OHIO: LLC, Corporation or Sole Proprietorship?

[RickL1700]

Hello and thank you for taking the time to read and help me understand what exactly it is I need to do to be a legal, tax paying, small lawn care business in the state of Ohio. I am going to be starting a small company with 40-50 residential accounts this year. I already have a General Liability Ins. Policy of $1 Million. I need to get licensed and know about how to file my taxes. What should I register as a LLC, Or Corporation. I am the Sole owner/operator of the business and any experience/knowledge would be appreciated. Thank you

[gardenkeeper88]

Start out as a sole prop. or llc. other corps you need partners or executives and then hold meetings, and that. There more but look it up on the internet and read what each has and what you need to do to meet the requirements.

[grass-scapes]

my business is an S-corp. I own 100 percent of the stock. I have no partners. I save about 15% from the elimination of the self-employment tax.

I have to have a shareholder meeting once per year. I am the lone shareholder....get the drift?

My wife is listed as the secretary. I file paperwork once per year with a fee to the state.

Simple, easy, cheap. I think it cost me $35 dollars to form an S-corp

NOT a c-corp.....form an S-corp
Your profit from the business is reported on your personal tax forms at year end.

You have to file a corporate return but all tax liability transfers to the shareholders.

[meets1]

Good point. I was just coming here to look or thread myself. I have an S-corp. Partnership. Now lookinig at another business. Here is my question though - I have property. Build a retail store at it - I won blding but they pay me rent. Then I start another business on opposite end of property which I will run and that business pays me rent. So you have LAND. BLDING 1 and BLDING 2 All which I will own. But do I pay for land myself. Blding 1 and 2 I also will own and build. Those bldings in a different name, pay me rent, which pays mortage, etc.

[grass-scapes]

On rentals, I would suggest an LLC. It makes more sense since you don't actually have the self employment income, just rental payments and such. It also keeps it separate from your personal and your other businesses.

You could also form a parent company which is incorporated, and several smaller llc's or S-corps. Seems the tax paperwork would get complicated at that point.

[integrityman]

I have an LLC- It works for me.

[RickL1700]

Thanks guys I appreciate your help. I have all the required paperwork and a money order for $125.00 made out to the secretary of state and all I have to do now is mail it in and in a couple weeks I will be a licensed L.L.C company. BTW would I be able to get only $500,000 in GLI instead of the $1 Million? Or is it worth the extra $25 a month to keep the Mill?

[silverado212]

You could go go with 500K GL, but why? In my opinion you should go with a million. I am an LLC. Just sat down with my accountant yesterday and he said I was in the best spot being one. I would advise you have an attorney set things up for you if you can spare the money. That way you are up to speed on any legal issues you should need to know. If nothing else talk to one for advice. Also get your self an accountant to help you with all tax issues and financials.

[grass-scapes]

Just curious as to why you chose an LLC over an s-corp? What factors played into your decision?

[DA Quality Lawn & YS]

Having recently read a book on biz structures, the S Corp does not hold many advantages over the LLC at all. Perhaps savings on self employment taxes, but you sting your own butt when you go to collect your soc sec at retirement (if there is any left??). Advantage LLC here.

Now if you are solo with a few accounts, don't anticipate debts to be any sort of a problem, then sole prop is just fine. Just get a nice big fat limit of GL coverage and should be ok. When you start bringing on employees, getting a broader reach, taking on biz debt then move to LLC.

(Note, an LLC does not exempt you from self employment taxes whatsoever. There is NO tax advantage to a single member LLC vs. a sole prop.