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Sole proprietor or llc

lawnbridge

LawnSite Member
Location
Haskell, Texas
Been in business now for 4 years, one man show, mow 45 yards, spraying business about 150. Question is do you guys have your business set up as a sole proprietor or LLC? I have mine set as SP but thinking of switching it. Any thoughts would be appreciated.
 

Rivervalleylawns

LawnSite Member
Location
Oklahoma
Switch it....
Switch it as soon as possible!!!!

A LLC is setting up a small corporation, were you are now known as the president instead of the owner. You will not have any personal guarantee on the business if anything large may arise. Basically you cant be sued rather your business would. There are just to many situations that can arise that could potentially put you in a bad spot.

I am originally from az, where it is a little more complicated and expensive to set up a LLC. I now live in arkasas/oklahoma and it is pretty easy here to set one up. Just look up the secretary of state and you can easily print off all the paperwork you need. Good luck..
 

CrawfordCentury

LawnSite Member
Look into the tax laws of your state. Under an LLC, the 'corporation' pays you a salary. If you net $100k, you'd think that you could pay yourself a salary of $100k.

In NH, they've changed that, saying that they're closing a loophole in the state's tax policy. The state has some say in what a 'fair' salary is - and anything above and beyond that is considered a corporate profit - and subject to taxation.
 

FYS777

LawnSite Silver Member
Location
Central, OR.
LLC is better, just punch it in the computer for you state, or talk to a CPA, but it does separate between personal from biz, if someone sues you !!! and you can write off more
 

jvanvliet

LawnSite Gold Member
Location
South Florida
LLC!!! Sell your equipment to the LLC, write yourself a senior equipment trust cerificate, (the payments on the note are return of capital not income) let it pay your medical, provide yourself with an SEP... LLC all the way. If you have a large LCO, get a good accountant to do it, shelter your income & protect your (|) cause Oslamabama is going to take it all.
 

Hairy Homeowner

LawnSite Member
Location
Michigan
Look into the tax laws of your state. Under an LLC, the 'corporation' pays you a salary. If you net $100k, you'd think that you could pay yourself a salary of $100k.
Actually, you would have to elect for corporate taxation of an LLC.
The default for a single member LLC is 'disregarded entity' which takes you right back to schedule C. The default for a multiple member LLC is to be taxed as a partnership.
If you want corporate treatment, best to file your SS-4 and 2553 as soon as you organize the LLC.
 
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