Forming a one-person LLC while on UI benefit in CA...will it affect me?

Question

I'm currently on UI benefit in CA -- every other week when I receive a claim form, it ask, "Did you work while you pay or not?" I usually put no since I don't have a W2 or consultant job to report to. I am trying to make money as an affiliate marketing in hopes of receiving commission checks at this point.

I worked in the technology field, and I see all these job postings wanting candidates to think like an entrepreneur -- well, in order to make my resume look "active" and boost my chance of earning extra income while also boosting my chance to be employ, I want to form an LLC for my Internet business.

I may not even make more than $200 a week (but I do get $366 on UI)...so will the formation of my sole member LLC effect my UI status? Once I make lots of money from my Internet Business, I can then stop filing out my claim form, right?

Answer 1

Yes becoming a LLC will affect your UI status. The state has access to all your records by the way LLC, unemployment etc. You can't hide anything. I would say yes, I received pay if you did, and what usually happens is that your pay is deducted from your UI check. The state will know you earned money when you report your money on your state taxes next year, which if you earn over $600 per year, you will have to do.



If you haven't been paid any money yet, I wouldn't report it. Why are you jumping the gun? Wait until you are earning a good wage before you form an LLC.

Answer 2

Hi James,



If you take a distribution out of the single-member limited liability company (LLC), then you would need to report that as income for the week. If you keep the profits in the LLC until you are off UI, then you do not have to report it as income.



Incidentally, you should be able to save quite a bit of money setting up and running your LLC if you form it in New Mexico. California has an $800 LLC franchise tax that must be paid each year whether you make money or not. As I understand it, the tax for the first year has to be paid up front when you create the LLC. That is in addition to the other fees and expenses required for setting up your California LLC.



I create LLCs in New Mexico for people who live in all 50 states and in many parts of the world. Why NM? Because LLCs in NM are low-cost, low-maintenance and private.



There is a low one-time fee paid to the state to organize the LLC. After that, there are no annual fees paid to the state and there are no annual reports to file with the state.



Yes, you can be in California or in any other state and own and operate a New Mexico LLC. You don't have to form an LLC in your own state. (This is a little known secret that smart businesspeople have taken advantage of for years.)



If I can be helpful, email me: [e-mail] or visit our website: http://Bumby-Brook.com



Good luck with your new business!



Thanks,

David at Bumby Brook LLC

Answer 3

UI is only interested in the wages you actually make; not what you could make, not what you will make, but what you do make. Those wages you have to report. You can start your own LLC (or even just a DBA). If you make $$, then report it (or don't claim the week you received the $$, defer it to the end) and you won't be breaking any of the rules.

Answer 4

I presume you making plans on getting a private loan for this purchase? if so, that's no longer likely you will get a private loan together as being on UI. you ought to coach which you have a stable employment history. if your nonetheless bent on determining to purchase a house together as on UI, think approximately to cajole somebody else (with stable employment) to purchase the residing house with you.