PDA

View Full Version : What else can you do If you Incorperated?


afftandem
01-19-2005, 12:04 AM
For those of you who are incorperated, I was wondering are their guidlines in which what you could do under your corp......

i.e.... Myself, I was goin to do lawn care this year, and come this Fall for the off season I was looking to purchase a forclosed home to renovate and then use as a rental / lean against that home, buy another, and rent it/etc./etc.

My question is, if I incorperate, can my business (a growing lawn srvc./landscaping co.) purchase homes for rentals???
It would be a lwn srvc/real estate acquisition company (rentals, but some would be to rennovate and sale)

Can I do this under the same corp?

Also considering other investments such as coin laundry's and perhaps a carwash.

afftandem
01-19-2005, 12:06 AM
Also, I forgot to ask.... If I can, could I then write myself a minimum wage salary, and then flow my profits over into my rentals... seems as if I were doin this there would have to be some benifit for tax purposes... any ideas??? Are any of you into other investments other than your lawns??

Jeff@SGLC.ca
01-19-2005, 12:36 AM
Hey Incorporation is great. If you want to run more then one business that is unrelated it works quite well. My proper corporation name is Moak Investments Ltd. and I'm listed as a investment and holdings company. I have the lawn care, I do have a laundromat and soon to have rental properties. The way you work it is you run each company as a seperate name so it would be X LTD operating as Lawn Care Guy, operating as PR Rentals. You get the idea. Later if you want to sell one off, you sell of the name nad the business still keeping your main corporate identity and other assets it may hold.

Jeff@SGLC.ca
01-19-2005, 12:41 AM
Also, I forgot to ask.... If I can, could I then write myself a minimum wage salary, and then flow my profits over into my rentals... seems as if I were doin this there would have to be some benifit for tax purposes... any ideas??? Are any of you into other investments other than your lawns??


Different laws in different countries but....as a privately held corporation, you are listed as an Officer of the same ie President and a ShareHolder. Now you can name your "wife" "mom" and such as well if you want then involved as another officer of the company and private shareholder. Each one of your companies will make a profit or a loss. You yourself would collect a wage each week which would go as an expense to your company. The accumlation of profits would then go into you're bank account, be it seperate ones for each business or one general one. From there you can use this money to aquire more assets, grow the business and so forth.

It gets quite involved as to what you can do and can't but that's a lil idea. I collect a salary each week from my company the same as I would pay an employee their salary or wages.

afftandem
01-19-2005, 01:06 AM
Can the corp. buy stocks or bonds???

thanx.. very helpful.

Jeff@SGLC.ca
01-19-2005, 09:15 AM
The corporation can put short capital into GIC's, RRSP's, and other investments.

JimLewis
01-19-2005, 11:48 AM
I suppose you COULD run both businesses under the same corp. entity, but the question is; Why would you?

Generally, the biggest reason to incorporate is to protect assets. If your employee runs over a 2 year old kid with your truck, the parents can't come after you personally or your property, they can only come after the assets of the corporation. So for this reason, you usually keep the expensive things (homes, boats, vehicles sometimes) in your name and just keep the smaller assets in the corporate name. Then, not much is at stake if someone sues your pants off.

If you had houses, stocks, bonds, etc. under the same corporate name, then whoever sued the corporation could get all that stuff? Whereas if you had these under two separate corporate entities, they could only sue you for the lawn stuff.

Jim

KenH
01-19-2005, 11:58 AM
I agree with Jim. I talked with a CPA about this. I am INC, and wondered about buying houses, reselling, etc. and was told it is better to do it in your name as opposed to the Corp.

tonygreek
01-20-2005, 12:49 PM
afft, be sure to find an accountant that could best help your limit your tax liabilities. if you want to buy and hold the houses, you can typically limit your tax exposure by doing so through your retirement accounts. IRAs and Roth IRAs are able to do this.

i know you've said your a former AF guy, but not sure how long you've been in Dayton. if you want any insight on neighborhoods, just let me know. i own a remodeling company and plan on starting this as well, outside of the company, as i am slowly liquidating my stock portfolio, and there is no better investment than real estate as you are discovering.

tony

Precision
01-20-2005, 02:18 PM
What Jim said.

you have just pooled your assets so If you run over fluffy with the mower and some award happy judge and jury get the case, you just gave them your lawn business and the rental properties.

Not smart.

Separate business ID from Personal ID is why we incorporate. Same thing if we have more than one business. Separate them.

VERY cheap insurance.

marko
01-21-2005, 02:53 PM
Just incorporated this week. My attorney told me that while incorporating will protect you 99% of the time, there is still the chance that if the corporate veil can be pierced, your personel property could be at risk. He said to have a good insurance policy and that should take care of it. Here is an article that can explain it better:
http://www.rjmintz.com/piercing-the-corporate-veil.html
Good Luck!!!