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Incorporated

Discussion in 'Business Operations' started by HacMan91, Nov 23, 2001.

  1. HacMan91

    HacMan91 LawnSite Member
    Posts: 114

    I doubt if this post applies to the bigger companies. I didnt find anything helpful using the search. This year we have experienced a lot of growth and we decided it was time to incorporate so we could separate our business assets from our personal ones. There are so many options LLC, LLP, Incorporate. What do you guys reccomend. I know each one is a little different when it comes to taxes. My wife the CPA says ask my friend the lawyer and vice versa. What do you guys think.:confused:
     
  2. John Allin

    John Allin LawnSite Bronze Member
    Posts: 1,489

    As much as this might go against the grain.... don't be too quick to incorporate. You might be surprised just how big you can get as a sole prop..... and there are some distinct advantages to the sole prop route as the revenues increase.

    The wife is right.... check with a lawyer - BUT, check with an accountant too....
     
  3. Incorporating is key to protecting your personal assets. If you have assest that you don't want to disappear when your employee hurts someone or worse yet kills them in an accident, you should incorporate. I think.

    I always thought insurance covered that, until I asked. Seems if someone sues you and wants you bad enough it would be best to be incorporated. Something to think about, but , ask a lawyer/then a CPA.
     
  4. Kent Lawns

    Kent Lawns LawnSite Senior Member
    from Midwest
    Posts: 870

    S Corp.

    (It's what a Dentist or Doctor uses.)

    It'll cost $1000.00 for everything: Legal fees, applications, 38 number, bank account and checks, etc.
    It'll cost another $500.00 per year for tax returns and the like.

    Really the only ADVANTAGE (at this point) to incorporate is to provide liablity protection.

    Really the only DISADVANTAGE to incorporating (Sub S) is the cost to get going and annual tax returns.
     
  5. Fantasy Lawns

    Fantasy Lawns LawnSite Bronze Member
    Posts: 1,913

    get some solid advice from a Licensed CPA (not a book-keeper) whom is up on recent fed-state n local tax info .... should give you the best advice ...... if your at a stage in life -business which reguires this or you accually start to gain tax advantages ..... most working Accountants already know a qualified Business Attorney whom sets up inc.'s .....good luck ;->
     
  6. MATTHEW

    MATTHEW LawnSite Senior Member
    from NE OHIO
    Posts: 665

    Size of the business should not be the only criteria for choosing to incorporate. Do some serious research before going this route. What I do to separate accts. is to have the checking account at one bank, paying any non-business bills and depositing any non-business monies. Then I have the business account at a different bank with business income ONLY going in. Sometimes I pay non-business bills with it which maybe I shouldn't. But if I keep all receipts and records of transactions, I do not have any confusion.
     
  7. bubble boy

    bubble boy LawnSite Bronze Member
    Posts: 1,020

    remember if you grow to a significant size that incorporation cost will be nothing. a drop in the bucket.

    people here always say buy the best equipment for your business to succeed. incorporation is just another piece of equipment. you may never use its advantages, but still good to have just in case.:)
     
  8. John Allin

    John Allin LawnSite Bronze Member
    Posts: 1,489

    Well.... being properly insured CAN protect your personal assets even in the circumstances noted above, but again - the best advice all are giving here (almost universally) is to check with CPA & Attorney....
     
  9. GroundKprs

    GroundKprs LawnSite Bronze Member
    Posts: 1,969

    I don't suppose it has changed in 20 years, but in my experience almost every lawyer wants you to incorporate, to reduce your liability. And most accountants will try to talk you out of incorporating, because of all the extra paperwork for taxes. I am referring here to small, very small businesses. A good small business accountant (RARE BIRD) will be able to help you make a well informed decision on incorporation.

    Just remember that if you are solo, and you incorporate for liability protection, you are not getting that much protection in some states. If you are the only employee of the corporation, in the event of a disastrous event, the offended party will go after the corporation and the guilty employee. So they still got you by the family jewels.
     
  10. HacMan91

    HacMan91 LawnSite Member
    Posts: 114

    Thanks for the input. This upcoming year I will probably have a employee out cutting by himself and the liability concerns me. I do not want to be sued and have my personal assets involved. If they want to sue they can sue the company. I have insurance but I would like the peace of mind knowing if something happens that should be covered.
     

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