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View Full Version : What to do? So confused.. LLC, INC, C-Corp?


Josh.S
10-04-2006, 12:29 AM
I need some advice for how I need to setup my businesss for next year.. I know there is probably a thousand threads on here about LCC, INC and stuff like that but the more I read, the more confused I get.

I am NOT interested in real estate, at least not at this time.

I am a one man show, with a buddy of mine that helps aroud once per week.

I do NOT want to pay workers comp. Supposably if you have less than 3 employees you are not legally required to do so in Ohio? Another confusing problem in itself.

Next year I will gross well under $50k

I basically don't want to flip a rock up and hit some kid in the face and lose everything over it if at all possible to avoid this risk.

Also what is the deal about paying yourself?? How do you make a payroll that taxes come out of ?

I'm sorry to repost a thread with such a broad area of questions, and they have all already been discussed, but the more I read the more you guys confuse me, I have no idea what to do.

Josh.S
10-04-2006, 09:49 AM
If you guys have any questions about my business just ask me, I don't know how I should do it next year.

Also, I may be interested in purchasing apartments or a triplex next year, is there a way if I set up a Corp to purchase these without paying taxes on the money I buy them with?

rodfather
10-04-2006, 05:26 PM
I was confused years ago as well. Spent an hour with my attorney and that was that...went the LLC route.

BSDeality
10-04-2006, 05:52 PM
I was confused years ago as well. Spent an hour with my attorney and that was that...went the LLC route.Ditto, sit down with a business attorney, explain your situation, what you plan to do, yada yada yada. He will be able to guide you and set you up for maximum legal protection in your state.

Personally, I went LLC also, but there may be a better option in Ohio.

rutwad
10-04-2006, 05:55 PM
For the simplicity of it, what's wrong with staying a sole proprietor and carrying liability insurance that covers the kid's face.

BSDeality
10-04-2006, 06:10 PM
and when your insurance runs out on you they start with your truck, your trailer, your mower, your tools, your house, you're S-O-L.

in this day and age of lawyers and moron's you need to have a legal firewall between yourself and the business.

rutwad
10-04-2006, 07:45 PM
and when your insurance runs out on you they start with your truck, your trailer, your mower, your tools, your house, you're S-O-L.

in this day and age of lawyers and moron's you need to have a legal firewall between yourself and the business.

What if your wife runs a school bus full of kids off the road and kills them all. Then what happens when your insurance runs out? Is she INC. also?

And for someone starting out with about $2000 worth of equipment, why not become a LLC and carry no insurance?


I found out from a CPA that just went to a new class last week. Double check on a LLC, they are not as secure as everyone once thought.

covalawn
10-04-2006, 08:09 PM
My accountant said to go with an S-Corp. But I started searching and came up with this website

http://www.residual-rewards.com/llcvsscorp.html

Looks to me for a lawn service that LLC is the way to go!:confused:

I'll figure it out next season.

BSDeality
10-04-2006, 08:16 PM
What if your wife runs a school bus full of kids off the road and kills them all. Then what happens when your insurance runs out? Is she INC. also?

And for someone starting out with about $2000 worth of equipment, why not become a LLC and carry no insurance?


I found out from a CPA that just went to a new class last week. Double check on a LLC, they are not as secure as everyone once thought.what the hell does your wife have to do with this equation?

A LLC is a double wall protection. this way if you flatten a kid to a pancake with your wifes minivan they can only go after your "personal stuff" the business assets are safe on the other side of the LLC "firewall".

rutwad
10-04-2006, 08:56 PM
what the hell does your wife have to do with this equation?

A LLC is a double wall protection. this way if you flatten a kid to a pancake with your wifes minivan they can only go after your "personal stuff" the business assets are safe on the other side of the LLC "firewall".

you mentioned if your insurance runs out as a sole prop., then they start coming after your personal assets b/c there is no difference in bus. or personal assets. Maybe it's a bad comparison, but the family members of the school bus kids are likely to sue your automobile insurance company. Now what will hapen when the insurance runs out?

rutwad
10-04-2006, 09:02 PM
what the hell does your wife have to do with this equation?

A LLC is a double wall protection. this way if you flatten a kid to a pancake with your wifes minivan they can only go after your "personal stuff" the business assets are safe on the other side of the LLC "firewall".

Sorry, I guess I was scanning your post without really reading it. I was figuring it as someone sueing the business and going after your personal assets. I can see where someone may sue you and go after the business assets.

On a second note though, I just spoke with a CPA last week because I am in the same situation. She had just returned from a class and found out that if you yourself operate as a LLC, there is not as much protection as it used to be.

Eclipse
10-04-2006, 09:16 PM
She had just returned from a class and found out that if you yourself operate as a LLC, there is not as much protection as it used to be.

Because most LLC's are not setup and maintained properly.

rodfather
10-04-2006, 09:51 PM
and when your insurance runs out on you they start with your truck, your trailer, your mower, your tools, your house, you're S-O-L.

in this day and age of lawyers and moron's you need to have a legal firewall between yourself and the business.


glad to see someone is taking over the yelling/screaming about this stuff when I'm not around...good going matt

BSDeality
10-04-2006, 10:58 PM
Because most LLC's are not setup and maintained properly.Bingo! I paid over $1K in legal costs setting up my LLC, did i have to? HELL NO I DIDN'T! I hired the best business attorney in my town and had him draft everything, he did 100% of the work to ensure that I get the maximum protection from my LLC. All I did was sign about 25 or 30 different papers. I have talked with many CPA's and most don't know their ass from an LLC when it gets down to the real nitty-gritty that will make or break your life (after they chew up the business) in the event of catastrophe. If you needed a tux, you could go to Sears to get them, hell they sell 10x as many tux's as most operations, but if you want them to fit you right and not get snagged on anything you need to go to a Tailor who specializes in tux's.

Prestige-Lawncare
10-05-2006, 10:52 AM
I'm contemplating this very same issue ... LLC or Corporation.

Here is a little good reading:

http://www.corporate.com/llc-limited-liability-company.jsp
:weightlifter:

Prestige-Lawncare
10-05-2006, 10:55 AM
In part ... this is some of what it says:

Both S Corporations and LLCs allow owners to avoid "double taxation" and to pay income taxes on a flow-through basis like sole proprietors and partners. However, LLC's are quickly becoming a preferred entity among small business. Here are some key examples of the benefits of an LLC verses an S Corporation:

An LLC is simpler and faster to form. It may be formed in one step, while an S Corporation election can only be made after a General Corporation is formed first.

An LLC is not required to hold annual meetings or to keep formal minutes, while an S Corporation is required to do so.

LLC members can split profits/losses in any way they choose. In an S Corporation, shareholders must receive dividends according to the number of shares that they own, regardless of the amount of effort put into the business.

An LLC can be owned by any combination of individuals or business entities. Only United States citizens and resident aliens may own an S Corporation .Other entities generally may not own an S Corporation.

:weightlifter:

Lumberjack
10-05-2006, 11:26 AM
Just dont forget that there is no way to shield yourself from your own misteaks. If you whack a kid in the face they can still sue you personally and take everything. LLc's and s-corp cannot stop actions taken against you for things you personally did. They can only shield you from what others may do.

Josh.S
10-08-2006, 11:46 PM
So if I had a Corp, I only get taxd when I "cash out" or on the money that I recieve, but while it is still in the Corp the money doesn't get taxed? So if I was saving to buy rentals, and I had all the money in the Corp and then bought the rentals with that money is there a way to avoid being taxed except on the actual sale of the property and not taking money out of the Corp?