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  #1  
Old 11-24-2002, 10:42 AM
JACKSONBRIT JACKSONBRIT is offline
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Llc, Incorporated

Hi All,

I am a owner operator of Montgomery Lawn Service in Huntsville Alabama, I would like to know a little more about being incorporated, the benefits, pros, cons and the requirements.
Thanks.
Johnny
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Old 11-24-2002, 02:42 PM
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rodfather rodfather is offline
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I went from Sole Proprietor to LLC last January. An attorney can explain to you the benefits in no more than 1 hour. I would strongly suggest you see one to find out if this is the right path for you to go.
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Old 11-24-2002, 03:26 PM
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JimLewis JimLewis is online now
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I have a good friend who recently graduated from law school with honors and is now working for a top law firm on the East Coast. I asked him not to long ago about this and below is the text of the email he wrote back. You may find it interesting. (Keep in mind, this was a discussion among friends so his lingo is a little loose :-)
Quote:
The best business entity to have is an LLC. The sub C corp is the absolute
worst of 'em all, with the sub S a close runner up. Corporations are
archaic, thats all there is to it. Partnerships and sole proprietorships
are the easiest to manage because they dont really have formalities, but
they also dont shield you from certain (and I do mean "certain") liabilities
the way corporations do. Hence, the LLC. It provides ALL the protection of
a corp, with the casual management of a partnership (or probably in your
case, a sole prop.) As far as tax concerns go, again, the corps suck
monkeyballs, and the partnerships and sole props are the best because the
income and deductions "pass through" to you, the individual (i think its a
schedule "c" or something) The LLC is the same way, so you have a liability
shield, ease of management formalities, and pass through tax stuff. Thats
why it was created. (its only been around for a while)

There are several other entities, such as limited liability partnerships
(LLP's) and limited liability limited partnerships (LLLP's) which are also
good, and pretty much just like LLC's, except those are primarily for
existing partnerships and limited partnerships (LP's...are you confused
yet?) that want liability shields and dont want to reorganize as an LLC. So
they just file a piece of paper with the state and they add "limited
liability" to their name. These days it is pretty much malpractice for an attorney to
recommend that someone form a regular partnership or LP. Duh, why wouldnt
you want limited liability??

The reason you dont want a regular corporation is because the tax stuff
sucks (yes, even for a subchapter S) but most importantly, the reason one
forms a corporation is for that liability shield, however there are a lot of
corporate formalities that you MUST follow, otherwise if/when you NEED that
limited liability, it isnt going to be hard for opposing counsel to show
that the corporation doesnt exist or is just a sham....called "piercing the
corporate veil." Forming an LLC is easy as pie. Just get yourself a
template or form from any sort of do-it-yourself kit and modify it to say
what you want. Really easy stuff. No need to pay someone else to do it,
thats for sure! Oops, I shouldnt say that...dont want to put me out of
business, hahaha.

Best of luck!
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Lewis Landscape Services - Oregon
"kickin' grass and takin' names"


www.lewislandscape.com - Portland Oregon Landscaping Company

landscape design Portland Oregon
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Old 11-24-2002, 06:01 PM
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rodfather rodfather is offline
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Jim,

I agree with most of what your friend had to say...other than using the "do-it-yourself" kits and saving a lot of money.

I tried it that way first. Big mistake. Why? These companies on the internet who say they will form the LLC for you DO NOT offer legal advice. I wasted a couple of hundred dollars because I thought in the off-season I would form our LLC by myself and use one of them. Duh.

Sure, they do the name check for you and perform the filing with the State and Fed, but that is about it. They can't tell whether a LLC is right for you...only an attorney can.
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  #5  
Old 11-24-2002, 07:21 PM
benjamin benjamin is offline
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An LLC is an entity recognized on the state level. For tax purposes an LLC is the same as sole proprietorship unless other designations are chosen.
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Old 11-24-2002, 08:26 PM
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JimLewis JimLewis is online now
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I agree with rodfather. I wouldn't use a kit either, even though my friend recommended it. I think it's safe just to pay an attorney a few hundred $ to be sure it's done correctly.
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  #7  
Old 11-30-2002, 12:23 AM
wemolow wemolow is offline
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I'm a little slow on this. There's repeated mention of LLC.
What does it stand for and is it under sole proprietorship, partnetship or corporation? Is it "S" or "C"?
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  #8  
Old 11-30-2002, 01:20 AM
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AztlanLC AztlanLC is offline
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Well the attorney would reccomend something to protect you for liability, but talk with a good cpa and he'll explain you what would be the best benefit for you moneywise, if well managed a C corp is a good choice too, it all depends on the size of your company, use a lawyer when you have decide what you want to become, I strongly reccomend to talk with a cpa about this.
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  #9  
Old 11-30-2002, 09:59 AM
beck beck is offline
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talking with a friend that is a CPA, she recommended the S corp before the C, because with the S corp the taxes pass through to the individual(k-1). Whereas the C corp there is double taxation both the company and the individual are taxed. She also pointed out at a certain point (income wise) it may be better to be a C-corp, but I don't remember all of those criteria.

The LLC is a limited liability COMPANY which can be a sole proprietorship, partnership or any entity. All taxes get passed through to the individual, but still gives the owner liability protection.

One advantage the corporations have is that it makes you an employee. And as an employee of the company you are viewed by creditors as having a job and not as self-employed. For some reason their is a stigma over us that are self-employed.

Another side note for corporations is that it has a fiscal year which does not have to coincide with the calendar year. It is possible to set it up in the middle of the year, during the time when you are doing the work and producing income, not at the beginning of the year when their is little $ in the bank or a lot of $ going out for landscaping(mulch) or initial chem applications.
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  #10  
Old 11-30-2002, 11:23 PM
Darryl G Darryl G is offline
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Beck - As an LLC I was also able to choose whether to have my fiscal year follow the calendar year or the middle of the year.
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