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Discussion in 'Business Fundamentals' started by theguynextdoor, Feb 4, 2008.

  1. theguynextdoor

    theguynextdoor Senior Member
    Messages: 308

    I have plowed this winter for some neighbors and people I know, and I want to get my company legit in the next few months for landscaping and more snowplowing next year. Just looking for some insight here. I am 18 years old in Western New York, 1 98 dodge ram 2500 for plowing. 6X12 trailor and equipment for landscaping. I won't have any employees. Should I go LLC or INC? What are the advantages to both, taxes, etc. Can I set it up myself. I would rather not pay a lawyer. What do I need to set it up? Also can i get a landscaping/plowing insurance in one package? I'm going to start getting quotes to see if I should switch my insurance.

    Thanks for the help.

    THEGOLDPRO PlowSite Veteran
    Messages: 3,136

    you're better off just going to an accountant that specializes in small business, let him deal with the headachs of setting it all up, its fairly cheap, prolly wont cost you more then 300 bucks to do it all.

    as for insurance thats pretty easy as well. i still have my vehicle insurance through my reg insurance company, and have my business insurance through a diffrent company, they cover both landscaping stuff and plowing.
  3. Dstosh

    Dstosh Senior Member
    Messages: 534

    If you dont have any employees, go with a dba. You should be able to get one at your town hall. Its about 35 bucks. As far as insurance, I would try to go with Erie Niagara. I have both landscaping and Snow removal insurance with them, and its 650 a year. 1,000,000 General Liab.
  4. tch

    tch Junior Member
    from CO
    Messages: 2

    My company is a LLC. I did the paperwork with the state of Colorado over the internet and my tax man did the tax ID # for me. Cost $250 for everything. It is a little more paper work to do but saves on my social security taxes.
  5. SnoFarmer

    SnoFarmer PlowSite Fanatic
    from N,E. MN
    Messages: 9,883

    My company is a LLC also. I did the paperwork with the state of Minnesota over the Internet and the tax ID # I did my self too.

    Talk to an accountant / CPA about the advantages and disadvantages of a LLC, LLP or a CO.
  6. theguynextdoor

    theguynextdoor Senior Member
    Messages: 308

    Thanks Dstosh. I will definitely look into that insurance. Sounds like a great price.

    What is a dba?

    Thanks for the help guys.
  7. SnoFarmer

    SnoFarmer PlowSite Fanatic
    from N,E. MN
    Messages: 9,883

    dba or Doing Business As.

    It is something you can do too.
    It will not separate your personal assets from your business.
    talk to your tax guy, cpa or your lawyer.

    Do you see and business listed or advertised like
    North Shore Plowing DBA?

    or do you see

    North Shore Plowing LLC.?
    There doing business as (dba) but there a limited liability company.
  8. linycctitan

    linycctitan Senior Member
    Messages: 588

    Personally, I'd advise against the DBA for liability reasons. If something bad were to happen, with a dba they can not only go after your business assets they can also go after your personal as well. You should look into either LLC or INC(as an "S" type corp). I set myself up with an "S" type corp because it offers the best tax benifits and completely seperates each entity (business & personal). I used an internet company called INCfile.com. It was very easy. I paid a little extra to "expidite" things & within 2 weeks of starting the process, everything was done including the EIN (or tax id #). I highly recommend them as everything was quick & easy and only ran me between 5-600 bucks (with expiditing!). Keep us posted and best of luck to you.
  9. Snowpower

    Snowpower Senior Member
    Messages: 636

    He's 20 years old probably lives with his parents. Does a few driveways and you want him to form a corporation?



    A sole proprietorship is fine for a while.
  10. QuadPlower

    QuadPlower PlowSite.com Addict
    Messages: 1,056

    Go to the County Clerk and ask for the DBA form. I just renewed mine and it was still $10. Think up and name and they will check to see if it is in use. If not, it is yours. It is good all over, but someone in another county can have the same name.

    Find an independent insurance agency and tell them what you want to do and get a quote. Call around to 2 or 3 of them. Who ever you feel best about go with. You will need 1 million in coverage. List your equipment that has a high replacement cost. Most polices will cover around $10k in stuff. If you have a lawn mower that lists for $6k then put it on. I put my vehicles on it except for the wife's van. Best to have everything on one bill. I pay quartley. Also, if you are plowing or using your truck on a job and have an accident, it is covered. Should be the same or less money than regular insurance.

    Contact your state to see if you need a Tax ID #. Your states web page will have a listing like "starting a business" or something like that. Most of the stuff can be done on line and doesn't cost anything.

    Check into a DOT #. Might be required in your state. Again it can be done on line and doesn't cost anything.

    Get a good accounting software such as QuickBooks and keep track of everything. Most of them will walk you through setting up tax stuff.

    Set up a business checking account. If you shop around you can find a bank that won't require a minimum balance.

    That is all you need to get going.

    Good Luck
  11. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Best time to do it you don't have all the extra expenses right now. It's easier now to keep things separate then trying to do it later.Also if your in it for the long haul banks won't even look at a corp. until it's 3- 5 yrs old.This way your business name is building credit.
  12. dakotasrock

    dakotasrock Senior Member
    from MN
    Messages: 260

    sorry to hijack your thread, but if you form a LLC, can you have your truck just as a business truck, instead of writing a certain percentage off on your personal taxes? When I buy a new truck this summer it'll be my daily driver too, but if i could get it all written off on a LLC, that might be worth it. Or maybe you can't even write it off. I have no idea.
  13. linycctitan

    linycctitan Senior Member
    Messages: 588

    You obviously didn't read his post thoroughly. Yes, he has only done a few driveways this year, but he is looking at getting into landscaping as well. As Grandview said, if he's looking to be in it for the long hual, now is the time to do it. In addition, many people will hire someone who has just started out that is INC, over someone who has been in it for a while but using a DBA (thats the way it is in my area anyway), they seem to feel more comfortable with it. It's not like it's a huge, costly process. It takes 2-6 weeks and $300-$600, well worth it in my opinion. Besides, in NY, if he is a DBA and someone brings a legit suit upon him and he lives with his parents, the parents stand to have their house liened or even lost depending upon the case. If he is INC, he and the business are totally seperate entities, therefore HIS assets can only be jepordized by a civil suit.
  14. Snowpower

    Snowpower Senior Member
    Messages: 636

    Do you even know One small businessman thats ever been sued for some liability issue?


