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geoscaper
01-13-2005, 07:18 PM
I did a little research on the topic, but would like to get others opinion on the subject. Pros or cons of each? What type do you have. Thanks.

Smithers
01-13-2005, 09:00 PM
i am an S corp. this way if someone sues, they sue the company only. dont know about the other kinds.

J Hisch
01-13-2005, 09:00 PM
I am a Sub S corporation if you have alot of personal assets then seperate yourself from your company. But remember you will get a pay check just like every one else. With a Individual any profit is yours not as much seperation is needed. I would say if you own a home then incorporate.

MMLawn
01-14-2005, 01:19 AM
LLC is the only way to go and why you are seeing more and more companies using it. With an LLC you have the protection of Incorporation but are not doubled taxed on payroll because that is still treated the same as a Sole Prop.

Also do not be confused into thinking that either, esp a S Corp will ALWAYS protect your personal assets because any good lawyer will quickly tell you different. Because IF you are the CEO/President of the Corp and esp if you are the only Officer of the Corp then your personal assets could also be at stake in court.

fairwayCuts
01-14-2005, 02:34 AM
Sole proprietor here. When I started up I really did't put to much though into it. It seemed like the cheapest and quickest way to go. Plus, I really don't have any personal assets for someone to sue me for. I have though though in the future, when I'm a bit larger, switching to a corp.

Anthony-MB
01-14-2005, 05:02 AM
i was told that the IRS only recognizes LLCs formed by two or more members; such as husband and wife, parent and child, friends, relatives


So I'll stay Sole proprietor or go with s corp.

MMLawn
01-14-2005, 10:10 AM
i was told that the IRS only recognizes LLCs formed by two or more members; such as husband and wife, parent and child, friends, relatives


So I'll stay Sole proprietor or go with s corp.


NOT TRUE at all as the IRS has nothing to do with deciding. It is whatever the rules in the State that you incorporate in that determines that as it is the Sec of State in each state that recognize LLC, INC's etc.

tonygreek
01-14-2005, 10:38 AM
mmlawn is absolutely correct regarding the state setting rules for LLC formation.

as for llc's, you also would have the flexibility to be taxed as an SP, C-Corp or S-Corp.

and as you've noticed, the best thing to if you have no knowledge of the legalities of forming a company is to talk to an attorney specializing in small biz, as well as an accountant. the accountant is who comes in handy for recommending tax strategies before you open your doors, as well as what tax status you should operate under. the attorney will make recs based on your goals and protection required.

these boards are great for generalities on the subject, but as you see, everyone has a different scenario that fits them best.

tony

geoscaper
01-14-2005, 05:13 PM
Are there any disadvantages to llc's? Good points so far.

Team Gopher
01-14-2005, 06:34 PM
Hi geoscaper,

Here are two posts that might help you.

DBA vs. LLC (http://server2.lawnsite.com/showthread.php?s=&threadid=59397)


DBA vs. Incorporated... (http://server2.lawnsite.com/showthread.php?s=&threadid=74393)

captaingreen
01-15-2005, 10:23 PM
I established as a sole proprietorship for my first two years, then at the advise of my CPA I became and LLC being taxed as an S-corp. this year. There are alot of benefits to this as mentioned above with your personal assets, as well as the tax benefits. I write myself a payroll check each week out of my DBA account and deposit it into personal checking, then the accountant is sent another check for my FICA, state and federal taxes, and unemloyment insurance- she then distributes it accordingly. This also has taken away the hassle of estimated quarterly payments. It's going to take some getting used to with the new method of paying myself but, I think it will pay off long term. Good luck!

MMLawn
01-17-2005, 02:24 PM
I'd look for a new CPA then because he is directly you in the wrong use of an LLC as the only advantge of a LLC over a Corp is the Double Taxation issue that faces a Operator/Owner S-Corp vs. a LLC. With an LLC you are still allowed to pay Qt'ly and avoid paying the S-Corp Tax. Which means the way you are doing it in addition to paying the nmormal taxes on your income monthly you will also get hit again at the end of the year the way he has you doing it. Also how could writing a check every month vs. writing one every 3 months for Taxes be LESS trouble for you?

captaingreen
01-17-2005, 02:45 PM
I beleive you have a subchapter s-corp confused with a c-corp. "An s-corp. avoids the double-taxation status by allowing the income of the corporation to pass through to its owners/shareholders" taken directly from my accounting text. As far as the est. quarterly payments, it was a large check to write a few months, I would rather be slow and steady with my payroll deductions.

MMLawn
01-17-2005, 04:02 PM
I beleive you have a subchapter s-corp confused with a c-corp. "An s-corp. avoids the double-taxation status by allowing the income of the corporation to pass through to its owners/shareholders" taken directly from my accounting text.


I think we are talking about two different things here. With a Corp, regardless of C or S you will also have to pay Corp Taxes on profit. Has a LLC it is a pass-through entity so all income and deductions will be passed through to the individual taxpayer. You will pay tax on profits at your individual rate not a Corp rate.

captaingreen
01-17-2005, 04:08 PM
I think we are talking about two different things here. With a Corp, regardless of C or S you will also have to pay Corp Taxes on profit. Has a LLC it is a pass-through entity so all income and deductions will be passed through to the individual taxpayer. You will pay tax on profits at your individual rate not a Corp rate.
Yes, I think we're on seperate pages here. I'm am a LLC, but for tax purposes filing as a subchapter S-corp. :waving:

jpmako
02-01-2005, 01:47 PM
Wow this crap never ends.
Team Gopher has posted some good links to follow regarding the differences.
Please people read up on the subject. As has been said before there are significant differences between DBA, LLC, S-Corp, C-Corp...
Every state has different laws/ regulations for business entities.
Do what is best for you, do not base your opinion on what is best for someone else. The best advice is to seek a good CPA and Attorney to speak with about the differences of each and what benefits they can provide! :waving:

Jason