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Registering as a corporation

Discussion in 'Business Operations' started by CastorsLawnCare, Feb 24, 2006.

  1. CastorsLawnCare

    CastorsLawnCare LawnSite Member
    Messages: 8

    I've finally decided to turn my "kid" business into a "real" business. My wife finally graduated from college and got s good (steady) government job so I figure now is the best time to take on the risk. I'm getting ready to register my company and I'm wondering whether I should register is an LLC or an S-corporation. My wife's MBA friends said they think I should register it an S-Corp becasue there is even less liability than with an LLC. I grossed about
    $50K last year and the only real expenses I have are gas. I have all equipment and my truck paid off. I own the company 50/50 with my brother. Is this enough information to figure it out? I'd contact my accountant, but she won't even call me back about my wife's taxes, I think she's a little stressed already in the season.
  2. dsmrolla06

    dsmrolla06 LawnSite Senior Member
    Messages: 305

    I just went through this. My accountant recommended S-Corp, and my lawyer recommended L.L.C. I went with the L.L.C. because an accountant is really just viewing yoru company from a financial standpoint, where my lawyer is trying to keep me out of trouble.
  3. Trinity Lawn Care  LLC

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

    It really depends on a lot of things. With an S-Corp you will be taxed differently. Also, if I am not mistaking you have to take a paycheck and be on a payroll if you will. With an llc you do not have to pay yourself. You can take what is called a "members draw". I am pretty sure that no matter what structure that you choice there is always room for some liability. My attorney and accountant both recommended an llc for me at this stage in the game.
  4. EDEN77

    EDEN77 LawnSite Member
    Messages: 102

    It depends on your state. In PA, my accountant told me an S-corporation was the better way to go than LLC. I don't know about the LLC benefits, but the tax advantages of incorporating are excellent. Pay the up-front costs for either one and then enjoy the rewards.
  5. lawnspecialties

    lawnspecialties LawnSite Silver Member
    Messages: 2,524

    I'm with Trinity on this. I just signed my LLC papers two days ago. My attorney said check with the CPA. The CPA, after looking at my business (similar to yours), said he recommended the LLC. Attorney agreed. Trinity makes some good points for the LLC. It's also supposed to be pretty easy changing an LLC into a corporation whenever you want or need to.
  6. Trinity Lawn Care  LLC

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

    Yes, that is what my attorney told me. That when the business is at a place that we would need to switch to a corp then we could do it at that time. I am sure things are different all over, but I would think that the basics will always apply.
  7. Eclipse

    Eclipse LawnSite Bronze Member
    Messages: 1,149

    For a company that is making quite a bit more money than you are paying yourself an S-Corp is a better way to go.

    From an accounting standpoint an LLC is easier and less expensive to deal with.
  8. vntgrcr

    vntgrcr LawnSite Senior Member
    Messages: 282

    Ok, here is a different view. My accountant advised me to go as a C corp. I just met with him last night to review/ do last years taxes and wanted some reasurrance about going C as opposed to S. In my situation, he is dead sure that it is the way to go. I grossed about @200K last year and as a C I am removed from liability even more than a S. This stuff is still a black art to me, but I do trust him and am going to run with it. I will meet with him once a quarter to review the situation and it should work out. Good luck, I wish all we had to worry about was just working instead of all the goverment B.S. !
  9. muddstopper

    muddstopper LawnSite Silver Member
    Messages: 2,341

    We are S Corp. why i dont know. My lawyer and CPA both said thats the way to go,Then they stuck their hands out and said that well be $500 please.

    If it wasnt for government, I could probably make a decent living.
    This month we paid Insurance, GL and WC and Auto, property taxes, tags, and $12,000 later we still have our income taxes to take care of. AAAAAAHHH!! I hate Febuary.
  10. dsmrolla06

    dsmrolla06 LawnSite Senior Member
    Messages: 305

    Haha, same thing for me. My lawyer got me all set up, well i shouldnt say his lawyer since he didnt do a thing, rather his secretary. Charged me 500 bucks, and it probly didnt take her more than 15-20 minutes to type it up. Maybe im in the wrong business...

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