Originally Posted by Steve
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.