Trading as a Company or LLC with Tradeify: Business Entity Setup Guide

When I first started scaling my Tradeify accounts, I hit a point where trading as an individual didn't make sense anymore. Between multiple funded accounts, consistent payouts, and the growing complexity of taxes and liability, setting up an LLC became the obvious next step. But the process wasn't as straightforward as I expected—there were KYB requirements, documentation hurdles, and specific rules about how business entities interact with Tradeify's payout system.

This guide walks you through everything you need to know about trading Tradeify accounts through a company or LLC. We'll cover why you might want to do this, how to actually set it up, what documentation Tradeify requires, the tax implications, and the practical realities of managing funded accounts as a business entity.

Quick heads-up: This article is based on my real experience with Tradeify and the info available when I published/updated this. Things change in prop trading — rules, payouts, promos, all of it.

For the absolute latest, check Tradeify´s website or their help center.

Why Trade Tradeify Through an LLC or Company?

Trading through a business entity offers several advantages over trading as an individual, especially once you're running multiple funded accounts or pulling consistent payouts.

Tax Benefits and Deductions

Business Expense Deductions:When you operate as a business, you can deduct trading-related expenses that personal traders can't:

• Platform fees and data subscriptions
• Trading software (NinjaTrader, TradingView, indicators)
• Computer equipment and monitors
• Home office space
• Internet and utilities (proportional)
• Trading education and coaching
• Professional services (accountants, tax advisors)

Example from my operation:Before my LLC, I was paying for three Tradovate data subscriptions, a $200/month trading suite, and a home office setup out of after-tax income. After forming my LLC, all of these became deductible business expenses, saving me roughly $4,000/year in taxes.

Liability Protection

Asset Protection:An LLC creates a legal separation between your personal assets and your trading business. If something goes wrong—a lawsuit, a business debt, a contractual dispute—your personal home, savings, and other assets are generally protected.

For Tradeify traders specifically:While you're trading sim-funded capital (not your own money), having an LLC still matters if you're:

• Running a trading education business alongside your trading
• Managing multiple accounts that generate significant income
• Operating in a way that could create business liabilities

Professional Structure

Scaling and Partnerships:An LLC lets you bring in partners, allocate ownership shares, and create a professional business structure that can grow beyond just you trading alone.

Multiple Tradeify accounts under one entity:You can manage all your funded accounts under a single LLC, simplifying accounting, tax filing, and operational management. Instead of tracking 5 separate personal trading accounts, you have one business with 5 trading operations.

When It Makes Sense vs When It Doesn't

My recommendation: If you're consistently getting payouts from multiple Tradeify accounts and pulling $2,000+ per month, it's time to seriously consider an LLC.

Setting Up an LLC for Tradeify Trading

Setting up an LLC isn't complicated, but it requires following specific steps in the right order.

Step 1: Choose Your State

You can form your LLC in any U.S. state, but most traders form in their home state to avoid foreign qualification requirements.

Reality check: If you live and trade in California, forming an LLC in Wyoming doesn't exempt you from California taxes. You'll still owe California taxes on income earned while residing there.

Step 2: Choose Your Business Name

Your LLC name must:

• Include "LLC" or "Limited Liability Company"
• Be unique (not already taken in your state)
• Not include restricted words (Bank, Insurance, etc. without proper licensing)

Example names:

• "Smith Trading LLC"
• "Apex Futures Trading, LLC"
• "Futures Capital Management LLC"

Step 3: File Articles of Organization

This is the official formation document filed with your state's Secretary of State office.

Required information:

• LLC name
• Business address (can be home address)
• Registered agent name and address
• Management structure (member-managed or manager-managed)
• Organizer information

Cost: $50 - $500 depending on state (my Florida LLC cost $125)

Step 4: Get an EIN (Employer Identification Number)

Apply for an EIN through the IRS website (free). This is like a Social Security number for your business.

You'll need this for:

• Opening a business bank account
• Tradeify's KYB process
• Tax filing
• Hiring employees (if applicable)

How to get it: IRS.gov/EIN → Apply online → Takes 5 minutes

Step 5: Create an Operating Agreement

While not required in most states, an Operating Agreement defines how your LLC operates.

Key provisions:

• Ownership percentages
• Management structure
• Profit distribution rules
• Decision-making processes
• Member addition/removal procedures

For single-member LLCs: Still create one. It proves your LLC is a separate entity (important for liability protection).

Step 6: Open a Business Bank Account

Separate your business finances from personal finances. This is critical for both tax purposes and maintaining your LLC's liability protection.

