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Do I need to form an LLC? And nutritional labels

This topic contains 8 replies, has 3 voices, and was last updated by  Barbara 5 years, 1 month ago.

Viewing 9 posts - 1 through 9 (of 9 total)
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  • #5698 Reply

    Angela
    Participant

    Hi David/Everyone,

    Thank you for posting the information on insurance and the Flip program. For someone who is just starting out and risk adverse, should I look into forming an LLC or some other legal set up? What do most new cottage food makers do?

    Also David do you have any favorite resources for nutritional labels?

    Thanks,
    Angela

    #5702 Reply

    Jenny

    I formed an LLC since I’m targeting people with severe food allergies and wanted to make sure I’m protected, even though I’ve gone to great pains to make sure all of my ingredients are made in plants that are entirely free of the allergens I avoid (peanuts, tree nuts). I’m also incorporated for the same reason (although the annual State tax is $800). I also recently decided to have nutritional testing done on my granola bars before I approach local grocery stores (since most people will want nutritional information for granola bars). I’m using NutriData in Aliso Viejo. It’s very pricey to get a Nutritional Facts Panel, so think carefully about this decision! Happy to expand on any of this information…I’ve learned a lot in the past few years since I started my business!

    #5714 Reply

    Angela
    Participant

    Thanks for the info Jenny. I recently came across a site called ReciPal that has really affordable nutritional labeling. In case you haven’t heard of it, it may be worth checking out.

    #5741 Reply

    David Crabill
    Keymaster

    Angela, as Jenny noted, I think you really need to know your market before committing to a corporation structure. She has very good and specific reasons for choosing it. The $800 franchise tax has been a big wake up call for some CFOs that over anticipated their success, later realizing that they didn’t really need an LLC. My personal recommendation is that except for some specific cases, it’s not necessary. The insurance does cover you for most things, and a lot of people are not aware that an LLC doesn’t completely protect their personal assets anyway, even though it does help. A big company needs to be much more concerned with getting sued.

    In terms of nutrition facts resources, I don’t know of any, but I do know that most CFOs prefer to not include it. It makes everything a lot simpler, and most customers don’t need it anyway. I will say that there is a difference between a legitimate nutrition analysis and a lot of the nutrition facts calculators online. It’s not really an authentic panel if the product is not lab tested, and that does cost a significant amount of money unless it’s subsidized by the govt.

    #5799 Reply

    Angela

    OK that makes a lot of sense on the LLC front and frankly I’m glad to hear that advice.

    Silly question but if the nutrition calculators exist and you can have labels made are they really even legal to use if a lab is the only authentic way to test your product?

    #5816 Reply

    David Crabill
    Keymaster

    I’m not sure if they would be legal, though I’d like to know the answer to that question. My guess is that they are not, because everyone I know that is required to put nutrition info on their label has sent a sample into a lab. The calculators are still pretty accurate and are good for quickly determining the approximate nutrition facts for a recipe.

    #6952 Reply

    Samanatha Ames

    Can CFO’s be partnership or do they have to be sole proprietorships? My partner and I are starting up a mustard business and are wondering whether or not we can proceed as under one name or as partners as we pursue a CFO Class A permit. Also, do the requirements change for a Class B permit?

    Thanks!
    Sam

    #7013 Reply

    David Crabill
    Keymaster

    You can run it as a partnership, but each business has the $45,000 sales restriction, so that’d be $22,500 of sales (not profit) max per person.

    The requirements don’t change much for Class B. You need to get an inspection so you can sell to stores and restaurants, and you can only do those indirect sales within your county, unless another county has an agreement with yours.

    #13577 Reply

    Barbara
    Participant

    At least in San Diego and Orange County, you can use online calculators or laboratory testing for determining your nutritional value if you’d like to include a label. We’ve found there are easy to make/print nutritional labels at http://www.onlinelabels.com

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