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is incorporating worth it?

Discussion in 'Business Fundamentals' started by WHITE=GREEN, Dec 18, 2003.


    WHITE=GREEN Senior Member
    Messages: 161

    just wanted to get some opinions from the guys here that are up on the legal issues better than i am. is incorporating a company worth it in the long run, from a tax stand point vs sole proprietorship, from a liability stand point as well. would an LLC or an LLP be better? just wanted to hear some pros and cons.
  2. Sidebuz

    Sidebuz Member
    Messages: 41

    This is my current understanding: the S Corp. was the way to go from a tax and liability point of view (which I am). BUT because of the recent tax law changes, it really doesn't matter vs. a LLC, LLP. The best advice I can give you is this: find a GOOD accountant (they cost more per year, but they keep you out of trouble with Uncle Sam) and a good lawyer/attorney. It is their job to know the "in and outs" of this question. Sorry I can't help more.
  3. plowman777

    plowman777 Senior Member
    Messages: 227

    the llc offers the same protection as a corp but no corp tax. its better, even Chrysler is an llc now
  4. Tim Enix

    Tim Enix Junior Member
    Messages: 12

    Plowman I have to disagree with you, The LLC does not provide the same protection as a Corp that's why it's called a Limited Liability Co. I am INC and file as a S corp for tax purposes, Also I don't know where you heard that Chrysler is a LLC I work for Chrysler and know for a fact that the are a Corp not an LLC.
  5. plowman777

    plowman777 Senior Member
    Messages: 227

    i guess this is what i saw"

    most of the car dealerships are LLC, VOLVO north america is LLC. LLC is the same protection as corp, read about it.
  6. BWinkel

    BWinkel Senior Member
    Messages: 103

    The dealership may be a LLC. But Crystler is a publicly traded company.
  7. ih82plow

    ih82plow Senior Member
    Messages: 107

    Speak to an attorney.

    The vechicles should be held in a holding corperation and you should lease the trucks from the holdings company.What you lease them from the holdings corparation should cover the cost of the truck its insurance and the cost for having a holding company.

    Make your lease payments monthly and have a paper trail of all transactions.The benifit of the holding corp is that there truly is little value of the truck when its new the bank owns it and as it gets older and its depreciated it holds little value.Anyways it just an extra layer to protect your self incase of a lawsuit.If the holding corp gets sued it just loses it assest where as if you get sued you can lose every thing you own.house,investments,you name you can lose it.

    Speak to a buisness accountent you want to isolate your personal assets as much as possible from your company.
  8. alwaysgreen

    alwaysgreen Junior Member
    Messages: 16

    Are you a one man operation? If you have employees running equipment then incorporate,you'll not be held personally responsible for their actions , just the corp. and you could only lose the assets of the corp. but if you're the operator then they can sue the corp. and you personally, and you could lose the business and your house etc.
    One man operations have no benefit from incorporation, but partnerships, and guys with more than one truck do.
    The holding company ideal works ok , the real trick is to put your house and personal cars in your wife's name only, the if they sue you, there's no assets to go after.
  9. ih82plow

    ih82plow Senior Member
    Messages: 107

    I love my wife,I feel we will be together till death do us part.But there are better ways to protect your assets then putting them in her name.

    speak to an accountent they know how to protect us
  10. carlriv2

    carlriv2 Senior Member
    from Mass
    Messages: 126

    There is another benefit to incorporating. If you own propety that the business uses you can rent it to the corportation and that money will not be subject to self employment tax. The IRS frowns upon renting propety to yourself, but the corp is considered a separate entity.
  11. BWinkel

    BWinkel Senior Member
    Messages: 103

    This helps the divorce go alot smoother too. She won't have to hire a nasty lawyer to take everything you have.