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FiremanMike
05-28-2003, 09:17 PM
Just curious if most people are running their business as a DBA or LLC. I am looking into turning into an LLC, but the costs are pretty high ($700.00) plus filing fees. Does anyone know of a less expensive way, or am I stuck using a lawyer?

Thanks,
Mike

GreenQuest Lawn
05-28-2003, 09:36 PM
The dba is just your business name. (may also be all you need for a sole proprieter) I have a dba for GreenQuest Lawn Care and I am an llc.

With that said I would look elsewhere if you are quoted a price of $700 just to file the papers. Did I read that right?

I pay $35 per form (2 forms 1 dba and llc $70.00) through my accountant, he handled all the filing. Then I pay $5.00 per year for renewing the LLC.

I would talk to an accountant anyway, I was just informed to switch to an S corp to save over $1800.00 per year in taxes.

Turf Medic
05-28-2003, 11:23 PM
Local attorney wanted $500 dollars plus $300 "filing fees" we checked it out on the internet and found the forms on our secretary of state web site. Filled out the forms, printed them out took them to the office and $130 dollars later we had a LLC. Had to advertise in the local paper, about $65 for that.

NCSULandscaper
05-28-2003, 11:31 PM
Right now i am just DBA but will most likely become Inc. in the next year.

Green in Idaho
05-28-2003, 11:51 PM
Originally posted by FiremanMike
I am looking into turning into an LLC, but the costs are pretty high ($700.00) plus filing fees. Does anyone know of a less expensive way, or am I stuck using a lawyer?

Thanks,
Mike

$700????!!!!!!!
Ouch! That's pretty tough to absorb, especially when you are a part-timer. That averages to like $20+ per week for the first year! And maybe annual renewal fees thereafter... Ouch! And especially when one doesn't even know why they need to be one or the other.... OUCH!

Oh yea, BTW organizational costs such as a filing fee are NOT fully tax deductible in the current year. OUCH!

;-)

Green Quest, you may want to revisit the entity choice w/ your acct in light of the new dividend tax rates. Depending on your other income (spouse), biz income, it is possible (in some cases) now that a C-corp is more attractive.

JimLewis
05-29-2003, 12:49 AM
I think that price is pretty fair and normal. I'd expect to pay at least that if I were going to change.

The LLC thing is definitely a great way to go. I've made several posts about it in the past. There are a lot of advantages to doing it. The biggest being that you are separated from your business so in case of a major lawsuit the most you could lose is business assets.

The only disadvantage to an LLC is that in you have to totally separate ALL your business stuff from your personal stuff. That means, no more taking checks that come in the mail and getting "cash back" at the drive through teller. No more using the business checking account or debit card for ANYTHING personal. No more getting paid daily. You have to start paying yourself regular paychecks once every 2 weeks or whatever. And on and on.....

Because if you don't do all of these things then in case of a major lawsuit it's real easy for the prosecuting attorney to prove that the business wasn't separated at all from the personal stuff and THEN they CAN go after your personal stuff, regardless of the fact that you were set up as an LLC. The LLC is determined by the court to be a sham and then it's just like you never even changed over from a DBA.

So if you do decide to go the LLC route, just keep this stuff in mind. It's definitely a wise choice, but it takes some serious dedication to totally separate personal and business stuff and not tap into the business funds - something I've never wanted to give up. I enjoy being paid every day!

Green in Idaho
05-29-2003, 07:36 PM
Jim,
that of which you write is true whether one uses an LLC, a corp, or stays sole prop.

Yes, an LLC is great. But the S-corp also offers much the same benefits. And depending on the amount of income and size of operation an S-corp can usually be less costly for taxes.

The bigger the operation, the more profit the more likely an S-corp is better. The real answers depend on the state of operations, the owner's situation, and the expectations of the future.

Bottom line, a business person needs to consult an accountant knowlegeable on entity choice for their specific situation. They can show the +/- of the options, explain everything and then YOU make the decision.

****

You get what you pay for right? How many times have people posted that here when talking about scrubs.

Whether it is fire protection, legal advice, or lawn care it tends to be pretty accurate.

****
Mike,
Does anyone know of a less expensive way?

<<Yes-- Do it yourself.
Or pay for a cheaper lawyer.

Although you obviously don't know the legal course of action or the things to put in a document to cover all your bases(CYA). Never done one? That's why the lawyer charges you a fee for their service.

Next time your customer asks you if they can find a cheaper way to get their lawn mowed, compare YOUR answer to THEM to what you are expecting to read on this thread....

""You bet, Mrs. Jones. You can mow it yourself. That's less expensive!""

Let it Grow
05-30-2003, 02:09 AM
A DBA (Doing Business As) is just your business name, it is not an actual business entity. I think you mean Sole Proprietor. If you are fairly small then sole proprietor is probably the way to go. Once you get larger you may want to look into llc or s corp.
Good Luck

FiremanMike
05-30-2003, 07:18 AM
Thanks all for your input. I have decided not to pursue an LLC at this point. After speaking with my attorney and accountant, they also concluded that with me being so small (20 accounts), and not wanting to grow so fast, staying with a DBA is good for now.

Thanks,
Mike

Green Finger
06-01-2003, 08:33 PM
Hey Mike

It cost me $50.00 bucks for the state filing fee. I am now a LLC. Email me and I'll give you the standard write up. Get in contact with your local State Taxation office. Save your money and do it yourself.:blob3:

JimLewis
06-02-2003, 04:10 AM
Save your money and do it yourself. I am not so sure this is wise advice. There is more to running an LLC or Sub-S Corp, or Corp, etc. than just the filing. Just filing the paperwork alone doesn't separate you from your business - and that's the biggest reason for changing over from a sole-prop to some other entity. Filing is just the first step. From there you have to have legitimate yearly meetings, elect officials, keep records of meetings, separate all of your business and personal finances, etc. etc. etc... If you don't do all of the above (and so much more), then in case of a lawsuit against your company, it's easy for the prosecution to "pierce the corporate veil" and then go after your personal assets (and any that you may have in the future).

This is why I think it's important to talk to an attorney and do it all 100% right. Also, a good attorney will keep tabs on you and make sure you continue to do it all correctly. Finally, a good attorney will also be able to tell you all sorts of neat tax-saving ideas you can do with your new entity. These are not things you're going to get if you just go down and "file on your own".

It's amazing - we complain here on lawnsite when a customer won't hire a "pro" and instead hires some scub or screws it all up doing it themselves. And yet we do the same exact thing in other parts of our life. If there's one lesson I've learned well it's that you get what you pay for - in almost everything. And there's a reason why a lot of people don't take the "shortcut" that you see.

mtdman
06-04-2003, 11:47 PM
I am in MI, and I just turned LLC to protect my name. DBAs give you no protection against an LLC or INC in Michigan. It cost me $300 with attorney's fees. $700 is waaaay too much. Look for another attorney. LLC is simpler than INC in MI, because no board meetings or minutes are required. It's an INC with partnership tax benefits. Like I said, I did it to register my name in MI.

But if you are only doing 20, you might not need it.

Green in Idaho
06-05-2003, 10:42 AM
An LLC is partnership taxation ONLY if there are two or more members. Otherwise it's the Schedule C.