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Discussion in 'Business Fundamentals' started by Theshoemaker, Mar 16, 2009.

  1. Theshoemaker

    Theshoemaker Senior Member
    Messages: 210

    Hello, just looking for some insight as which might be best for me. I plan on starting a small buisness where i am the owner with no employees. I was thinking about a llc so in case a slip n fall or something happens i can't get sued/ ruined. So i guess i'm asking which would be better a llc or sole properitorship?? I don't paln on going really really big anytime soon but i do plan on managing a few descent sized lots. Thanks
  2. ColumbiaLand

    ColumbiaLand Senior Member
    Messages: 790

    Class S Corporation If Your Ever Going To Have Employees
  3. Ipushsnow

    Ipushsnow Senior Member
    Messages: 314

    Sole proprietor LLC. Protected, paperwork easy, and if you ever do hire employees that's easy too.
  4. linycctitan

    linycctitan Senior Member
    Messages: 588

    x2 for the S-Corp. Tax structure is much more pocket friendly than LLC or dba (sole proprietor). Plus much easier to grow with.
  5. articstorm

    articstorm Member
    Messages: 31

    I don't have enough information about the differances of the LLC and S-corp, but I do want to share that if you screw something up and you think your name is not going to be on the suit along with your LLC your crazy. Attorneys will go after anything they want and your name will be on the suit. INSURANCE is what will save your butt. DBA is far cheaper and easier than both.
  6. mullis56

    mullis56 Senior Member
    from Indiana
    Messages: 824

    S-Corp, set yourself up as employee.
  7. GPS

    GPS Senior Member
    from MA
    Messages: 268

    I completely agree. Liability insurance is the ONLY thing that will offer a buffer-zone from your personal assets.
    If you think they cant take it all because you dont have any assets, you'd be wrong there too. That's what a "structured settlement" is. They can take from your future earnings as long as it takes to get whatever was awarded.

    There are plenty of benefits to business ownership, but separation from your personal assets isn't necessarily one of them.
  8. linycctitan

    linycctitan Senior Member
    Messages: 588

    Find yourself a good local business attorney and ask them to explain the differences if you can not find enough info online. There is no best business structure for everyone, it depends on what you are looking to do. If you will be making more than $5k/year than a DBA will kill you with taxes and personal liability remains heavy. With a corporation (LLC or S-Corp) and the RIGHT insurance, your tax benifits are much better and your personal assets are much better protected. Yes, they can try to sue you personally, but with the proper business structure, record keeping and insurances in place, you have to be found grossly negligent on a personal level for them to have a chance at winning a suit against your personal assets. There is plenty of information out there, make sure you do all your homework and understand everything clearly before you make any decisions, and most importantly, if it doesn't feel right, or you don't feel comfortable then you need to do more research. Best wishes!!
  9. hairygary

    hairygary Senior Member
    Messages: 149

    You can do an LLC, with an S-Corp elect. The best of both worlds.
  10. QuadPlower

    QuadPlower PlowSite.com Addict
    Messages: 1,056

    Like said above, Insurance, not you business type will protect you from loosing your house in the event of being suied.

    Business type has to do with taxes. I have only been an DBA. I have 2-4 part time employees. It is very easy. I do my own taxes, payroll, billing, etc. I may be paying more taxes, but I enjoy the control I have over MY business.

    I am considering going to a LLC S-Corp this year. I have gained enough full time lawn maintenance and installation work that I'm making (in my opinion) pretty good money and the taxe benifits are there. It also looks a little better having LLC behind your name.

    At your stage, I would recommend DBA. Build up a base, make some money, get some employees and then move up.

    I also have 3 million in liability insurance which my City and HOA require me to have.
  11. BigLou80

    BigLou80 Senior Member
    Messages: 558

    you sure about that ?

    I thought you could do a C corp with a S corp elect. Maybe it varies by state.
  12. snocrete

    snocrete Banned
    Messages: 2,862

    this is good advice..................to say that being incorporated gives you no more protection "personally" than a DBA, is just down right ignorant!!!!!! Yes, insurance is a major biggie, but there is far more protection to you pesonally through a corp. than DBA..........this is something your accountant and attorney would know what best suits you.
  13. hairygary

    hairygary Senior Member
    Messages: 149

    Yes, you file as an LLC and complete the S corp election at any time at later date. Here is the S-corp form to file

    Here is the instructions for the form

    If you really want to file as an S-corp I would do that initially, but if you want to start as an LLC for ease of paperwork and then change to an S-corp elect as your company grows, this is a good way.
  14. terrapro

    terrapro PlowSite Veteran
    from MI
    Messages: 3,912

    some sound advice already posted. Insurance Insurance Insurance...

    A good attorney will sue the biz, you, the Ins. company, your wife, your parents, your grandparents, your kids, and your dog. Business structure maters only little in liability protection, it does matter but only little. Keep lots of records and follow safe business practices and you will be fine.
  15. Longae29

    Longae29 PlowSite.com Addict
    Messages: 1,953

    Small businesses that are S Corporations tend to pay a much higher effective federal income tax rate than sole proprietors do, according to the Small Business Administration's Office of Advocacy. Profits at both types of buisinesses are taxed at the individual level but sole proprietors pay an average effective rate of 13.3% while S corps pay an average of 23.6%
  16. harmonsmith

    harmonsmith Junior Member
    Messages: 1

    Sole proprietors are not personally protected from any debts and liabilities of the business.
    For many reasons business incorporation is the safest, smartest choice for structuring a new business. Protection of personal finances, ease of attracting investors, and the tax advantages of corporations are all good reasons to consider incorporating a business rather than simply going it alone
    Incorporating a business also means that your corporation can deduct business operating and capital losses with more ease than a sole proprietor can.Incorporating a business can also help your retirement plans. A corporation can set up a 401(k) that would allow the owner to put in a higher amount of income than just a standard IRA would.There are several online services available that can help with incorporating your business in one state or several. I recommend you clickandinc in this regard who are business incorporation specialist. That's way the process will be lot easier.
  17. Stan

    Stan Senior Member
    Messages: 579

    Great thread, glad I found this. I am in the same situation as shoemaker. I have some questions as well. I am in the process of purchasing 2 more trucks. I am keeping the other 2 trucks in my name for now. I really do not want to do the workmans comp thing at this point.
    I am assuming the vehicles need to be registered in the corp's ot llc name.
    Is workmans comp manditory if I claim no employees?
    How much is the "slip & fall" liability insurance and where do I get this? How much $ anually?
    After all is said what will this cost me?
  18. ptllandscapeIL

    ptllandscapeIL Senior Member
    Messages: 495

    ummm hahaha whoever said you have more at risk through a corp personally is down right ignorant! with a sole prop everythign is in ur name falls on you no business protection! basicly u use an alias or DBA in a INC your an officer of the company and ur checks and documents ect u sign as ur postion for ex mike smith, President and ur equimwnt put it in the company name there is loops if you have a lawyer and hes a "commerical" lawyer he can explain all the ins and outs
  19. kurtandshan

    kurtandshan Senior Member
    Messages: 323

    Hi all, need some advice. I am in the process of determining whether to start up an unrelated business to my snow removal. My question is: If any of you have business partners/investors if you do how to divide up compensation vs work? To clarify, if I start this s-corp with a partner and we both invest same amount of capital, and I end up with the vast brunt of workload because my partner has another company to run how would you divide this up?
    I know its all about agreement, but I am looking for experience related answers.
  20. asps4u

    asps4u Senior Member
    Messages: 543

    Good Luck, and remember you can never be over insured