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knosaj
02-08-2012, 08:22 PM
in short, besides protecting my personal properties, how might starting as incorporated help or hurt my business.

i understand that incs are taxed at ower rates.

outside of the business aspects, i mainly want it for how it worls with the name of my business and web site.


thanks.

sorry if im burning the forum up with goofy questions.

Steve
02-09-2012, 02:57 PM
in short, besides protecting my personal properties, how might starting as incorporated help or hurt my business.

I can't see how it would hurt you. There are higher fees with getting a s-corp started though and there is more paperwork. From what I recall you need to have monthly meetings with your executive board and keep minutes of what was discussed. There are other things you may need to do as well.

i understand that incs are taxed at ower rates.

I don't know for sure that is the case. With an s-corp, the profit that flows through to the owner is still taxed as income at the same rate everyone else is.

With the c-corp, the corp gets taxed on it's income and then there is a tax again on your salary so there is more of a double tax. However, I can't remember the last time a lawn care business owner went this route.

outside of the business aspects, i mainly want it for how it worls with the name of my business and web site.

With a corp, you can put things like company, corp, or inc at the end of the business name which you can't do as a dba.

Does this help?

dpld
02-09-2012, 03:41 PM
LLC would be the best route to go and gives you the best of both worlds.

fullblast
02-09-2012, 06:36 PM
I have been looking into a s corp myself. There is a lot more paper work involved with a corp, but depending how you set it up I think it could have some advantages.

I think if you are just looking for some protection and LLC would be the way to go.

Good luck!!

CHEESE2009
02-09-2012, 06:57 PM
Why not just go illegal, take all of the cash, and leave town?

http://profile.ak.fbcdn.net/hprofile-ak-ash2/41784_26814936377_4111237_n.jpg


Then buy a yacht...

knosaj
02-09-2012, 09:05 PM
LOL, Cheese i like the way you think!

really though, i dont know whats stopping the average crook from starting a corp, racking up a bunch of creit or something then bailing.


anyway thanks for the input. i spoke with a finacial / tax guy at work today and he said that an inc could work easily for a small time thing. now, is it the best? not sure.

the real reason i even want the INC is as simple as i want it in the name. silly but true.

i went to the tax office today and filed for a DBA that included INC in the name. at first the lady said i couldnt do it unless i was incorporated, then i told her it was just my name, and was there a legal reason i could. in the end she went ahead and filed it.

once i figure out the ins and out of a true, inc. i might file with the state.

ive got my fingers crossed it doesnt cause me problems legally.

fullblast
02-10-2012, 07:44 AM
Wow. That is hard to believe that they would do that...but then again it is just your name sooo... that should work I guess!!!

Steve
02-10-2012, 03:04 PM
LLC would be the best route to go and gives you the best of both worlds.

Can you give us a little insight as to your thoughts on going with the llc vs other ways such as the s-corp etc?

dpld
02-10-2012, 05:14 PM
Can you give us a little insight as to your thoughts on going with the llc vs other ways such as the s-corp etc?

the easiest way i can explain it is that a LLC gives you the protections of a corporation but it allows you more freedom like a DBA.

for example, when you incorporate you automatically make yourself a officer of the corporation where you are now a employee of your own business.

that is all fine and dandy but when you are starting out you don't generally get a paycheck because you are not yet established financially but you would still and can pay bills with your business checking account and take money as you need it.
as a LLC you can do so without any repercussions just like a DBA i mean the money still needs to be accounted for and if it is not a legitimate business expense it just goes down as personal income.
as a corporation there are rules to how you can for lack of a better word raid the cookie jar.

LLC is easy and cheap and unless you are making millions there is no need to incorporate.
my accountant told me in basic terms that when you inc you are giving up some of your rights to make certain financial decisions in order to get those protections of a straight corp.

