Should My Food Truck Be in an LLC

Posted by Damian Roberti on May 20, 2022

Should My Food Truck Be in an LLC

Should my food truck be in an LLC? So on food truck freaks today on this podcast, which we will upload to our YouTube channel. We actually want to cover a question. We received on marketing food online, which is our other food entrepreneur channel here on YouTube. You should definitely check out the links down below. We've got a handful of different food trucks, entrepreneur channels, and food businesses, as well as an entrepreneur channel as well. So, so there are four specific types of ways that you can incorporate a business per se, but a food truck always works best if it's an LLC. And I'm going to explain the difference between the actual different types of ways that you can incorporate them. So definitely, if this is your first button, first button, but first video, hit the subscribe button to hell below. And of course, the bell notification. Check out all of our new videos here on Food Truck Freaks.

We are YouTube's premier food truck and entrepreneur channel, bringing you tons of resources to help you get a food truck up and running. So this is actually going to be about the different types of entities, as they're known as business entities. Food trucks work really best if it's an LLC. The reason being is that some people take on the idea that a sole proprietorship is very simple, very easy, less paperwork, and all that good stuff, but it sounds good. But in reality, when it comes to a food business, there's a lot of potential for you to get sued. If someone gets sick or ill, or if they have an allergic reaction to something and they don't have the proper information to know what was inside the food, if they've got an allergy of some sort, some sort. So when it comes to food trucks, sole proprietorships are actually the type of legal entity where if anything happens, it falls directly on the owner, the business owner itself, on your shoulder.

Should My Food Truck Be in an LLC

So if you were the one who had a sole proprietorship and you had a food truck, and there was someone that happened to sue you or happened to get reimbursed for hospital bills or anything of that sort due to some ailment or something that happened, sole proprietorship owners would actually absorb all of that as far as the lawsuit's concerned and any financial responsibilities that came along with it, the downside of what could potentially happen. Sole proprietorships are not always the best when it comes to food businesses, because there's a much higher chance of risk of someone getting sick or getting ill. And of course, food trucks have even more potential where you're driving around your business specifically on four wheels every day. And you can get into a car accident. You can have someone hit you. Any type of situation where even some of your equipment on the food truck could go wrong and your employees could get burnt or get hit by sole provider.

I would highly not recommend it. Of course, I'm not an attorney. I'm not going to give you legal advice. But I personally, as a food entrepreneur, myself, myself, I started out as an LLC. I never took that on board as far as being a sole proprietorship. And then now we've actually transitioned to 10 or 11 years later. So I formed an S Corp.So what is a C corp and an S corp? So C CORs and S-corps are much more involved types of tax filing. Number one, it becomes very intricate and very involved. It's more or less, if your business is going to grow to the point where you're gon na have stockholders, you've got multiple investors, you've got people with an interest vested in your business, C Corp and SCOR have a tendency to be a better direction for you.

Should My Food Truck Be in an LLC

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They're a little more complicated, as far as tax purposes, because I've actually now transitioned to an S Corp from an LLC. And for us, it was a benefit to do that for tax purposes based on the amount of money that we were making, the type of structure that we were prior to, and how our business was set up with a commercial kitchen and such. So when it comes to food trucks, if you're looking for a simpler, easier way to transition into the food truck industry in food truck business, but still have the legal protection of an entity status like an LLC, I would definitely say go with that. So the last one, LLC, or limited liability corporation, will provide you with that legal structure, acting as a barrier between you and your business.So if you ever happen to have any type of lawsuit or litigation, or if there's an accident with your food truck, or any of those things, your business entity itself, the LLC, will absorb all of that, meaning that, you know, Dian had a food truck.

I would create an LLC if someone were to hit my truck or I was the cause of an accident or something. They could sue the food truck business, but not me personally. So as a sole proprietorship, that's what separates the difference between an LLC and a sole proprietorship, which is just that it's the responsibility that will fall on your shoulders as a food truck owner. And you definitely don't want that to happen because it's just something that's unnecessary and unneeded. A lot of other businesses that don't sell food or don't have a, at a lower risk, if you will, if you're selling digital downloads or documents online for your website, and you want to be a sole provider, that's much different, but food trucks have their own types of potential problems that can arise, and so do food, the food industry, and food businesses in general.

Should My Food Truck Be in an LLC

So, in an LLC, is a much simpler way to form one. If you actually want to learn more about how to even form one or do one yourself, check down below the video in the description section. We have some links to a few websites where you can actually create an LLC for your food truck in a matter of 10 or 15 minutes. But be sure that you do that too, because a lot of times, states won't allow you to move forward with the process of licensing and permits and inspections from the health department and so on without having some type of business entity status. So that's like an LLC, or if you decide to go with a C corporate cor, that's your choice, but many of them won't let you move forward. Without that, of course, business licenses There are a lot of other types of licenses and permits that need to be purchased and received before you can move ahead with your food truck business.

So an LLC is going to be that limited liability company. It's very simple to form. And at the end of each year, when you file your documents and your IRS taxes, your accountant can make it much easier for you when you have an LLC, because it's a very, very simple documentation that takes place. And a lot of times, it's actually a pass through any type of income that you have. That's taxable. You can actually use it as a pass through by reading that you can just use your social security number, and that would tack on any income that you get. If you have any questions about LLCs and food trucks and what would be best for your D status, or if you've actually done this before, you can comment down below that that would help out any of our additional subscribers as well. And if you have to check out these additional videos, they're going to show you a little bit more about sole proprietorships and other legal documents and other perspectives to help you out. And I'll see you guys on our next podcast and our video.

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