LLC or Sole Proprietorship?

Discussion in 'Business Operations' started by SnoMan97, Mar 28, 2005.

  1. SnoMan97

    SnoMan97 LawnSite Member
    Posts: 42

    For now I will be on my own performing only mowing service. And also just part time. Should my service be an LLC or Sole Proprietor? Whats the difference?
    Btw, I am in NJ if that makes a difference.
     
  2. tonygreek

    tonygreek LawnSite Gold Member
    Posts: 3,475

    i can tell you that you might receive good advice, and very bad advice with this question. if you aren't sure about the various ramifications, which i'll guess you're not since you posted the question, consult with an attorney and an accountant. it's a huge decision that could cost, or save you, thousands in taxes dependant upon your elected structure. the other is liability protection, which SP's do not offer, but LLCs do. seriously... ask a professional. :)

    this question has been asked many times on here, so just search in the "elements of business" or "just starting" archives for "sole proprietor" or "llc" or a loose search of both phrases.

    tony
     
  3. jc1

    jc1 LawnSite Bronze Member
    Posts: 1,653

    You can be a single member LLC which is basically a sole proprietorship. That is how I am set up. It gives you more liability protection seperating your private assets from the business's assets. Tax wise it is no different than sole Proprietor. A plus to the LLC is that it makes your business look larger to customers because they have no idea what LLC means.
     
  4. LB1234

    LB1234 LawnSite Gold Member
    Posts: 3,210

    Listen to what he just wrote above...some advice will be sound...others will be dead wrong or perhaps may not fit your needs/requirements...SPEAK TO AN ATTORNEY AND AN ACCOUNTANT!!
     
  5. Grandview

    Grandview LawnSite Gold Member
    from WI
    Posts: 3,251

    I started off as a Sole Proprietership and incorporated several years later. There are more tax advantages with a corportation. I would definitely seek the advice of an accountant to help with this decision.
     
  6. kootoomootoo

    kootoomootoo LawnSite Platinum Member
    Posts: 4,369

    Single member LLC here too. Go to google. search and you will find.
    You dont need to pay lawyers a bunch of money. You dont go to the the doctor everytime you get a cold.
     
  7. snap12.5

    snap12.5 LawnSite Senior Member
    from Ohio
    Posts: 288

    a question for u guys:
    do u have to apply for and take title of a LLC or SP before u buy a truck or additional equipment in order for u to be able to depreciate them.
    if i buy a $10k truck today and take title of my LLC next week, will i be screwed? or do i have to wait for the LLC or SP to come in before i go shopping??? thanks
     
  8. tonygreek

    tonygreek LawnSite Gold Member
    Posts: 3,475

    i'll absolutely agree with this, as in ohio it's a simple 1 pager or so with very little needed to fill out. it's the development of a sound business and tax strategy that should be developed in conjunction with an accountant and attorney. if you plan on a simple, one man operation with no significant growth plans to speak of, knock yourself.

    from a tax strategy standpoint for example, there are certain issues, such as rolling over operating capital into the next tax year that many people may not take into account. do you need money to cover January - March expenses, equipment purchases, or advertising? can you do that as an SP or LLC taxed as an SP?
     
  9. Team Gopher

    Team Gopher LawnSite Platinum Member
    from -
    Posts: 4,041

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