To LLC or not to LLC

Discussion in 'Business Operations' started by Doug Perrone, Dec 19, 2001.

  1. Doug Perrone

    Doug Perrone LawnSite Member
    Messages: 10

    I am a small lawn care business that i do as a part time job. it is only me and another guy that helps me when he can. my business keeps getting bigger and was wondering if this would be a smart move for me to do. i mainly do just cutting and some other odds and ends. thanks for your input.
  2. Kent Lawns

    Kent Lawns LawnSite Senior Member
    from Midwest
    Messages: 870

    Bear in mind there are no correct answers to this question, only opinions, experiences and a list of advantages/disadvantages.

    Simply put, I would not.
    A LLC would protect you from highly unlikely events that have a 1 in a billion chance of happening especially with you as a solo or 2 man operation.

    I would probably get a Employer ID number (38 number) so you can run a legitimate payroll thru a payroll service.

    Then I would get a 1,000,000 umbrella insurance policy that protects you personally and your business operations.
  3. gene gls

    gene gls LawnSite Gold Member
    Messages: 3,213

    Turf magazine has an article in this months edition on LLC and other options.

  4. RMDoyon

    RMDoyon LawnSite Member
    Messages: 230

    One in a billion chance at disaster maybe...

    But for a sole proprietor, the LLC looks like a nice "insurance policy" retaining the simplified record keeping and simialr tax structure of the sole proprietorship while protecting the proprietor's house, cars, savings etc.

    I will be looking into LLC for 2002.

  5. SCL

    SCL LawnSite Senior Member
    Messages: 543

    Ditto to Roger,
    With the latest article in Turf I hae started to think this way , too. My accountant put the bug in my ear last year. For those of us who run skids and backhoes, put up retaining walls and structures, this extra protection seems advisable. I still haven't decided for sure.
  6. sheppard

    sheppard LawnSite Senior Member
    Messages: 542

    The tax avantages and the liability protection for most people outway the benefits of a LLC.

    Had my lawyer draw up all the necessary paperwork- will file the section S myself, and paid him $500.00. What a deal.

  7. SprinklerGuy

    SprinklerGuy LawnSite Bronze Member
    Messages: 1,778

    INcorporate for sure. Not only protection but tax savings as well.

    Just heard from my accountant today, we have only been incorporated 6 months so the first 6 months of the year we were still a sole prop.

    My income went WAY up this year and my tax liability went DOWN due to the incorporating.

    As an S corp you can take disbursments above and beyond your salary, within reason of course, and those disbursements are not subject to SE tax, translated, BIG SAVINGS!
  8. wolfpacklawn

    wolfpacklawn LawnSite Member
    Messages: 120

    S-corp! I agree with incorporating, especially if you are in a state that is corp. friendly like Nevada. Big SE tax savings if you have a good accountant that sets you up right. I incorporated half way through the year and I am saving big time in taxes and the whole process cost me less than $200. It only cost $85 to Inc. in Nevada.
  9. Kent Lawns

    Kent Lawns LawnSite Senior Member
    from Midwest
    Messages: 870

    S corp still pays single-business tax. (Over 250,000)
    Plus you file 2 returns each year.

    I agree it's a great way to go, but not because it's cheaper.
  10. Evan

    Evan LawnSite Member
    Messages: 6

    Billion to one maybe, but I've been cutting grass for 10 years and can't count how many times something has flew out from underneathe one of the mower decks, and then Thanked God that no one was one the receiving end.

    And for those of you that don't believe the damage that can be done with a mower, I threw a rock through the exterior wall of a condo, which knocked over the painting on this side, knocked over the iron on the ironing board and embedded itself in the wall by the phone. Sure that's a one in a billion chance, but let me get through everybody's thick skull it only takes ONE. To this day I still can't fathom the amount of speed/velocity/force behind an object to do so much damage. Not only that just imagine if that rock would have hit someone in the head.

    Plus you factor in all the windows we've broke this year. A minivan, a house window, and a door wall.

    To make a long story short get insurance AND ensure anything it takes to protect yourself and others from accidents.



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