosing the legal footing for your business?
When I became a freelancer, I chose to form a LLC because I wanted my business to be a separate entity that would not interact with my specific tax situation in Luxembourg (I’m married with 2 kids).
Then for the business name, I could have chosen to be known as « Damien Schreurs LLC » but I decided to go with a different name and keep Damien Schreurs for my personal brand, untied to anything specific.
In your case, go talk to someone at a local chamber of commerce or a tax specialist because they can help you better based on your specific situation.
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That’s a good point about the exit strategy and a factor that I had not considered before.
Under a business name. We’re in teh US and tax implications are different but… Currently we’re running 2 separate businesses as individual 1 person LLCs. That works for the farm and then for the computer consulting stuff where we don’t expect either business to survive us nor will we sell them to someone else.
IMO an LLC structure falls apart as soon as there is more than one member. I got burned by a poorly constructed LLC agreement that made it impossible to make changes to business operations without 100% agreement. I was dealing with a group of members who could not read a balance sheet and ignored the basics of pricing service for profit. So for me if I’m ever again in a business that has more than one owner/stockholder or that I expect to survive my lifespan I will make sure it’s a full up Corporation in spite of some tax issues. The additional minimum corporate tax and the “double taxation” of corporate profits and wages is worth it for the advantages of being able to sell stock, set up employee ownership programs and how the management structure is defined.
I have no idea how being in Canada affects all of that.
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@OogieM Yes, I see two different distinct issues being discussed here. One what to name the business …Your Name or Trade Name . and the other what business structure that is being set up which has unique tax and accounting requirements.
Now I am of the mindset/opinion that the best business structure to use is to set-up an entity that suits your specific financial requirements and use JV agreements to put together deals such as revenue share or partners where the JV agreement specifies everything and should that venture not work out you can dissolve the JV without affecting your base company structure. Conversely, if the JV proves to be a big success it can be spun off or sold. This type of structure would work with an LLC whereas the LLC can be a party in the JV without taking in partners/members into your LLC.
The best advice I can suggest is that you engage with an accountant/CPA type to review the best structure to use to maximize profits then setup the business structure legally as recommended by the financial advisor.
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Agreed, 2 issues. One is name. I do not want my name on any company that I start but that is me. I’ve found companies more willing to hire me as a consultant when I was than when it was just me. Plus if you do grow beyond one person it can ge ackward in that in between fphase from when you are Edward Jones single person to Edward Jones multimillion dollar company 
On the structure, not only should you talk to an accountant but also a lawyer or 2 and your own financial advisers. In our case a lawyer who specializes in estate law plus one that focuses on business are important because they specialize in different areas. Likewise while our accontant is helpful, the financial adviser that works with us on the total financial plan including all investments has insights the accountant doesn’t. Our current structures are set up after consulting with all 4 major advisors.
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This—establishing a C corporation—is probably overkill (but of course it depends on your situation). A multimember LLC defaults to a partnership, which has several advantages and, as you learned, some possible disadvantages if things go sour. An attorney can help you and your partners establish a solid partnership agreement. Regardless of the number of members though, there is an option between sole-proprietorship/partnership and C corporation called an S corporation. Again, I’d recommend talking with a tax professional.
Exactly. It’s worth it for one person in certain circumstances - like paying yourself “reasonable compensation” and avoiding double dividend taxation (where the corporation’s average federal income tax rate is far below the current marginal federal rates that typically apply at the shareholder-employee level). This is all US-based tax-geekery, however, and not a recommendation for anyone, not least because the filings needed to comply can be onerous for an individual.
Agreed, but in my case, I’m coming from a long history of employee owned companies and ones with different classes of stock both of which are not possible under the Subchapter S structure.
Also, some businesses with significant licensing requirements (anything that sells or manufactures liquor or any other controlled substance) or significant federal paperwork (sheep farms that export to Canada or collect semen or embryos for export) cannot change the structure or name of their business without going through the entire process of getting approved/licensed again. For us to get approved to sell sheep to Canada would take 7 years if we change our business structure or name.
Liquor businesses require a full new application and you are forbidden from selling or manufacturing liquor during the application process. I have no idea what’s involved in the CBD or marijuana businesses (Colorado has legalized it) but I am sure that they are also rather specific about what is and is not allowed given the risk of money laundering.
Without a skilled team of preofessionals in your location and a really good idea of everything you amy wish to go into later you can’t really make an informed choice about such fundamental business practices.
As I said in my personal case with a single owner an LLC made sense but when we contemplated multiple owners all of our advisors looked at and rejected the S Corp or LLC structures and said go for the C corp.
I sugest that the original poster really evaluate the long term projections for their business and not take the first easy option without really evaluating all the others. There can be future considerations that are significant.
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Hah, that is a complex business situation!