sole proprietor vs llc

Discussion in 'Starting a Lawn Care Business' started by deitleman, Sep 15, 2009.

  1. deitleman

    deitleman LawnSite Member
    Posts: 31

    Just wondering if most in this business are sole proprietors or an LLC? I've been studying both, and still unsure which way to go. I understand the basic concepts of both, and both seem to have multiple advantages and disadvantages. My equipment is paid for, and I will have insurance, so the only risk I can see is being sued? The taxes seem to favor the SP also. It's just me, no employees, and still pretty small scale. I'd love to get some other opinions and advice on this. Thanks
     
  2. bohiaa

    bohiaa LawnSite Fanatic
    Posts: 5,220

    unless your sitting on a million plus, and or an idiot. or just accident prone. the DBA. will be just fine. after you start gaining assets, and employees an INC or llc will need to be looked at....




    Best of luck
     
  3. ClippersLC

    ClippersLC LawnSite Member
    Posts: 130

    DBA? whats that?
     
  4. JShe8918

    JShe8918 LawnSite Senior Member
    Posts: 941

    I am DBA currently but i plan on going to LLC this winter. This day and time you can't ever be to careful. With unemployment at it's high point people are looking for ways to get money. There are crooks out there that will take you for everything you own. I mean if you hit someone with a rock some how and they sue you and you aren't LLC then they can take everything. House, truck, car, boat, money, anything and everything. I am not sure about the whole tax thing but i would rather protect myself and family by going LLC. To have a lawyer in my area do the filing and setup for you it is $350 plus $75 filing fee or you can talk to your accountant and he/she can tell you how to do it yourself and it only cost you the filing fee of $75. Hope this helps.
     
  5. Jpeg lawn maintenance

    Jpeg lawn maintenance LawnSite Bronze Member
    Posts: 1,638

    DBa is doing buisness as like what you name is say your john doe doing buisness as green valley lawn care something like that thats what it is
     
  6. hackitdown

    hackitdown LawnSite Silver Member
    Posts: 2,490

    I am a DBA, but I carry a large liability policy. I am not sold on the idea that an LLC protects you from lawsuit.
     
  7. bohiaa

    bohiaa LawnSite Fanatic
    Posts: 5,220

    it doesn't,,, true in larger corp's it does. but lets face it, How much damage are you going to do. most of us have 1 million in insurance. that will cover 3 kids. 2 houses. and a fire truck
     
  8. JShe8918

    JShe8918 LawnSite Senior Member
    Posts: 941

    I talked to my accountant and he said your taxes will not change going from DBA to LLC. The only time it changes is if you go to a corporation. He said he isn't really sold on LLC unless you want it for liability reasons. We carry 2 million in liability insurance but that doesnt protect your personal assets. he said he likes S corporation the best for tax purposes. But he said no one should use it really until you make well over 100K. It alows you to have some of your company money not taxed LEGALLY and you are paid salary.
     
  9. Lawn Shark prop mgmt LLC

    Lawn Shark prop mgmt LLC LawnSite Member
    Posts: 64

    I carry 1 mil. coverage as well, but was advised by my lawyer who is also my brother in law to do my business as a LLC. I would advise you to talk to a lawyer as well, he might open your eyes up to the pitfalls of not being personally protected.
     
  10. mowerbrad

    mowerbrad LawnSite Fanatic
    Posts: 6,273

    An LLC will separate your personal assets from your business assets. A DBA does nothing for you to protect you, basically, your business and personal assets are one in the same. Even if you have a $1million liability policy and you are sued, you never know what that will cost you exactly. So if someone were to sue for over $1million, then your insurance won't be able to cover all of it. All the remaining amount will come from your business and personal assest, that means you could lose your truck, equipment, house, "toys", etc. So if you were in a situation like that with an LLC, the most you could lose is your business, not any of your personal assets.

    As far as taxes go, I'm not sure if it is different from state to state but as me being an LLC, I don't get taxed any differently than when I was a DBA. So you do have the initial cost of filing for an LLC, but that is a one time thing. I do not recommend that you file for an LLC yourself. Have your accountant or financial attorney file it for you, as I have been told, often times when you file it yourself you will usually not file all the necessary paperwork, even with the online deals.

    I would say that you should become an LLC. It won't tax you any differently and it will protect you MUCH better than a DBA (not that a DBA actually protects you). You really have nothing to lose by becoming an LLC.

    *******DO GO TALK WITH YOUR ACCOUNTANT/ATTORNEY TO FIGURE OUT WHAT EXACTLY WOULD BE THE BEST FOR YOU.********
     

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