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How many of you have LLC?

Discussion in 'Business Fundamentals' started by wxmn6, Sep 8, 2003.

  1. wxmn6

    wxmn6 PlowSite.com Addict
    Messages: 1,037

    I am curious how many of you have LLC instead of DBA when you are doing snow/ice services? Any of you that have LLC and do strictly residential with perhaps a small commercial account or two? The reason I am asking is because I am considering about switching over to LLC, but I am not sure if it is an unnecessary step. Right now I only have about 10 residential accounts. And I am looking into expanding and get more accounts. Plus I have 500K in general liability insurance. It probably seems unnecessary but I thought that it would be easier & get the new business name spread around as the year go on. With LLC, if something really bad happened, they cannot take my personal stuff & investments. That sounds good, but the disadvantages are that it is not as easy as DBA and you would be paying more on taxes. I don't know, but do you think LLC is something I should consider or am I just overthinking? Any advice would be appreciated. Thanks.
  2. yako

    yako Member
    Messages: 37

    i would definetly reccomend going llc. it seperates your personal liability, even with insurance with a dba i think you are playing with fire. it is fairly cheap, i would definetly reccomend getting a lawyer to help, though one is not needed. as far as taxes go, that is the beauty of an llc you tax straight through as added income. there is also a few sites on the web that will file for llc for you, i believe them to be under $500. if i run across the sites i will post them. if not do a search on google as i am sure that is how i would have found them.
  3. yako

    yako Member
    Messages: 37

    i believe it will also make you look more professional having the llc tacked on there. if you have john allins managing snow and ice, he talks about the different strutures of business in there which is pretty helpful.
  4. wxmn6

    wxmn6 PlowSite.com Addict
    Messages: 1,037

    Thank you for your input, yako.

    I am surprised that no one else replied to this thread. I guess I can assume that a majority of you don't have LLC.
  5. Snoworks

    Snoworks Senior Member
    Messages: 466

    I would sugest to incorporate as well. However, from what i have heard the LLC is probably not the right fit for your needs. The LLC package was designed for the middle of the road company with 20 to 50 employees'. I think an S corporation would serve you much better!

    Just my 2 cents worth,

    Chuck B.
  6. Michael F

    Michael F Senior Member
    Messages: 203

    I have a S corp.
  7. Little Jay

    Little Jay Senior Member
    Messages: 101

    Go LLC !
    You realy do not end up paying more in taxes. If you do your own personal taxes, buy something like Turbo Tax and it walks you through.
    Ive done our business stuff for years. It takes me 2-3 hours to do all the taxes for my family and business. It easier than you might think.
    And of course the added benefit is what you have already identified-the separation of liabilites.
    You can find an internet company that'll charge you 300-500 dollars to do the paperwork for you.
  8. yako

    yako Member
    Messages: 37

    www.legalzoom.com is th website that i had said will prepare everything for your llc. they are the company i went through and seems to be fairly priced and very dependable.
  9. Randy Scott

    Randy Scott Senior Member
    Messages: 142

    My CPA explained it just the opposite to me. The S Corp. handles more employees better than an LLC.

    Anyhow, wxmn6, just check with an accountant in your area to get the info you need. We became LLC this year with 4 employees. It's a good fit for us right now.
  10. micah79

    micah79 Senior Member
    Messages: 303

    LLC can handle as many employees as you want. Molsen beer company is a LLC. We used legal zoom to do our llc filings. They are a lot cheaper than a lawyer and have many lawyers on staff. Robert Spaperio was cofounder of the company.
  11. buddy markley

    buddy markley Junior Member
    from Ohio
    Messages: 7

    :) First of all I would like to say nice forum here.....

    LLC is a great way to organize, no double taxing your hard earned money in this structure plus you do not have to have meetings and keep minutes like in you do in a corp.
  12. micah79

    micah79 Senior Member
    Messages: 303

    You can have a LLC taxed like a corp, or straight through, just like your dba.
  13. wxmn6

    wxmn6 PlowSite.com Addict
    Messages: 1,037

    If that is the case, then how come do most of us do not have LLC? If the income is only taxed once, then what is the downside than having DBA? :confused:
  14. micah79

    micah79 Senior Member
    Messages: 303

    I don't see one except the initial fees involved in setting one up. Check out your states website and look it up. I went to michigan.gov, and found out anything I wanted to know.
  15. sonjaab

    sonjaab PlowSite.com Addict
    Messages: 1,425

    W........I am also a NYS-S corp. The tax advantages
    are fantastic !
    I LOSE money (the corp.) every year on paper.

