DBA or LLC

Discussion in 'Business Operations' started by green_thumb, Apr 7, 2008.

  1. green_thumb

    green_thumb LawnSite Member
    Posts: 120

    I'm just starting my own business and want to be legit. I'm going into this as a sole owner. No partners. I have a few accounts for lawn work already. What would be the best bet to get started? DBA or LLC. Thanks.
     
  2. Raking-It-In

    Raking-It-In LawnSite Member
    Posts: 62

    Dba is fine but if you get big (alot of accounts) your going to whant to be fully covered and you are not with a dba... as far as a LLC goes ...thts probably not the best way to go.... if i was you i would be come in corperated (S CORP) what ever you choose to pick do your research on all choices... alot of it depends on taxes and how you pull money out of your business !
     
  3. green_thumb

    green_thumb LawnSite Member
    Posts: 120

    Thanks for the advise. I ended up going down to county clerk and registered my fictitious name as a DBA today. In and out for 31$. Ya gotta start somewhere. Then went to IRS.gov to get an EIN, which you have to have in order to open a bank acct.. Did all that in one day. Just in time for my first big retaining wall job tomorrow, big for me anyway. Feels good to be legit.... Just need to look into insurance. Any suggestions.
     
  4. chrisludwig

    chrisludwig LawnSite Member
    Posts: 39

    An LLC or S-corp or C-corp will shield you from some personal liability if something happens and you business gets sued so you dont lose all your personal belongings, like your house, should your mower kick up a stone and hit a child in the head...

    Also, I recently read that sole proprietors are 7-10 times more likely to be audited by the IRS than a corporation. That headache in itself would motivate me to get some protection.
     
  5. Fahzu

    Fahzu LawnSite Member
    Posts: 119

    I don't fully understand all the details of incorporation, but a local radio show was briefly discussing this very issue and it seemed like incorporating was the way to go (for your protection). However, if you are not keeping the seperation between your business and your personal expenses very clean you are just as much at risk as if you were not incorporated at all. But don't take my word for it.
     
  6. BOEpavers

    BOEpavers LawnSite Member
    Posts: 93

    When we set our business up 5 yrs ago went to the attorney first. He suggested going to the accountant. Went to the accountant, discussed how we wanted to operate the business, what our financial goals were, etc. she suggested LLC or S-Corp. Back to attorney, he explained the differences between the two, and jointly we decided on S-Corp. Total cost to set up <$1,000 including all fees, etc. Definitely get general liability insurance - higher the coverage the better. Any good insurance agent should be able to set you up.
     
  7. green_thumb

    green_thumb LawnSite Member
    Posts: 120

     
  8. brucec32

    brucec32 LawnSite Platinum Member
    Posts: 4,403

    One thing I think is overlooked with LLC's in terms of being shielded from liability....

    You'll still need liability insurance. It doesn't cost a ton more to add more insurance if you feel you need more than $1M or whatever. But if you rely on being an LLC and are not insured, who is going to defend you in court? A big portion of the value of liability insurance is that the insurer pays for your defense.

    Are you just going to ignore summons and loose every case and then rely on the LLC shield to protect you from them trying to collect? Or arrive at court defending yourself?

    I think the LLC is useful as an adjunct to proper insurance, but many seem attracted to it as a substitute for insurance. I don't think it is sufficient for that.
     
  9. bohiaa

    bohiaa LawnSite Fanatic
    Posts: 5,220

    Please excuse this question, But is it true that ya cant work outta your house if you INC ?
     
  10. bglawncommand

    bglawncommand LawnSite Member
    from Chicago
    Posts: 48

    No. Not true whatsoever.
     

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