    Sure......do it sometime. But he doesn't have to run out and do it yet.

    If he is still in this crazy business in three years, then re examine it. He has no assets to take and if you think someones going to garnishee his income in the future then fine but that never happens either.
  15. Snowpower

    Snowpower Senior Member
    Messages: 636

    And 9 out of 10 people that start these businesses are out of business within three years.
  16. Chris-R

    Chris-R Senior Member
    Messages: 321

    Snowpower has a good point. If you don't have a whole lot of assets, then you are what creditors consider as "judgment proof." You can't get blood out of a stone. You may want to simply get proper insurance for now and run as a DBA. After a few years if things go well, then you may want to consider either an LLC or Corp. The whole idea of reducing your exposure to creditors can be likened to putting up hurdles. The more hurdles you have, the better insulated you are from creditors. Insurance is a hurdle. An LLC or Corp is another. If you own a home, a homestead is another. For now, simply get out there and make some money. If you're still in business in a few years or if you are ready to buy a house, go see a lawyer who does business law and get your hurdles set up. Remember the old adage, it is a fool who represents himself. See a business lawyer. If you don't, you won't know if things are okay until you get sued, which, of course, is too late to fix something that was done wrong.
  17. SnoFarmer

    SnoFarmer PlowSite Fanatic
    from N,E. MN
    Messages: 9,883

    Get the LLC, LLP, INC, CO, and be done with it.

    So what if your first one fails they will let you start another.

    A DBA is just registering a "name".
    When you register your business (llp llc etc) they will register the name of your business also so you do not need to do a dba when you get your LLC. etc,etc.

    They are wrong the courts are not "creditors" they can seize any asset and garnish any money paid to you for the rest of your life.
    Filing bankruptcy can not make it go away ether..

    Turnips do bleed.

    Then get at least 1/2 million to 1 million in commercial INS and make sure "snow plowing" is listed as an activity that is covered.
    Last edited: Feb 7, 2008
  18. Chris-R

    Chris-R Senior Member
    Messages: 321

    Snowfarmer: (1) I never said that courts were creditors. Please re-read my post. (2) Courts cannot seize any asset they please nor can courts garnish wages for the rest of a person's life. There are limits. (3) A chapter 7 bankruptcy ABSOLUTELY will make such debts go away forever, with the debts NEVER having to be repaid.

    Courts merely render judgments, attachments, etc. after hearing a trial, motion, or accepting a stipulation. The person or entity seeking relief from a court for unpaid debts, defective product claim, slip and fall claim, etc. becomes a "creditor" if they win the case. Court rules and state law dictate what relief creditors are allowed. A judgment is merely a piece of paper and means nothing unless and until it is "perfected." Perfecting a judgment is a whole other topic that needs a few paragraphs to explain. Typically, creditors do not perfect a judgement against a "judgment proof" person for a variety of reasons. As for bankruptcy, there is a pecking order of how the bankrupt's estate is liquidated. Secured creditors and judgment creditors are paid before unsecured creditors. Chapter 7 bankruptcys are a total liquidation of assets with the bankrupt keeping assets allowed by either state law or the Federal bankruptcy law, whichever is better for the bankrupt. For example, in Florida, you can keep your house no matter how much it is worth (state law) but in Massachusetts, you must file a Homestead before filing bankruptcy and then you can keep it so long as the value of the house is under $ 500,000 (different state law). Other assets are allowed to be kept too such as an automobile, tools of your trade, etc. but check your state law to see the list of "exempt" assets. The terms "creditor", "perfected", "judgment proof", "secured creditors", "judgment creditors", etc. are called "terms of art". They have specific legal meanings that non-lawyers do not understand (but some non-lawyers THINK they do).
  19. SnoFarmer

    SnoFarmer PlowSite Fanatic
    from N,E. MN
    Messages: 9,883

    A non-laywer just like you?.......

    Yes, you can choose which assets you choose to default on.
    That is a bankruptcy not a judgment by a court of law.
    That has nothing to do with being found liable in a court.

    You can NOT dispose of a COURTS decision(a ruling) handed down by a judge by filling a bankruptcy
    No bankruptcy judge is going to let that happen.
    .. END of story.

    or no one would have INS as they could just file bankruptcy and not pay for any damages they do..:dizzy:

    If you lost a slip fall case and are fount to have to pay for example $200,000 they will collect that money for the rest of your life if that is what it takes to settle the judgment against you.
    Filling for bankruptcy can not make it go away no matter how hard you try.
    Last edited: Feb 8, 2008
  20. Niteman9

    Niteman9 Senior Member
    Messages: 165

    I don't know a lot about this but I can tell you one thing for sure. I had rental properties and sued someone for not paying rent. I received a judgment which they were making payments on for about a year. Then the payments just stopped. I then received a letter from a court which said the had filed bankruptcy. What relay pissed me off was the letter said they were not including their mortgage in the bankruptcy. How in the heck did they get a mortgage when they had a judgment for not paying rent.