Limited Liabillity Corporation is the best way to go as a landscaper or any small to mid sized business.

years ago the only options were a straight up incorporation or a sole proprietor then they added the S corp and then the LLC.

from a credit standpoint there is no benifit and the business will still go off of the owners credit regardless so being a inc is not gonna get you any better chances at getting a loan or having a second line of credit.
furthermore, having a business to a bank is only as good as the tax returns and profit margin.
in most cases being a business owner carries no more weight then being unemployed as far as they are concerned in your abillity to pay a loan off and the only way that will change is if you are fortunate enough to show proof of a business making a good deal of income for a extended period of time.

even selling assets like old equipment is a pain in the butt with a corp.
if it was purchased by the corp everything has to be accounted for.

i am no accountant by any stretch of the word, that is why i use a accountant and i have a very good one who has been at it for 30 years and when he tells me which is better and what i should do, i listen.
hands down he said the LLC option is the best way to go regardless of which state you live in and any good quality accountant would say the same.

some accountants will recommend the straight up corp because it may be easier for them to do as well as they charge more for their tax services for corporations then they do a sole proprietor and a individual.

the whole purpose of little people like us getting incorporated is to provide seperation from our businesses and our personal lives.
such as someone suing your business and end up with your home or your business going belly up and losing your home as well as screwing up your credit.

outside of tax and legal protections there is no other real benefit to a corp over DBA, it won't make you more money, it won't make you more professional and it won't give you any kind of a edge over your competitors.

it will however raise your taxes and create more paperwork but most importantly it will help you to some extent if the crap hits the fan.

finally, i would not make any formal business decisions of this magnitude based on anything i am telling you as well as what you hear from the grape vine.
always talk to a qualified tax preparer because he will know best and that does not include a chain like HR block.

the decision will be one of the most important you make as a business owner so do it well informed and know that LLC,S corp and INC are all corporations but they have different rules and they are not all advantageous to businesses of every kind.

JeffK26
02-10-2012, 10:02 PM
DBA or LLC is the way to go for a small lawn company.

DPLD did the specifics...

I went LLC to protect myself from the business and because you do not have to put LLC behind your name except on official paperwork such as contracts, bank statements or tax forms.

My accountant friend says the basic rule of thumb. ( not a steadfast rule because you can do what you want, but he wouldn't do it type thing. ) you do not want to incorporate unless you have the number of employees have a management team to justify it. A corporation is what the name implies, bigger. LLC is what the name implies...smaller.

Again, it's not a law or a rule, just a basic guideline.

knosaj
02-11-2012, 12:06 AM
I was also told that llc would prob be the best.

Bt again, and maybe I am way out of whack, the ONLY reason I want inc, is for branding purposes. Not business advanages. Once I have everything pinned down I'll post it and you'll know why. Lol, or you can say what a fool. Haha. Right now I think I have a pretty good idea.

I'm not questioning anyone's character, but I have been ripped off way too many times in the world of marketing and graphics. That's why I don't want to post anything premature. Once I have the domain set, which are available, then I'll post what I am thinking and get y'alls input. It would be good to hear others perspectives.

SECTLANDSCAPING
02-11-2012, 02:25 AM
There is a catch with a s-corp. I have a construction friend that uses this format. What would be income is a dividend that is divided amongst shareholders. The shareholders are his family. He avoids most taxes this way. Hes been doing it for 20 years. I tried to pick his brain about it but was only told basic details.

I do know in the past some jurisdictions didnt tax dividends while others taxed at a lower rate. The new 2013 tax rates are the same as regular income.

wandfsmall
02-11-2012, 09:35 AM
I think it is best to talk to an accountant, in one state I operate it is cheaper and better for us to be an LLC in the other a corp is a better and cheaper option to protect yourself. it all depends on what state your in.

LuckyClover
03-04-2012, 11:37 AM
I have the benefit of my Lawyer also being my Brother, so I don’t pay for his time just the costs related to filing. He said “Because you will be doing much of the actual work yourself, it makes no sense to have an LLC... an S-Corp provides far better protection for you. That being said, S-Corps and LLC’s are both "pass through" entities for tax purposes. In other words, they are treated exactly the same for tax purposes.” In most states to set up an S-Corp it's like $300 to register, $200 for the stock shares, $200 for the corporate ledger and maybe $50 or $75 for expedited return of service.

For me the S-Corp made more sense because I not only do Lawn Care, but also Home Improvement and I wanted and needed the added protection. While it is easier and cheaper to set up an LLC vs. a Corp, you should also consider what services you provide, how much you do yourself, and how many employees you have or will have when deciding to set up a business. While an accountant may suggest a LLC, a Lawyer might suggest an S-Corp. as with anything educate yourself before making a decision.