So I've been selling my DIY juice to friends and they have started taking orders for their friends. I give my friend the fulfilled order and he pays for them all. It's nothing big, maybe a handful of people but I've seen others talk about forming an LLC incase anything were to happen. I have no experience with LLCs and am not sure I need one as it's just a small thing I do for my friends who enjoy the juice I make at better prices than "premium" juices from our local B&M. My friend's friends I don't personally know and don't interact with so I'm not sure what I should do if I do need to do anything at all. Anyone with experience with LLCs and the likes have any advice? Thanks guys!
If you get your LLC, you are now officially a company. Say goodbye to your under the table cash sales. You now have to pay tax. Been flying under the radar of your state's ecig manufacturing laws? Not anymore.
If you're forming a real business, then yes. Form an LLC. If you're just selling bootleg juice for extra pocket change, don't bother.
Assuming you have a conscience and are not selling crap product, without question, you must form an LLC. It will protect your non-business assets (cash, house, car, etc) in case a 'friend-of-a-friend' is a d-bag and sues you for any (ridiculous?) reason. If you figured out how to mix by weight then you can easily figure out how to get LLC status for your company. When I got my LLC in 2005 (FL) it was only $50.
This is what I'm curious about though. He's going through his friend. He gives the juice to his friend, and then his friend gives him the cash, and then the friend distributes the juice. So, OP isn't exchanging juice for cash from these people, his friend is. How would he still be liable? Even though he made the juice, wouldn't his friend be liable?
Like, if I buy a civic off the lot new and it breaks down immediately, I take it up with honda. If I buy the car used from someone off craigslist and it breaks down immediately, I take it up with the guy I bought it from, not honda.
Once he gives his friend the juice and his friend gives him the cash, the transaction is complete and now the juice is his friends property and responsibility. If his friend poisons the juice, how is OP liable if he already "sold" it to his friend because cash and goods were exchanged.
It's kinda like gun manufacturers... They sell to federally licensed firearm dealers. If someone buys a gun from the dealer and commits murder with the gun, the victim's family sues the dealer and the manufacturer. Granted, the manufacturer is now protected by law in this scenario, but the court costs to deal with that type of suit are far, far greater than forming an LLC. Plus, you may have a judge that doesn't see the connection between the two scenarios, and then you're really fucked.
But isn't that because firearms are regulated and whatnot? So then what's the difference between the family suing the gun manufacturer, but I'll use the car example again, if I crash my accord into someone, they don't sue honda, they sue me/my insurance.
/u/drmclovens helped me out a bit with this aspect.
Agreed. He posted a very helpful reply to a very similar question a week or so ago. An LLC is easy to get. Also, IIRC, getting an LLC gets you a Tax ID #.
Yup and that EIN helps in a lot of places. LLC's also make it a lot easier come tax time than having a full fledged title S or C corporation.
One question I have is that if I already have an existing LLC could I potentially use that one for a small time eJuice biz and if I could... could I also write off the $1000+ worth of flavorings I bought this year?
As most people have said only form an LLC if you actually plan on selling to strangers and weird people online. If just to your friends and friends of friends then I would not be worried,
If you do form an LLC it's a simple process usually but it depends on your state so the best thing to do is google LLC and your state to see what their requirements are.
So general consensus seems to be, if just for pocket change to friends, no real need. If I were to expand my customer base to where it's no longer pocket change and is now actual profit (like not just beer money) then file for one. Another question, if I am filing for an LLC and am a business I have to follow all of my state laws as well which means here in NJ that I can't sell to anyone under 19 since I have to treat it like tobacco right?