Register free!

The Green Industry's Resource Center



Reply
 
Thread Tools   Display Modes
  #1  
Old 04-12-2005, 05:30 PM
twohonestlawnguys twohonestlawnguys is offline
LawnSite Member
 
Join Date: Mar 2005
Location: virginia
Posts: 2
becoming a corporation

Wondering if any one had turned their company into a corporation. Insurance agent told me to become a corporation for cheaper rates.
Reply With Quote
  #2  
Old 04-12-2005, 06:04 PM
marko's Avatar
marko marko is offline
LawnSite Senior Member
 
Join Date: Oct 2003
Location: Villa Park (Chicago), IL
Posts: 964
A lot depends on your tax situation and personal property that might need to be protected. Your best bet is to talk to a CPA. He will be able to tell you right away the best approach (INC, LLC, Sole Prop, etc.) Don't base your decision on insurance rates alone.
__________________
186,282.4 miles per second is not just a good idea, It's the law!
Reply With Quote
  #3  
Old 04-13-2005, 02:03 PM
CuttingEdgeLandscaping CuttingEdgeLandscaping is offline
LawnSite Member
 
Join Date: Mar 2005
Location: Raleigh, NC
Posts: 14
I incorporated to protect my personal property (home, cars, savings) if there is ever an accident and I am sued. At least that was the advice I was given.
Reply With Quote
  #4  
Old 04-13-2005, 03:07 PM
tonygreek's Avatar
tonygreek tonygreek is offline
LawnSite Silver Member
 
Join Date: Aug 2004
Location: Lancaster, PA
Posts: 2,827
Quote:
Originally Posted by CuttingEdgeLandscaping
I incorporated to protect my personal property (home, cars, savings) if there is ever an accident and I am sued. At least that was the advice I was given.
that's a common misunderstanding... you can always be added to a lawsuit, as most are, especially if you are a one man show, or small crew.

you should seek the advice of an accountant and attorney to set up a plan that clearly defines where your personal liability ends and the business begins. something as simple as using a personal credit card to handle day-to-day expenses can "pierce the corporate veil" and bring you into the world of personal liability.

this is exactly why many business owners have their home in the name of an uninvolved spouse, which i do as well. and a good umbrella insurance policy is also a nice safety net.
Reply With Quote
  #5  
Old 04-13-2005, 04:33 PM
marko's Avatar
marko marko is offline
LawnSite Senior Member
 
Join Date: Oct 2003
Location: Villa Park (Chicago), IL
Posts: 964
[QUOTE=tonygreek]that's a common misunderstanding... you can always be added to a lawsuit, as most are, especially if you are a one man show, or small crew.

you should seek the advice of an accountant and attorney to set up a plan that clearly defines where your personal liability ends and the business begins. something as simple as using a personal credit card to handle day-to-day expenses can "pierce the corporate veil" and bring you into the world of personal liability.....
QUOTE]

Twohonestlawnguys,

Here is a decent link explaining how you can have problems, even though you are incorporated. http://www.rjmintz.com/piercing-the-corporate-veil.html
__________________
186,282.4 miles per second is not just a good idea, It's the law!
Reply With Quote
  #6  
Old 04-13-2005, 04:34 PM
marko's Avatar
marko marko is offline
LawnSite Senior Member
 
Join Date: Oct 2003
Location: Villa Park (Chicago), IL
Posts: 964
[QUOTE=tonygreek]that's a common misunderstanding... you can always be added to a lawsuit, as most are, especially if you are a one man show, or small crew.

you should seek the advice of an accountant and attorney to set up a plan that clearly defines where your personal liability ends and the business begins. something as simple as using a personal credit card to handle day-to-day expenses can "pierce the corporate veil" and bring you into the world of personal liability.....
[QUOTE]

Twohonestlawnguys,

Here is a decent link explaining how you can have problems, even though you are incorporated. http://www.rjmintz.com/piercing-the-corporate-veil.html
__________________
186,282.4 miles per second is not just a good idea, It's the law!
Reply With Quote
  #7  
Old 04-14-2005, 03:21 AM
SoloMow SoloMow is offline
LawnSite Member
 
Join Date: Dec 2004
Location: North Texas
Posts: 172
My understanding from Business Law 101 is that the entire reason for incorporating is to shield you, personally, from liability. Example: If one of your employees, while driving an Exmark Hemi 2005A , careens out of control and smashes through the local McDonalds kiddie playground, your personal wealth cannot be subjected to a lawsuit. They cannot take your house, car, wife, or first-born child. That being said, always consult an attorney. They probably made a better grade in the class than me!
Reply With Quote
  #8  
Old 04-14-2005, 03:40 AM
JD Lawns JD Lawns is offline
LawnSite Member
 
Join Date: Apr 2005
Location: Indianapolis, IN.
Posts: 3
I agree with SoloMow, the way I understood my intro to law class was that by becoming a corporation you are not liable for actions taken under the name of that entity, the corporation. But that is a good point to be noted tonygreek, if there is a certain boundary that must not be crossed, such as not using a credit card for expenses.
Reply With Quote
  #9  
Old 04-14-2005, 09:11 AM
tonygreek's Avatar
tonygreek tonygreek is offline
LawnSite Silver Member
 
Join Date: Aug 2004
Location: Lancaster, PA
Posts: 2,827
jd, that's exactly my point. incorporating is not a panacea. i'd be curious to see how many people on this board have formed an inc to shield themselves from liability but do not follow through with their state's requirements (meetings/minutes, bylaws, directors, etc).

Business Law 102 went in to quite a bit of depth on the veil...
Reply With Quote
  #10  
Old 04-14-2005, 05:51 PM
CuttingEdgeLandscaping CuttingEdgeLandscaping is offline
LawnSite Member
 
Join Date: Mar 2005
Location: Raleigh, NC
Posts: 14
I update my minutes with my lawyer. All purchases are made with a company credit card and all money goes to business banking accounts. I think I am going to take my name of our mortgage, like you suggested. I have thought about doing that for a while. Any other things I should do to protect myself?
Reply With Quote
Reply

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump





Powered by vBulletin® Version 3.8.6
Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.
Copyright ©1998 - 2012, LawnSite.comô - Moose River Media
All times are GMT -4. The time now is 09:48 PM.

Page generated in 0.09636 seconds with 7 queries