LLC or S-Corp, in Illinois

Discussion in 'Business Operations' started by KCL, Aug 30, 2006.

  1. KCL

    KCL LawnSite Member
    Posts: 61

    What are the positives and negative that you have found about the both of these. Just doing a little research at the time but leaning towards LLC. Thanks.
     
  2. RHayden

    RHayden LawnSite Member
    Posts: 123

    S Corp for us. Mainly for the employee tax benefits for myself.
     
  3. YardPro

    YardPro LawnSite Gold Member
    Posts: 3,563

    we are s corp, mainly becuase when founded there was no LLC.

    seems like llc is the new way to go... same tax benefits but without the legal expenses, meetings, minutes, etc...
     
  4. bigjeeping

    bigjeeping LawnSite Senior Member
    Posts: 903

    A sole member LLC is taxed the same way as a sole proprietorship (no double taxation of company's income and personal income). However, with the LLC you get limited liability by having a seperate business entity from your personal.

    A S-corp is a corporation that is taxed as though it were a partnership - the corporation's income is taxed only as the personal income of stockholders.

    As for difference between LLC and S-corp.. LCC are less restricted and have more flexibility in terms of who can become an owner and who can make management decisions. S-corp is restricted to 75 stock holders.
     
  5. lawnboyblake

    lawnboyblake LawnSite Member
    Posts: 89

    I am also in the same boat. For some unknown reason, My accountant keeps telling me that there is no reason for me to form either an LLC or S-Corp. He said it would be to no advantage to me tax wise. I have a hard time believing this. If that is true, why is it that every other company you see around no matter what trade it is is either an LLC or Corp???? I would love to hear some more opinions on this deal..
     
  6. Mike33

    Mike33 LawnSite Bronze Member
    Posts: 1,649

    Was wondering that also, my accountant tells me to just carry good ins. But i was wondering what would be best in order to have the liability protection, be able to draw un employment in winter months, and pay more in to s.s.
    Mike
     
  7. bigjeeping

    bigjeeping LawnSite Senior Member
    Posts: 903

    If you are a DBA or sole proprietor you are open to UNLIMITED LIABILITY. This can be a very dangerous position to be in if you are sued. They can take everything you own to your name.

    However, forming a sole member LLC (what I am), is very simple, cheap, and will cover your butt if something goes haywire. In my post above you can read that an LLC is taxed the same a sole proprietorship anyway, so what do you have to lose?
     
  8. bigjeeping

    bigjeeping LawnSite Senior Member
    Posts: 903


    Well your account is right, there would be no advantage "TAX WISE" because like I said a thousand times so far in this thread: Sole Member LCC's and sole proprietorships are taxed the same.

    Tax-wise, same, liability-wise different.
     
  9. bigjeeping

    bigjeeping LawnSite Senior Member
    Posts: 903

    Good insurance is a must. If you have employee's you should also carry workers comp insurance incase they get injured. Why would you want to pay MORE into social security??
     
  10. Mike33

    Mike33 LawnSite Bronze Member
    Posts: 1,649

    Yes i do carry good ins. and worker comp even though i only have 1 employee. Everything about my business is legiment , but i was wondering about paying more in to ss. with out the high self employment tax. Also a way to pay my self a salary and be able to draw unemployment in the winter like a regular employee.
    Mike
     

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