Technically Vs. Actually

One of the previous writing’s homeworks (which you’ll get to see completely if you become a paid subscriber!) was to register your business. Hopefully you checked out how to do that, and let me give you my experience in registering my business because there’s a specific mistake I want you to not make.

Registering as a business means getting your “business identity” registered with the government and getting an EIN. The way I was advised to do it was go through something like legalzoom.com and I think that’s still reasonably good advice. How do you pick between an LLC and a sole proprietor, or a S-corp or something like that? I think that question isn’t necessarily the best question I can answer, but I can give you my experience.

I’m a one person business and I don’t hire other people for my company. When I work with other people I hire them as a freelancer. Because I don’t see this situation changing for a long time I’m fine as a sole proprietor and I’ve never really had a problem with being one. So if you want to model your business after mine, I’d say sole proprietor is perfectly okay.

But there’s something you should know about me: I’m fairly carefree when it comes to protecting myself from legal liability. If someone wants to start a dispute with me I’m sort of… fine just letting them win.

Throughout my career I’ve met a lot of people who think differently from me and you might be one of those people and want to make sure you’re covered for protection against disputes and liabilities. In that case I think being an LLC or some other entity gives you more options.

I didn’t talk yet about the mistake I made. So basically in my college days or something adjacent to my college days, my family was considering doing something in America and they wanted to use me as a proxy since they were physically located in Korea. As a result I got an EIN at that time and I completely forgot about it.

LegalZoom is great at submitting documents, but they’re not that excellent in telling you why something is going through a hiccup when something goes wrong. I spent quite a long time trying to figure out why my EIN wasn’t coming through when my sole proprietorship was already filled out. This was a problem because I wanted to get paid through digital platforms but I couldn’t without an EIN! ← We’ll talk about this.

I found out through some means I don’t even remember anymore because it was such an obscure event that happened. I think I called someone to verify. Anyhow, the lesson here is: 1) things ideally shouldn’t take too long for this kind of stuff, and 2) you might already have an EIN without you knowing about it.

If you’ve done all of this, congratulations! Now you have a business. Then what? It’s a big milestone but you’ll find that it doesn’t really mean anything unless you do something with it. So up until now we discussed the “technical” part of starting a business, and now we talk about the “actual” part of starting a business.