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C-Corporation, should I????

Discussion in 'Business Operations' started by vntgrcr, Dec 7, 2005.

  1. vntgrcr

    vntgrcr LawnSite Senior Member
    Messages: 282

    I met with my accountant tonight to go over the numbers for the year, luckily I bought enough new equipment this year that it will offset my profit. But, I need to protect my family, assets, etc and need to move from sole proprietor to something. My lawyer said "ask the accountant" and he says to go to a C-Corporation. I become a employee of the corp. The corp. owns all of the equip. and accepts all of the liability, etc. My life with paperwork was very easy for the last 12 years, pay taxes once a year, now I go to quarterly's, paying S.S., etc etc. I guess this is the price we pay for success. Just curious what you guys have to say about going the C-corp route. Thanks
  2. MacLawnCo

    MacLawnCo LawnSite Bronze Member
    Messages: 1,847

    If I am not mistaken, C-corp is generally for much larger operations. Without knowing your size or volume, I would guess from your post that you would fall more into an S-corp. However, an LLC will offer you a combination of both sole P and corp. It is not taxed as a seperate entity yet offers more protection. As an accountant, I would NOT feel comfortable telling you how to form your operation. He should have a say but so should your lawyer... with an emphasis on the lawyers input. Afterall, you are seeking legal protection, not accounting protection. Maybe a conference with both?
  3. Trinity Lawn Care  LLC

    Trinity Lawn Care LLC LawnSite Senior Member
    from NJ
    Messages: 946

    Hey David,

    I am not an accountant or an attorney, so I do not know what is best for your particular situation. However, both my accountant and attorney recommended that I become and LLC. This type of set up is some what in the middle. Many aspects of being a sole proprietor and limited liability. Hence then name limited liability company (LLC). I am not sure if C or LLC would be better for you. Did your accountant mention this form of entity?
  4. vntgrcr

    vntgrcr LawnSite Senior Member
    Messages: 282

    The conference idea is a good one. I meet with the lawyer tomorrow, so we will put it all together. I wish I could just go to work and not worry about all of this other stuff!!!!
  5. MacLawnCo

    MacLawnCo LawnSite Bronze Member
    Messages: 1,847

    this is the good stuff. :) you are running a business. business means number and that puts a huge smile on my face.
  6. Trinity Lawn Care  LLC

    Trinity Lawn Care LLC LawnSite Senior Member
    from NJ
    Messages: 946

    Yeah that sounds like a good solid plan. When I formed my attorney played a huge part in my formation. In fact, my attorney is the one who actually set up the LLC for me. Mac is right, the only companies that I have known to be c-corp are large. I believe that you are definitely on the right track.
  7. alwaysgreener

    alwaysgreener LawnSite Member
    Messages: 52

    A C-corporation is formed as a separate legal entity that can open bank accounts, own property, and do business all under its own name. A C-corporation protects its owners from the potential risks of a business venture gone south because owners are generally not personally responsible for company debts in case of bankruptcy.

    Because the C-corporation is taxed as a separate entity from its shareholders, revenue it earns may be subject to “double taxation.” Therefore, some companies choose to form as S-corporations, which are taxed as “pass-through” entities (like a sole proprietorship or partnership) at the shareholder level. However, C-corporations have greater tax planning flexibility and can shield stockholders from direct tax liabilities.
  8. allinearth

    allinearth LawnSite Senior Member
    Messages: 614

    Sorry but if you just want to go to work and not worry about this stuff work for someone else. I sometimes wish to do the same thing but can't imagine it.
  9. DanaMac

    DanaMac LawnSite Fanatic
    Messages: 13,219

    When I started my company over ten years ago, I met with an accountant. She advised me to go S-corp right from the start and it was just myself then. I couldn't tell ya if it is the right thing to do or not, but it seems to work for me. I trust her and she is still my accountant.
  10. DadsLawnCareInc

    DadsLawnCareInc LawnSite Member
    Messages: 13

    I know this post is kind of old but, I just had to comment. When you form a Corporation the corporation is automatically a C-Corp. You must make a special election with the IRS to be able to report as an S-Corp. A C-Corp is the structure of operation; A S-Corp is the tax filing status. Size does not matter. You can Believe it or not. This has been my experience others may vary. Good Luck, T.M.

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