llc or sole proprietorship

Discussion in 'Business Operations' started by geoscaper, Jan 13, 2005.

  1. geoscaper

    geoscaper LawnSite Member
    Posts: 107

    I did a little research on the topic, but would like to get others opinion on the subject. Pros or cons of each? What type do you have. Thanks.
     
  2. Smithers

    Smithers LawnSite Silver Member
    Posts: 2,265

    i am an S corp. this way if someone sues, they sue the company only. dont know about the other kinds.
     
  3. J Hisch

    J Hisch LawnSite Senior Member
    Posts: 952

    I am a Sub S corporation if you have alot of personal assets then seperate yourself from your company. But remember you will get a pay check just like every one else. With a Individual any profit is yours not as much seperation is needed. I would say if you own a home then incorporate.
     
  4. MMLawn

    MMLawn LawnSite Gold Member
    Posts: 3,569

    LLC is the only way to go and why you are seeing more and more companies using it. With an LLC you have the protection of Incorporation but are not doubled taxed on payroll because that is still treated the same as a Sole Prop.

    Also do not be confused into thinking that either, esp a S Corp will ALWAYS protect your personal assets because any good lawyer will quickly tell you different. Because IF you are the CEO/President of the Corp and esp if you are the only Officer of the Corp then your personal assets could also be at stake in court.
     
  5. fairwayCuts

    fairwayCuts LawnSite Member
    Posts: 161

    Sole proprietor here. When I started up I really did't put to much though into it. It seemed like the cheapest and quickest way to go. Plus, I really don't have any personal assets for someone to sue me for. I have though though in the future, when I'm a bit larger, switching to a corp.
     
  6. Anthony-MB

    Anthony-MB LawnSite Member
    from georgia
    Posts: 109

    i was told that the IRS only recognizes LLCs formed by two or more members; such as husband and wife, parent and child, friends, relatives


    So I'll stay Sole proprietor or go with s corp.
     
  7. MMLawn

    MMLawn LawnSite Gold Member
    Posts: 3,569


    NOT TRUE at all as the IRS has nothing to do with deciding. It is whatever the rules in the State that you incorporate in that determines that as it is the Sec of State in each state that recognize LLC, INC's etc.
     
  8. tonygreek

    tonygreek LawnSite Gold Member
    Posts: 3,477

    mmlawn is absolutely correct regarding the state setting rules for LLC formation.

    as for llc's, you also would have the flexibility to be taxed as an SP, C-Corp or S-Corp.

    and as you've noticed, the best thing to if you have no knowledge of the legalities of forming a company is to talk to an attorney specializing in small biz, as well as an accountant. the accountant is who comes in handy for recommending tax strategies before you open your doors, as well as what tax status you should operate under. the attorney will make recs based on your goals and protection required.

    these boards are great for generalities on the subject, but as you see, everyone has a different scenario that fits them best.

    tony
     
  9. geoscaper

    geoscaper LawnSite Member
    Posts: 107

    Are there any disadvantages to llc's? Good points so far.
     
  10. Team Gopher

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

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