New Instructor in need of guidance

[John Fernandez]

Back in June I registered for the CHL Instructors course. I have recently been advised that I will be in the upcoming class in Georgetown (Oct 17-21). I’m looking forward to this new endeavor and the challenges it brings. I have been instructing through TCLEOSE for a while and was looking for a different outlet of which to teach and learn. I am looking for any advice one might have as far as setting up this new business. This is something I plan to do on the side, weekends and occasional afternoons.
After reading through some previous posts I am more confused than ever. Do I need to form an LLC or is a DBA fine? What about Taxes? Should I get a tax number?
I hate to beat a dead horse, I know this topic has been discussed but I couldn’t find any definite answers. Any help and guidance with these issues will be greatly appreciated.

Thanks,
John

[Crossfire]

If you are only going to teach a few classes, and consider it a "hobby", then you do not need a DBA or sales tax permit. If you are going to do more than that, then, yes, for income tax purposes, I would say you should go ahead and do it.

Now, bear in mind, I am only a CHL instructor. You really need a tax accountant to advise you on your own personal situation.

[RoyGBiv]

I would NEVER, NEVER, NEVER, NEVER conduct any gun-related business without the protection of a corporate entity.
LLC or S-corp.... Excellent

NEVER "Me" DBA "insert company name here".

If there is a law suit for any reason (remember, anyone can sue for any reason, even though we have loser pays), your personal assets (house, car, savings, etc.) are exposed unless your business is a properly registered and maintained corporate entity. A simple "DBA" does not provide sufficient protection.
(There are many ways you can screw up and fail to maintain your corporate entity properly... but most of them are easily avoided... Google "piercing the corporate veil")

The minimal cost for setting up an LLC (IIRC, one time, $300, plus some extra paperwork [TX and Fed tax filings] every year) is way cheap insurance.

IMO, YMMV

[OldCannon]

I would NEVER, NEVER, NEVER, NEVER conduct any gun-related business without the protection of a corporate entity.
LLC or S-corp.... Excellent

NEVER "Me" DBA "insert company name here".

Make a business or, alternatively, join another LLC and conduct your work as part of that business. Either one, just don't fly solo without the coverage of a real corporate arrangement. It's not expensive and solves soooo many problems.

[hpcatx]

The minimal cost for setting up an LLC (IIRC, one time, $300, plus some extra paperwork [TX and Fed tax filings] every year) is way cheap insurance.

This is still the case... $300 to the State of Texas for filing fees and you can get Federal Tax ID (FEID) free of charge. It's actually quite easy to setup a basic LLC. You can do it yourself; here are some useful links:
Form 205 - for the Texas Secretary of State
Online EIN Application - for the Federal Tax ID
Hope this helps! Having a LLC alone won't protect you completely, but it will allow you to carry insurance coverage specifically for your corporate entity.

All of that being said, I would always recommend consulting an attorney or tax accountant if you have remaining questions/concerns or need a more complex corporate structure.

[John Fernandez]

I appreciate the help, looks like I need to establish an LLC and get a tax id. Once I get the LLC established should I still go to the county clerks office for a DBA or is that only if I dont want to do business as the LLC?

[hpcatx]

Once I get the LLC established should I still go to the county clerks office for a DBA or is that only if I dont want to do business as the LLC?

You only need to get the D/B/A if you want to operate under a different name than the LLC.

[RoyGBiv]

I appreciate the help, looks like I need to establish an LLC and get a tax id. Once I get the LLC established should I still go to the county clerks office for a DBA or is that only if I dont want to do business as the LLC?

You don't need a DBA if you have registered a company and want to use the company name for doing business...
A DBA is an "alias" or "AKA" (also known as). If you register a company name "JF CHL Training, LLC" and do business using that name... no DBA is needed.
If you want to start a side business, or some related business using the same LLC, but you want to use a different name, you can either register a new LLC or file a DBA for the other name.... "JF CHL Training, LLC, DBA Southpaw Shooters"... IIRC, you can have a dozen DBA's pointing to the same LLC as long as you file the proper paperwork. The DBA is useful for retaining trademarks, etc under the alternate name, and you'll need to have a DBA filed if you want to open a separate bank account for the DBA business.

You do need to make sure that any name you want to use is not currently registered in TX. If you pick a name that is already a popular brand, you can run into trademark issues, "Pepsi" is taken, for example.... "Target" too... But... JF CHL Training, DBA JF Target Training" is probably safe... I think it costs $1 or maybe $3 to do a trademark search on the SOS (secretary of state) web site.

If you still need help after reading the SOS web site, ask... It should be pretty simple as long as you're not trying to do anything too strange.
I didn't want to pay an attorney to set up the company for me, so, I muddled through myself. Wasn't too hard with some slow reading.

For me, the toughest thing was remembering to file state franchise taxes on the correct dates. The state uses some strange dates. Just in the past 2 years or so they've gotten better about sending out reminders in the mail... Unless you take in (gross) over $1M you generally don't have to pay any franchise tax (check with an accountant about your specific situation), but you do need to file the paperwork (TX Franchise tax and PIR [public information report]...you can do it online in about 10-15 minutes per year).

And then you need to decide about Uncle Sam..... If you are a single member LLC, you automatically (check with your accountant.. I'm not 100% sure) get taxed as a sub-S corporation.... If you are a multi member LLC, you can elect to be taxed as a sub-S corp.. meaning.. you pay no corporate taxes and al the earnings get passed to the LLC "members" (shareholders, generally) as income.... Once you choose an entity type (LLC for me) you should contact a good small business accountant who can advise you about how to best file federal taxes in your specific situation...... You do need to make some elections within 30 or 90 days (IIRC) from the date you get your Federal Tax ID... so... don't dally on that one... I can't give you an off the shelf recommendation because everyone has a different specific tax situation... Do some reading about it or pay a few bucks to an accountant to help you on that one... Don't mess with Uncle Sam... Once you get THIS part set up, the rest is easy IMO.

Have fun and good luck to you.

EDIT: Oh.. and don't forget to pay your estimated taxes to Uncle Sam each quarter. You would need to do this even if you did not register as a corporation. April 15th, June 15th (yes, JUNE, not July, I missed that one twice ), October 15th and January 15th (or the next business day if the 15th does not fall on a business day.).

[goheeled]

Exactly the information I was looking for. Thanks for sharing. LLC effort will commence this weekend!

[cabindoor]

I recently just used LegalZoom.com to set up my LLC. It's a bit pricey, but they took the "guesswork" out of setting up the LLC. I'm not trying to "plug" them in, but I knew squat when it came to what I needed to do to set up a company and it was worth the money to get it done right. I still don't know much, but at least I'm a tad bit smarter right now. LOL

[steven8669]

I used http://www.incfile.com" onclick="window.open(this.href);return false;, they were much cheaper than Legal Zoom. I think it was $30 plus state filing fee of $300. It took less than a week for everything to be done.