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Llc. Or Inc.

Discussion in 'Starting a Lawn Care Business' started by jfoster, Sep 23, 2005.

  1. jfoster

    jfoster LawnSite Member
    Messages: 6

    I was talking to an attorney today he said alonge with the business lic. and insurance that I should go with like a LLC. company. He was saying if I ever get sued that they could on go for company assets not my personal assets.

    Just wanted to know what ya'll think. :) :)
  2. hoskm01

    hoskm01 LawnSite Fanatic
    Messages: 5,690

    LLC's are great because the income structure "passes through" to your personal income, so only one tax form to file, unlike INC. Inc's are for serious larger businesses with greater employees. Taxes and all the legal stuff are complicated. So I guess it depends on your size and growth. You can always step up to INC later on.
  3. topsites

    topsites LawnSite Fanatic
    Messages: 21,653

    Basically an LLC is a small version of an Inc, perfectly structured for small business and a viable option for any small business owner. Liability-wise, say you demolish a customer's Ferrari with your trailer one day and they sue the crap out of you: They can TAKE your whole business away from you but the LLC protects your personal assets by separating you from the company, so they can't touch your pc or your car... I am not sure how this works with your house such as if you keep your equipment at home, one reason why I've NEVER declared my home for use as business, I want it left alone as well.
    Meanwhile, a sole ownership with OUT the protection of the LLC in the above example, the owner of the Ferrari can now also go after you and yours taking away home, car and furniture. So yes, the LLC factor is well worth the extra 50 or 100 dollars/year it costs in fees.

    A true Inc. is too much for small business, you can do it but the IRS will treat you the same way as a true corporation and you'll never see the end of the paperwork, not to mention you will be in the tax bracket geared towards businesses grossing in excess of 250,000 dollars/year or thereabouts, it will kill you man, save yourself :)
  4. keperkey

    keperkey LawnSite Member
    Messages: 33

    I am not here to give out legal advice and you should contact your own attorney to discuss this, but the highlighted statement below is incorrect. If you are personally responsible for the accident, the LLC does not protect your personal assets. If your employee is responsible for the accident the LLC will protect you. Insurance is your best bet.

  5. Lumberjack

    Lumberjack LawnSite Member
    Messages: 180

    Always remember that you are always liable for any and all damages that you personally cause. There is no way to shield your assets from this. Usually lawyers will go after the deep pockets but since you are a business owner your are by defination rich..... Heavy duty personal liability insurance isnt that expensive. Get some
  6. keperkey

    keperkey LawnSite Member
    Messages: 33

  7. SENClandmower

    SENClandmower LawnSite Member
    Messages: 5

    Take the advice of your attorney if you trust him. LLCs are treated differently in each state and each state has different levels of INC (such as 'S' vs 'C'). In NC (according to the attorneys I have talk with) LLCs DO protect your personnel assets, othewise why pay for state fees. An 'S' corporation is also a pass-through much like a LLC while a 'C' is not. Be sure to research your own state laws regarding incorporations. DO NOT TAKE DIRECT ADVICE ABOUT THIS FROM SOMEONE WHO IS NOT IN YOUR STATE. My company is a LLC and will stay that why until it reaches a predetermined income level that will affect how I am taxed.
  8. 66galaxie

    66galaxie LawnSite Member
    Messages: 10


    Please seek a CPA to answer this question. There may be tax issues with one structure over the other. The only way to safely shied your personal assets is to form an irrevocable trust, which can be costly. I'm not a CPA nor do I own a lawn care company. I am a commercial lender.

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