question about incorperating

Discussion in 'Business Operations' started by heavenlydeere, Aug 11, 2005.

  1. heavenlydeere

    heavenlydeere LawnSite Member
    Posts: 109

    i hope someone on here can answer my question. i have around 40 accounts and i was approached by a fellow lco about buying him out, he has around 50
    sounds good, but heres my question, iam going through a bankrupcy on my personal stuff , can i incorperate in my wifes name , so it will be a minority business, and get a business loan in our business name? or will the bankrupcy come into play?? please help someone!!!!
     
  2. wbw

    wbw LawnSite Fanatic
    Posts: 5,516

    on what your wife's credit is like. This "NEW" company will have no credit history so they will be relying on your her's. There are other considerations. I don't expect you to answer this here but consult with an attorney...they are much, much less expensive than not consulting with them. Are you trying to hide or protect assets, etc.?

    There is no simple answer...too many variables. Good luck.
     
  3. JRAZ

    JRAZ LawnSite Member
    from NW
    Posts: 143

    I would meet with an accountant too. A good accountant can help you do many things and will know current tax laws and methods. In general, if you are going to have employees then incorporating is a good idear.

    As far as a sba loan for a woman owned biz it makes it easier. Your wife will need to close the deal with the reps and convince them she is truly the boss and knows what is going on. You will also need a good business plan if you want a biz loan as well as past records. I had that same thought about a year ago to put my wife as the owner to get a good sba loan for some major equipment purchases. I never did go through with it though.
     
  4. Fantasy Lawns

    Fantasy Lawns LawnSite Bronze Member
    Posts: 1,913

    I just received an SBA loan .... it's almost like buying a house .... I finally got this after being inc. for 8 years .... tried the first 3 .... always to get a no

    If your name n hers is on any paper work together the credit score will reflect this

    She can be the Pres n CEO but you too can be an officer .... such as VP or CFO .... n as the Financial Officer of the Inc. be more in the loop than even the CEO needs too be .... as far as answer questions or having input to the business plan

    Gonna need a good CPA with Inc. back ground

    Good Luck
     
  5. mountain man

    mountain man LawnSite Member
    Posts: 141

    Just because an opportunity arises does not mean you have to jump through hoops to make the deal work. If you are going through personal bankruptcy now is probably not the best time to be trying to buy out someone else and take on more debt regardless if you can put it in your wife's name - someone still has to pay off the debt.

    I would suggest trying to grow internally. You can easily open 50 new accounts over the next 1 to 2 seasons and at the end of 2 seasons you have the same numbers but you grow into the larger size. Having personally run a business that almost doubled top line in one year, there are tons of additional issues to deal with from training, more equipment and maintenance, customer service, quality control, as well as having the means to get the work done if it rains 2 or 3 days during the week.

    If you have enough money in reserves to be able to survive 3-6 months without drawing a paycheck, then you could a least consider the buyout. If not which then focus your energies on growing your business from within.
     
  6. bohiaa

    bohiaa LawnSite Fanatic
    Posts: 5,220

    No wait a min Guys.......


    If I understand it correctly, incorporating Means making the Business it's own " Person - So to say "

    Like if something goes wrong and someone wants to sue ya then they can only go after the company and not YOU personally....

    Do I have this right or no?

    I thought it was a MUST...
     
  7. leadarrows

    leadarrows LawnSite Senior Member
    from N/A
    Posts: 925

  8. topsites

    topsites LawnSite Fanatic
    Posts: 21,653

    Well if you're going through bankruptcy then you have hired an attorney and you need to ask said attorney these questions. If you have not hired an attorney, the 500-1000 dollars one pays for this is well worth it.
    But to answer your question to the best of MY knowledge, if you incorporate in YOUR name before the proceedings start, then the incorporation separates YOU from the company period - It doesn't matter if they come after you then they can't touch the CO. and if they go after the CO. then they can't touch you, basically. But I'm no attorney and you really should seek a bit more assistance in that direction as this could be a touchy matter if I am wrong or if you assume whatever and are mistaken.
     
  9. Team Gopher

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

    Hi heavenlydeere,

    Feel free to send your question to our cpa and see what kind of advice he can offer you on this.

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