Couple of questions

Discussion in 'Starting a Lawn Care Business' started by eddings, Jan 24, 2007.

  1. eddings

    eddings LawnSite Member
    Posts: 97

    I was wondering if there was an advantage to forming a company as opposed to filing it under your personal taxes?
     
  2. 2menandamower

    2menandamower LawnSite Member
    Posts: 247

    I am meeting with an attorney this afternoon to ask this and several other questions....I will let you know what I find out about it....
     
  3. eddings

    eddings LawnSite Member
    Posts: 97

    thanks for the help
     
  4. LB1234

    LB1234 LawnSite Gold Member
    Posts: 3,210

    There are advantages and disadvantages. You need to speak with an attorney or accountant or both.
     
  5. prizeprop

    prizeprop LawnSite Senior Member
    Posts: 820

    My understanding of it is; If you are a sole proprietor and get sued, they can come after your personal assets(house,cars,savings,future wages, etc.) If you seperate yourself from the company by being an INC,LLC etc., they can only come after the business assets(equipment, trucks, cash, etc.) But talk to a lawyer!!
     
  6. prizeprop

    prizeprop LawnSite Senior Member
    Posts: 820

    I am set up as an LLC, which gives me protection and is as easy as a sole proprietor setup.
     
  7. TSG

    TSG LawnSite Senior Member
    Posts: 444

    Be an LLC, or S corp
    OR
    Buy more insurance (1,000,000) it is tough to imagine being sued
    for more than that.
    I am going the Sole Prop route for now as there are more tax
    advantages at this stage.
    Start-up buisness are allowed to use losses against personal income
    and there true benifits in this.
    I have many friends (filthy rich) that have never made a penny
    Get an accountant,then the attorney
     
  8. LB1234

    LB1234 LawnSite Gold Member
    Posts: 3,210

    These posts are EXACTLY why you need to speak with people who know what they are talking about.

    Being an LLC doesn't mean that they CAN'T come after your personal assets it just means that your business is seperate from your personal and there is LESS of a chance they can come after your personal assets. Of course if you are an LLC and mix personal and business then any good lawyer will prove you are an LLC but not operating like one therefore they can go after your LLC.

    As for the comment about 1 Mil insurance being enough...:laugh:

    Any reputable insurance agent will tell you there is no such thing as enough insurance. It is really a risk versus reward with insurance. You are risking 1MIL being enough by saving say 500 dollars per year over 1.5MIL insurance.

    Speak to people that know what they are talking about and do this kind of stuff for a living.
     
  9. 2menandamower

    2menandamower LawnSite Member
    Posts: 247

    LB1234,
    I agree with what you are saying. I met with the lawyer last night and he told me this. If you are a sole prop, and you break something your insurance pays, if you are an LLC and you break something the same insurance pays. He also said that the only real protection you get from an LLC is for debt. He did tell me if I decide to buy 2-3 trucks and more and more equipment then I should consider LLC but for now there is no need in spending the money to go with LLC. I learned alot from talking to him... Get a lawyer and talk to them and let them tell you what is the best in your state....
     
  10. LB1234

    LB1234 LawnSite Gold Member
    Posts: 3,210

    Good to hear.

    Now hopefully some will listen/read for their own sakes. LLC really has nothing to do with being sued and not being able to go after personal assets. It may help supported by proper documentation, but their are some crummy lawyers out their that will do anything for the almightly dollar.

    Now do yourself a favor and speak with an accountant/CPA and then a reputalbe insurance agent. They will be able to explain the flip sides of the coins.
     

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