business structurer?

Discussion in 'Business Operations' started by cutpro2004, Nov 27, 2003.

  1. cutpro2004

    cutpro2004 LawnSite Member
    Messages: 8

    was looking for some advice on the best business structure, as far as sole proprietorship or limited liabilty corp. the reason im asking because currently im operating as a sole proprietor but i was at my lawyers office for something that has nothing to do with business and he came out and said if you have a business the best way to go is limited liabily if your business is going to be a success. i read up on this one person can operate as a limited liabily corp. what do u guys think of this and which way would you go thanks in advance for help .
  2. rodfather

    rodfather LawnSite Fanatic
    Messages: 9,501

    I went LLC a couple of years ago after sitting down for an hour with my biz attorney. Best thing I could have done. BTW, I don't recommend you buy one of those "do-it-yourself" kits on setting up your LLC. Those companies only help you with the paperwork and offer absolutely NO legal advice.
  3. gravedigger5

    gravedigger5 LawnSite Senior Member
    Messages: 505

    Why? What were some of the advantages in your opinion. Just curious. Marc
  4. rodfather

    rodfather LawnSite Fanatic
    Messages: 9,501

    1. Personal protection in case of a lawsuit
    2. Separating me from the company if I want to sell
    3. IMO, helps to establish biz credibility (we're here for the long run).

    I know there are others. It's been 3 years since I went to LLC instead of before as DBA. The hour with my biz attorney (and time spent supplimented with my CPA) told me that was the way to go. Some companies goes C Corp., some S Corp. You won't know until you sit down with someone who knows what's probably best for you.

    Hope that helps some...and Happy Thanksgiving too!
  5. gravedigger5

    gravedigger5 LawnSite Senior Member
    Messages: 505

    Thanks RF, this is something I need to think about in the next year. And I agree time spent with a lawyer on this is money well spent. Marc
  6. Southpaw

    Southpaw LawnSite Member
    from Atlanta
    Messages: 88

    I went to South Charleston HS and WVU. Nice to see you here.

    I have found rodfather to be a great advisor in my short time here. There is no problem being a sole proprietorship for now, but if you want your business to grow and prosper, you will want to take avantage of incorporation. This is my first year in business and I am a sole prop. until the year ends. My wife is a CPA and my business advisor as well. You can go with S corp., C corp. or LLC, but your best advice will come from your CPA first and your attorney second. You must have the trusted advice from an insurance agent as well. No matter what you decide to do, make sure you feel comfortable with all three of these people to give you sound advice.
  7. ELLC

    ELLC LawnSite Member
    Messages: 13

    I looked into this as well in NY, (CNY) where I live. The lawyers here tell me that an LLC does not do anything fore a sole operator. It will only protect the buisness and your assests if an employee screws up. If you are sole operator and have an LLC and you cause damage to property or persons you can be sued personaly and the buisness. LLC does not protect the sole LCO.I went to file for LLC this year and was told this by two seperate lawyers. It sucks that your butt has to hang out in the wind as a sole operator, insurance only goes so far. I am going to go LLC as soon as I get employees down the road.:)
  8. Buckeye1

    Buckeye1 LawnSite Member
    from Ohio
    Messages: 170

    So you are saying that the LLC offers no protection to the members of the LLC? Why would anyone form an LLC if it did not offer protection?

    It is true, anyone can file a lawsuit against anyone for just about any reason. However, if you are operating under an LLC, any personal lawsuits would be thrown out once you show you are operating under that LLC. The only assets at risk are the ones owned by the LLC (mowers, trucks,..). Effectively, this insulates all of your personal assets (home, cars, savings,..). Hence the name Limited Liability Company, and the entire reason to operate under one.

    If you are operating under a Sole prop., all of your personal assets are on the table so to speak in the event of a lawsuit.

    The LLC offers no protection to your business assets, it simply separates your personal assets from your business assets.

    The only exception to the protection an LLC offers in the event you INTENTIONALLY cause harm to someone.
  9. ELLC

    ELLC LawnSite Member
    Messages: 13

    I just placed a call to a corporate lawyer I know to get the lowdown on this. He said the LLC is designed to protect a buisness owner for the error of an employee. If an employee mowes over some rocks and one gets thrown out the discharge and hits a child and the parents sue your business you are personaly protected. The only thing the people can sue is the business, assets of the business, and the worker himself. This protects you from being sued personally. If you are a sole operator and have an LLC and cause injury to someone or their property you can be sued personally for your personal assets and business assets. This is why my business stuff is in my name and my home is in my wifes name. There is alot of misrepresentation of LLC so lawyers can get the money from you. In order to incorporate you have to have officers of the business uless you file for an s-corporation. I wish there was something that can protect the sole proprietor from being sued. Even if you have employees and you are the one that caused the injury you are still liable to a civil lawsuit. This is straight from a corporate lawyer. He said some states differ so this may not all hold true in your state. But make sure you get a good lawyer that specializes in this kind of work. I found many accountants here don't know the difference's in the corporations versus LLC. Look into it where you live and reply to this post so we can see what else people are finding out.
  10. Team Gopher

    Team Gopher LawnSite Platinum Member
    from -
    Messages: 4,040

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