LLC Structure for a single-member RIA
I'm planning to set up my own RIA in TX with no other partners. It will be just myself running the show. Any advice on how I should set up the LLC? Should it be a single-member LLC taxed as a sole proprietor (disregarded entity)? Or should I set up the LLC and elect S-Corp filing? I know there are a bunch of "one-man show" RIAs out there... please advise on how you've set up your biz entity. Many thanks!
PS-- I am married, and theorectically could put my wife down as a member as well, but if that's the case.. wouldn't I have to disclose her name on RIA registration, Form ADV, etc.? I don't want her name associated with my business in anyway.
I’m not an attorney. It’s probably best to check with one just to be sure as you are setting up a legal entity but here are my thoughts:
Roll with the single member LLC. It’s a pass through entity so the income of the business will flow down to your personal income. I’ve operated my RIA as a single member LLC for 8 years and it’s proven to be the great structure.
As for listing your wife as a member you should try to avoid that unless she’ll be active in the business.
If the cost in your state is the same or comparable, I’d just go with the LLC. I started out going as a sole prop and heard back from folks at the state saying I would be much better off with an LLC structure. (this was from the department of financial institutions, the agency in charge of approving my RIA)