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Discussion in 'Business Operations' started by EJD Lawnpride, Jul 4, 2007.

  1. EJD Lawnpride

    EJD Lawnpride LawnSite Senior Member
    Posts: 313

    What are the benefits of being incorporated? My lawyer and accountant say to do it. What do you think?
  2. PlatinumLandCon

    PlatinumLandCon LawnSite Bronze Member
    Posts: 1,315

    It all depends on how much you make, your assets, the amount of money you re invest into the company, etc,etc.

    lots of questions you need to ask before moving forward.
  3. EJD Lawnpride

    EJD Lawnpride LawnSite Senior Member
    Posts: 313

    What kind of questions do you ask your lawyer or accountant?
  4. mmacsek

    mmacsek LawnSite Senior Member
    Posts: 543

    LIABILITY!! The business is liable and not your personal assests if they are jointly owned. If Inc. and a subchapter S all profits pass through the corp. and taxed to the officers. You can also write off health insurance. Ask your accountant what the tax benefits are and your business attorney what liability protection you have with Inc. Matt
  5. EJD Lawnpride

    EJD Lawnpride LawnSite Senior Member
    Posts: 313

    My accountant said that there really isn't any tax benefits other than having liability security. She said at my level it is more paper work and more money.
  6. causalitist

    causalitist LawnSite Senior Member
    Posts: 610

    from what i know it also seperates business money from your own money.

    i THINK you only get taxed on the salary you draw from the business account.

    not exactly sure how the money you leave "in the cooperation" gets taxed.

    i had this bookmarked, not sure if its worth anything.
  7. bohiaa

    bohiaa LawnSite Fanatic
    Posts: 5,220

    I have been confussed on this issue also.

    My tax guy said most of the LCO's do a LLC. Now why this is I dont know.

    however he did say that a corp cost a lot of money Jsut to do it and for me it would NOT be worth it. I'm at 100.000 in sales.

    Most of waht I own is in the Business name. of corse just being a DBA. that really doesn't mean anything. "that I know of" it seems that if I got sued they could go after everything
  8. TSG

    TSG LawnSite Senior Member
    Posts: 444

    In the early years it is easier and the tax situations better to be a sole prop and buy a more insurance.
    Year 2 or 3, is when you should go S corp.
    The difference between LLC and S corp is the tax benefits, and a GOOD CPA
    can explain them. LLC's are great for real estate companies
    Don't go through the expense of incorporating unless you know you are going to stay in the business.
    Just .02
  9. Evan528

    Evan528 LawnSite Silver Member
    Posts: 2,144

    My accountant said pretty much the same exact thing.
  10. lawnspecialties

    lawnspecialties LawnSite Silver Member
    Posts: 2,513

    In general:

    Sole-proprietorship treats you and the business as one. Both money-wise and laibility-wise.

    LLC treats you and the business as one money-wise. Liability-wise you are seperate entities.

    Incorporation treats you and your business as two, both money-wise and liability-wise.

    I've been LLC for a year and a half since I knew I was going to be hiring employees. I now have two part-timers and it gives me great peace of mind. My trucks, equipment, and everything are now owned by the business but I own the business. I'm probably going to go back to solo next season but I'll still retain the liability protection my LLC gives me.:)

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