Announcement

Collapse
No announcement yet.

new business..sole prop., partner, LLC, corp, ect.

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • new business..sole prop., partner, LLC, corp, ect.

    Well, here’s the deal. I’ve been working as a lawn care foreman/worker the last seven years for a realty management company (apartments and homes). I quit my job last month and am making ends meet working for a friend as a grunt electrician. I’ve got a few grand coming to me next month and plan to buy the same equipment (36”mower, trailer, trimmer, blower, act.) that I was using. With the flexibility I have, I wanted to phase into the lawn mowing business. I figure I need to advertise soon in the yellow pages, and then later in the local environments. Anyway, I would appreciate some input on whether I should start my business as a sole proprietor, partnership, LLC, ect.. I Live in TX, and I’m not sure that matters, but I would appreciate any help. I don’t have a lot of money, so estimated cost of such declarations would also be appreciated. I am also married and a partnership there or to others would be a possibility. Please post or email me your advice. Thanks in advance to all of you for your advice….Turk

  • #2
    If you are going to get a lot of business and partners it is easier and smarter to set up an LLC although people will argue the s-corp may be a better choice but it is more paper work etc.. and will cost a little more to set up the s-corp. Good luck!

    Comment


    • #3
      A smart business plan is what you need ... equipment is so totally not important at this stage. Also being shy of working capital ... is "suicide".

      Aside from that ...welcome to the forum ...

      How many times do we see 90% of landscapers making the same mistakes starting out this way?

      Comment


      • #4
        i just started putting everything together for my lawn business. i'm in central texas. have a buddy who is in austin. one man show, do the usual trim edge and blow, and other jobs as requested. just go to your county clerk and get a DBA, then go to the state comptrollers office in your area and get a sales tax exemption cert. my uncle is an accountant and advised me that the cost and paperwork of setting up a LLC or S-corp is not worth it until you are making over 500000. i'm a ways from that. where are you located at?

        Comment


        • #5
          I have only been in the business since November of this year. However I decided to go ahead and hire an accountant to set up a sub-s corp for my company. It might seem a little expensive at first but I'm hoping that the tax savings will make it worth it. There is also a liability benefit to being a share holder in a corporation instead of a DBA business. I think it would be beneficial to set a little money aside and have a person who specializes and knows the in and outs of the tax code give you advice on how best to protect the company you are building and get the most of your investment. I'm mot sure but I believe you have until the 15th of March to establish a sub s-corp for the upcoming tax year.

          Just my 2 cents.

          BTW it cost about $700 to have my accountant set up the sub-s corp, I also decided to retain him to keep my company's records. I just want to make sure I had someone representing me if the IRS has questions.

          Comment


          • #6
            I just swithched from sole proprieter to LLC last week. I like the protection that an LLC offers against people suing me. I wanted to protect my personal belongings and seperate them from my business. It cost me $400 to set it up at the lawyers office and about 15 minutes. My accountant told me my state also charges $300 a year for the "privelage" of being an LLC. Still worth it to me, no minutes to keep or meetings to hold like an S-Corp. I also have a cleaning company within my business so I wanted some protection.

            Scott

            Comment


            • #7
              Ok, first off guys deciding whether or not to operate as a Sole Proprietorship, Partnership, Corporation, or a Limited Liability Company should be based on the legal and tax benefits you would like to take advantage of, and most importantly understanding what each are. There are some important definitions you should understand that effect each type of formation.

              Pass through entity = taxable to the shareholders, or owners of the business
              Taxable entity = taxable at the company level first then earnings are passed to shareholders or owners where they are taxed again.

              Pass Through Entities:

              Sole Proprietorship = all earnings are passed to owner and taxed on the persons individual taxes.
              -the owner is liable to the full extent of his asset invested in the company as well as personal assets.

              Partnership = all earnings are passed to owner(s) and taxed on the owners individual taxes.
              -the owner(s) are liable to the full extent of his (her) assets invested in the company as well as personal assets.
              -Why would anyone choose this form over an LLC?

              Limited Liability Company (LLC) = all earnings are passed to owner(s) and taxed on the owners taxes.
              - The owners are held liable to the extent they have invested assets in the company.
              - Certain LLC can have shareholders, but IRS can say that the LLC has too many characteristics of a corporation. Can cause IRS to restate income and tax at corporate level and then again at personal level.

              Sub Chapter S Corporation (A.K.A. S Corporation) = Owners/Shareholders are only taxed at the amount that was distributed as a distribution of income or Dividend distribution.
              - As long as owners leave distributions of income/cash/dividends within the company it is un taxed.
              - S Corps allow the similar benefits of a partnership, but maintain the many benefits of associated with Incorporation status.
              - Limited Liability to the extent of corporate assets.

              Taxable Entities:

              Individual = Self explanatory

              Corporations = Separate taxable entity, Share holders or owners are taxed separately
              - Tax effect is a double taxation on earnings
              - The corporation is only liable to the extent of its assets

              Comment


              • #8
                Originally posted by aggiejon2001
                i just started putting everything together for my lawn business. i'm in central texas. have a buddy who is in austin. one man show, do the usual trim edge and blow, and other jobs as requested. just go to your county clerk and get a DBA, then go to the state comptrollers office in your area and get a sales tax exemption cert. my uncle is an accountant and advised me that the cost and paperwork of setting up a LLC or S-corp is not worth it until you are making over 500000. i'm a ways from that. where are you located at?
                If you take the time, you can set up your own S-corp or LLC w/out the help of an accountant, or lawyer, which will save you the money your uncle is talking about. Most of the incorporation process is just paper work that a monkey can do.

                Comment

                Working...
                X