What you'll need:

• EIN letter from IRS
• Articles of Organization
• Operating Agreement
• Personal ID

My setup: I use a free business checking account at a local bank. No monthly fees, simple interface, integrates with QuickBooks for tracking Tradeify payouts.

Registering Your LLC with Tradeify

Tradeify allows you to trade through a business entity, but there are specific steps and requirements.

Initial Account Setup

When creating your Tradeify account:You can register using either personal information or business information. Tradeify states: "You may create a Tradeify account using either personal or business information."

Important note from Tradeify:"Please note that the First Name and Last Name fields do not allow spaces or punctuation, so be sure to keep that in mind when registering."

For LLC registration, you might use:

• First Name: YourCompanyName
• Last Name: LLC

The KYB (Know Your Business) Process

When you're ready to receive payouts through your LLC, you'll go through KYB instead of the standard KYC (Know Your Customer) process.

When KYB is triggered:Once your payout request is approved, Tradeify sends you a link to complete the KYB process with their payment vendor (Rise/Plane).

KYB documentation required:

Critical detail: You need photo IDs for ALL owners with 25% or greater ownership. If you're a single-member LLC, that's just you. If you have partners, everyone with significant ownership must provide ID.

Setting Up the Business Account with Payment Vendor

After KYB approval:You'll create a business account with Tradeify's payment vendor. This is where your payouts are sent.

Account setup requirements:

• Business name (exactly as registered)
• EIN
• Business bank account for withdrawals
• Business address
• Ownership verification

Tax Considerations for LLC-Based Trading

Trading through an LLC changes your tax situation. Here's what you need to know.

Default Tax Treatment: Disregarded Entity

Single-Member LLC:By default, the IRS treats a single-member LLC as a "disregarded entity" for tax purposes. This means:

• You still file taxes on your personal return (Schedule C)
• LLC income/losses flow through to your personal tax return
• No separate business tax return required

Multi-Member LLC:By default, treated as a partnership. You file Form 1065 (partnership return) and each member receives a K-1 showing their share of income/loss.

Electing S-Corp Status

You can elect to have your LLC taxed as an S-Corporation by filing Form 2553 with the IRS.

Why you might do this:

• Potential self-employment tax savings (only salary is subject to SE tax, not distributions)
• Ability to take a reasonable salary + distributions
• More tax planning flexibility

When it makes sense:Generally when your net trading income exceeds $60,000 - $80,000 per year. Below that, the administrative burden (payroll, additional accounting costs) may not be worth the tax savings.

Deductible Business Expenses

Note on Tradeify commissions: Since you're trading Tradeify's capital (not your own), the commission fees you pay are business expenses deductible against your payout income.

Trader Tax Status (TTS)

If you qualify, you can claim Trader Tax Status, which provides additional benefits:

IRS TTS criteria:

• Substantial trading activity (750+ trades per year is a common benchmark)
• Trading is your business, not investments
• You seek to profit from short-term market movements, not long-term appreciation

TTS benefits:

• Deduct trading expenses without itemizing
• Exempt from wash sale rules (if you also elect Mark-to-Market accounting)
• Business expense treatment for all trading costs

For Tradeify traders: Qualifying for TTS can be tricky because you're trading the firm's capital, not your own. Consult with a trading tax specialist (like Green Trader Tax or Trader's Accounting) to determine if you qualify based on your specific situation.

Combining Personal and Business Accounts

Tradeify allows a combination of personal and business accounts, but they count toward the same limits.

From Tradeify's rules:"You may have a combination of personal and business accounts, but the total number of Sim Funded accounts across these cannot exceed 5."

Example scenarios:

Strategic consideration: If you're scaling to Elite Live status, consider moving all accounts under your LLC for simplified tax reporting and operational management.

Practical Workflow: Managing Tradeify Accounts Through Your LLC

Here's how I actually run my Tradeify accounts through my LLC on a day-to-day basis.

