Joining a LLC as an owner

Discussion in 'Starting a Lawn Care Business' started by christo, Dec 7, 2009.

  1. christo

    christo LawnSite Member
    Posts: 1

    Hello,

    My good friend started a small time lawn care business about 3 years ago. He registered as a LLC at the beginning of 2009. During the 2009 season I helped him with some accounts when he was busy and now we are discussing splitting ownership of the business 50/50. He is the only person right now that operates under the LLC and services approximately 20 accounts, both residential and commercial.

    The problem I am having right now is that I am not sure how well he is keeping track of the finances and not real sure what his intentions are this tax season. If I agree to joining the LLC then I will be responsible for the organizing the finances, with the assistance of a CPA of course. He currently does not have an accountant or attorney.

    My main concern that I am not sure of is if I were to become a half owner at the beginning of 2010 then would I be held responsible for any actions of the LLC prior to me joining? This is a good opportunity for me to make some extra cash but definitely not worth it to me if there was any unknown wrongdoing that I can be held responsible for.

    If anybody could help answer this question or direct me to some resources I would be greatly appreciative.

    Thanks!
     
  2. unkownfl

    unkownfl LawnSite Gold Member
    Posts: 3,838

    I'm not 100% sure if a LLC is right for you guys. Normally a LLC is good for a single operator. If you want to 50-50 the company it is probably better to incorporate and issue shares.
     
  3. JFGauvreau

    JFGauvreau LawnSite Bronze Member
    Posts: 1,297

    Isn't LLC a corporation?

    you could also go in a business with partnership, or a corporation with 50/50 shares
     
  4. Greg78

    Greg78 LawnSite Silver Member
    Posts: 2,010

    Last edited: Dec 7, 2009
  5. Greg78

    Greg78 LawnSite Silver Member
    Posts: 2,010

  6. unkownfl

    unkownfl LawnSite Gold Member
    Posts: 3,838

    If you are worried about back tax liability you will be fine. If you stay a LLC or go to INC you will have to get a new EIN to begin with anyway.
     
  7. Grass Shark

    Grass Shark LawnSite Senior Member
    from Zone 7
    Posts: 661

    Not to many happy endings with partners, every body told me this. I did not want to listen and got burnt 2 times. I said " no, he is like my best friend, he would not do that" HE DID!
     
  8. Daily Lawn/Landscape

    Daily Lawn/Landscape LawnSite Senior Member
    Posts: 694

    Run! Most partnerships end due to $ disagreements. I know of only 1 partnership that stayed together long term. I know of at least 13 that didn't work and the lastest to fail were 2 brothers that had workrd together for over 20 yrs. Started a business back in 2006 and parted ways by late 2008. They now both run seperate successful businesses.

    James
     

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