    I own the properties, trucks, cars etc. and LEASE
    them to the corp. I make sure the payments are
    the same as what I charge the corp. for the
    lease(s). Sure the money to me
    is treated as income....... but depreciation offsets
    the income and any personal tax increase.
    Its all a total write off for the corp. too.

    Like when the truck or car is paid off...I trade it in
    and keep the money! TAX FREE ! Then buy a new
    one and lease it to the corp. again !

    Same with the buildings....Once paid off...
    I take a improvement loan against it.......
    KEEP the money ! TAX FREE!

    My bar business.....Its all cash money............
    My motel we take credit cards...BUT for cash
    money I will rent ya a room cheap!

    My plowing $$$ is just gravy. My commercial work
    is on the books tho. paid to the corp.

    Insurance is thru the corp. anyway and automatic
    1 mill. in coverage on property, vehicles, etc.
    And its cheaper than most comm. coverage combined.

    What a racket ! Its like printing money !

    I DO have a CPA....So its all legal !.....................geo
    Last edited: Sep 24, 2003
  16. seville009

    seville009 Senior Member
    from CNY
    Messages: 689

    "I DO have a CPA....So its all legal !.....................geo"

    Famous last words....

    Be careful - in the end, the taxpayer (you) are solely liable for
    any potential taxes, interest, and/or penalties.

    With the exception of the cash transactions at the end (which I
    take to mean that you don't report them), there's nothing wrong with what you describe.

    Loan proceeds are (generally) never taxable - that's one of the primary benefits of real estate - you're basically getting equity out without incurring taxes (but you are incurring loan costs).

    The car lease with the S Corp - nothing wrong with that as long as it's at a market rate. The corp deducts the payments and you report the income. If the corp has a loss, you (as the shareholder), can only deduct the loss to the extent that you have basis. That's one of the primary drawbacks of an S Corp that you avoid with an LLC. A LLC provides you with the same protection with respect to liability, so an LLC would be better than an S Corp if you expect to show losses.
  17. sonjaab

    sonjaab PlowSite.com Addict
    Messages: 1,425

    SEVILLE.......You are correct!
    My CPA advises me that the trade in cash money on
    the vehicles has already been taxed and reported
    during the life of the loan/lease agreement period.

    Many banks nowadays have "fee-free" loans for
    certian real estate , even commercial, esp.
    owner occupied situations. I already have up to
    date abstracts, enviromental, surveys, etc. So
    getting those no closing costs loans is a snap !

    I have strong credit and have had this S-corp for
    14 years. Ms. Banker next door knows my

    I am also a MBE/WBE corp. MORE tax advantages!
    Some of you married guys should set up your wife
    as the BOSS (president) of your corp or company!
    (LIKE ME)
    You could BID SKY HIGH on any state, county, fed.
    work and STILL get the job!
    The govt. has to award a certian % of their contracts
    to minority folks ! I think its 10%.........

    I used to be a union painter......The contractors got
    smart and would have 2 corps.! One in the guys name,
    one in the wifes name ! Instant WBE/MBE !!!!!!!!!
    He would bid 1.5 million....She bid 2 million
    Guess who got the job ?
    As long as the general contractor gave out 10%
    of the total bid to a WBE/MBE. They no care !

    FREE money ....................

    My CPA has also said I should go LLC......But I am cool
    where I am at!............geo
    Last edited: Sep 24, 2003
  18. eortheain

    eortheain Junior Member
    Messages: 11


    I'm just getting started in the business, and I ended up choosing to pay $100 to the state of Virginia to register a LLC, which is owned/run jointly by me and my wife.

    My reasons for using a LLC:
    1. Liability -- the LLC creates a distinct legal entity, which will give you some legal protection against being sued and having your personal property at risk.
    2. Taxes. With a LLC, the company's net income is treated and taxed as personal income, i.e. no double taxation.
    3. Government set-asides. The LLC company is owned and run jointly by me and my wife, and qualifies as a woman-owned business, and as such it gets preferences when the government buys.
  19. DanG

    DanG Senior Member
    Messages: 240

    I used to be just a lowly sole proprietor :) but then switched to a S- corp here when my business grew to where i needed employees' to finish all the work i had coming my way.payup

    My wife and I are the only 2 officers/shareholders and we/our attorney set it up so that i was the majority shareholder(51%).Which in hindsight might have been better to do the other way around.


    D.Gowie Enterprises, Inc.
    (my wifes name is Donna so it works for her too) :D