Account Structure

My setup:

• LLC owns 3 funded Tradeify accounts (all under LLC registration)
• All payouts go to LLC's business account with Rise
• LLC bank account receives transfers from Rise
• I pay myself a distribution from LLC to personal account

Bookkeeping and Accounting

Monthly process:

1. Track all Tradeify payouts as LLC income
2. Record trading commission fees as business expenses
3. Record platform subscriptions (Tradovate data, NinjaTrader, etc.) as expenses
4. Calculate net profit
5. Document everything in QuickBooks or similar software

Quarterly:

• Review profit/loss
• Make estimated tax payments (if required)
• Adjust strategies based on profitability

Annually:

• File LLC tax return (or pass-through to personal if single-member LLC)
• Maximize deductions (equipment, home office, education, etc.)
• Work with CPA specializing in trading taxes

Separating Personal and Business

Critical practices:

• Use LLC bank account exclusively for business transactions
• Never commingle personal and business funds
• Document ALL business expenses properly
• Keep receipts and records organized

Why this matters: If you ever face an audit or legal challenge, clear separation between personal and business finances is essential to maintain your LLC's liability protection.

Common Mistakes to Avoid

Mistake #1: Forming an LLC Without Understanding Tax Implications

Forming an LLC doesn't automatically save you taxes. You need a strategy—deductible expenses, proper tax elections, and professional guidance.

Fix: Consult with a CPA who specializes in trading taxes BEFORE forming your LLC, not after.

Mistake #2: Commingling Personal and Business Funds

Using your business account for personal expenses or vice versa destroys the legal separation your LLC provides.

Fix: Strict separation. Business expenses through LLC account. Personal expenses through personal account. Period.

Mistake #3: Not Keeping Proper Records

"I think I spent about $2,000 on trading stuff last year" doesn't work at tax time.

Fix: Track every business expense in real-time using accounting software. Save receipts digitally.

Mistake #4: Forgetting Annual State Filings

Most states require annual reports or franchise tax filings for LLCs. Miss these and your LLC can be dissolved.

Fix: Set calendar reminders for your state's annual filing deadline (usually with renewal fees of $50-$300).

Mistake #5: Overcomplicating Early

If you're making $500/month from one Tradeify account, you probably don't need an S-Corp election and a full-time bookkeeper.

Fix: Start simple (single-member LLC), scale complexity as income grows.

FAQ

Q: Can I trade Tradeify accounts through my existing business (not trading-related)?Yes, but it may complicate your taxes if your business has other income sources. Many traders create a separate LLC specifically for trading to keep finances clean.

Q: Do I need a separate LLC for each Tradeify account?No. One LLC can hold multiple funded accounts. This is actually simpler—all your trading activity is consolidated under one business entity.

Q: Will forming an LLC affect my ability to get funded on Tradeify?No. Tradeify treats personal and business accounts the same during evaluation. The LLC only matters at payout time when you complete KYB.

Q: Can I convert my existing personal Tradeify accounts to my LLC?Not directly. You would need to contact Tradeify support and go through their KYB process to transition payouts to your business entity. The accounts themselves remain the same, but payouts would be issued to the LLC.

Q: How much does it cost to maintain an LLC annually?Varies by state. Most states charge $50-$500/year for annual reports or franchise taxes. Add accounting costs ($500-$2,000/year depending on complexity) and any professional services.

Q: If I have multiple members in my LLC, can we all trade the Tradeify accounts?Technically yes, but Tradeify's rules prohibit multiple people trading the same account. Each member would need their own funded accounts, all owned by the LLC. This gets complex quickly and requires clear operating agreement terms.

Q: Does trading through an LLC exempt me from Tradeify's consistency rule?No. Tradeify's trading rules apply regardless of whether you're trading as an individual or a business entity.

Q: Can I use my LLC to trade multiple prop firms (not just Tradeify)?Absolutely. Many traders form an LLC and use it to manage funded accounts across multiple prop firms—Tradeify, TopstepTrader, Apex, etc. This simplifies tax reporting when you're pulling income from multiple sources.

Q: What if I'm in a non-U.S. country—can I still trade Tradeify through a business entity?Yes, but you'll need a business entity registered in your country. Tradeify's KYB process will vary depending on your jurisdiction. Contact Tradeify support for specific requirements for international business accounts.

Conclusion

Trading Tradeify accounts through an LLC isn't necessary for everyone, but once you're consistently profitable, scaling to multiple accounts, and pulling regular payouts, it becomes the logical next step. The tax benefits alone can save you thousands per year, and the liability protection and professional structure set you up for long-term success.

I formed my LLC after my third Tradeify payout, and it's been one of the best decisions I made for my trading business. Yes, there's more administrative work—annual filings, separate bookkeeping, KYB documentation—but the benefits far outweigh the hassles.

If you're making $25K+ per year from Tradeify or managing multiple funded accounts, talk to a trading tax specialist and consider forming an LLC. Your future self will thank you when tax season rolls around.

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