Help me choose my Business Organization

[Phil Nilsson]

Much to do about nothing ... majoring in minors ...

[Elwood]

Maybe "majoring in minors", but a good discussion will lead to increased interest and people who are interested will contact people within their state for further education on the issue.

A Sole Prop. is great for many, but if you feel that protecting yourself from the shark infested pool of trial lawyers and former trial lawyers who now sit on most benches, forming an LLC or another type of INC. may be the best money anyone ever spends.

[Ric]

Maybe "majoring in minors", but a good discussion will lead to increased interest and people who are interested will contact people within their state for further education on the issue.

A Sole Prop. is great for many, but if you feel that protecting yourself from the shark infested pool of trial lawyers and former trial lawyers who now sit on most benches, forming an LLC or another type of INC. may be the best money anyone ever spends.

Elwood

Peace of mind is priceless.

[Phil Nilsson]

If you think setting up under a form of corp will protect you from lawsuits ... check with an attorney because if they are honest and not just after their fees ... lawsuits can and do go beyond biz corps ... like (all the time) ... ... they can get to your personal assets ... every which way but loose.

What you need is liability insurance to pay attorneys fees and damages ... and that's the bottom line on that.

[GrassMaster]

Insurance, Corp, LLC or LSMFT? I'll take Insurance!

If you think setting up under a form of corp will protect you from lawsuits ... check with an attorney because if they are honest and not just after their fees ... lawsuits can and do go beyond biz corps ... like (all the time) ... ... they can get to your personal assets ... every which way but loose.

What you need is liability insurance to pay attorneys fees and damages ... and that's the bottom line on that.

Thank God, Al Gore & Bill Gates, I've been saying that for years...

Phinnally Fill you Da Man!

Insurance is what will protect you, not a Corp, LLC or LSMFT after your company name... If that was the case everybody would get Incorporated & have minimal insurance like they did many many years ago. All that's changed because of people taking advantage of it through loop holes.

As far as being a Sole Proprietor goes it can be in anybodies name just put both yours & your wifes name on all the other Possessions, Titles & Accounts. Then if you get divorced if her name is on it or not she still gets 1/2 or more anyways, if you die she gets it anyways & if the Crack Head down the street wants to run the business well that's OK too because nobody cares as long as your paying everybody something. Then the next year she can get it in her name or whatever nobody cares long as you pay your fair share to the City, County, State & Federal Government.

All I've ever done is got a business license in my name, as much insurance as I thought I needed then I went out, got the work & made the money.

Listen if you have $500,000 in insurance, then the insurance company pays that $500,000, first that's a admission of guilt on your part & your being sued for a million dollars, don't nobody care if you got those letters after your company name or not, those lawyers will get that other $500,000 they will butcher your business until there's nothing left & if they only got $200,000 from the business assets they going to get that other $300,000 even if they have to take your dog to sell at the House of China & snatch that baby bottle out of your babies mouth because milk cost more than gas... They will keep on & on until you are on the street if they want too.

You've never heard of anybody that was Incorporated just get their plows cleaned out & left with nothing? I have several times, take that $400 & buy an extra Million in insurance. Because you might need it worse than a so called tax break or a few extra letters behind your business name... Those letters are a target for lawsuits.

And always report all your earnings & if you think you didn't report enough a few years ago just go ahead & report your past earnings now this year. Our government needs the money really bad.

What I do is when I get paid cash is I wait til the end of the year & what ever the percentage I'm taxed on my earnings, I just take that much plus 5% or 10% extra out in cash maybe a little more & put it in an unmarked envelope & send it to IRS. They already know it was from me...

Let anybody tell you what ever they want to but when you are at fault in a law suit & a family has a lawyer wanting your money & you don't have enough you will be in the street when they ride by in your car, talking on your cell phone taking Spot to the House of China!

There's nothing you can if you didn't have enough insurance to cover your behind except go door to door doing lawn work with your customers equipment until you can buy equipment & start over again... OH if you didn't have enough after they took everything you might still have to pay them back while you are trying to get back on your feet, if they didn't take both of them.

It's not Rocket Science, It's a simple Lawn Service & Landscaping Business & it's all about making money! No more & No less! I don't care what anybody says, I've been there, done that or heard about that & I'm doing just fine!

[Elwood]

Insurance is required, just like Oxygen! LOL

I have seen a few people get sued out of business and they never lost anything personal because the corperation got sued. That protected his personal assets, like his home and wifes car, etc.

I guess it all depends on who has the better attorney??

[bcg]

Phil - You may notice a couple of recurring themes in my advice. One is that just setting up an entity isn't enough, that entity needs to behave in a certain fashion. That means that it needs to follow whatever rules there are for it (like shareholders meetings for corps), maintain reasonable insurance and keep an adequate amount of cash on hand. In other words, it needs to be run like a business in order to expect to be treated as a seperate entity and keep the shield intact. The other advice is that anyone should seek their own prefessional advice on this from both and attorney and an accountant.

GM - You are 100% wrong on this. If a corp (or whatever entity it is) has behaved like a proper business and not some sham that has obviously been setup strictly as a means of avoiding liability, then the personal assets are protected. A plantiff can't just take your personal belongings because the corp ran out of insurance and the judgement isn't satisfied unless the corp hasn't behaved like a seperate entity. Again, anyone should seek their own professional advice before making a decision, not just listen to the people on a message board. There's definitely more to maintaining that shield than just paying the filing fee.

[rogerservesyou]

GM - You are 100% wrong on this. If a corp (or whatever entity it is) has behaved like a proper business and not some sham that has obviously been setup strictly as a means of avoiding liability, then the personal assets are protected. A plantiff can't just take your personal belongings because the corp ran out of insurance and the judgement isn't satisfied unless the corp hasn't behaved like a seperate entity. Again, anyone should seek their own professional advice before making a decision, not just listen to the people on a message board. There's definitely more to maintaining that shield than just paying the filing fee.

Thank you.

[Phil Nilsson]

You can't hide behind a Corporate Entity ... whoever has the Insurance and or assets will get sued as the attorneys go "where the money is" ... they will sue the Corp and the people who own it, work it, employees and etc ... anybody who happens to be (in the action lineup) of events that surround the case.

If the circus elephant goes on a rampage, yes ... even the fly riding the elephants "rear end" at the time of the damage gets sued too ... along with the animal that causes the damage ...

Let this be a lesson to everybody ... call it ... "Being a Victim of Circumstance"

[bcg]

Of course you can be named in the suit. The difference between a proper entity and those that are setup as obvious shams or being setup as a sole prop is that you're going to be personally dismissed from the case by a judge with a proper entity and in the other cases it's going to be all you. Anybody can name anyone to a suit for anything, that doesn't mean that all the defendants are going to stay in the suit. The general practice of a plantiff's attorney is to name everyone that could possibly have any liability in the original petition with the expectation that almost all of them will be removed from the style almost immediately. Again, and I obviously can't stress this enough since we keep arguing the same point, that protection is dependant upon how the entity has behaved. This is why it is so important to have proper professional advice when setting one up and to make sure the behaviour is consistent with a proper entity.

[invincible569]

From: http://www.businessknowhow.com/legal/assets.htm

Many small business owners incorporate because they believe that incorporating will protect their personal assets if they get sued. Unfortunately, however, when you are both the owner and one of the principal employees (or the only employee) in your small company, you often don't gain much of a liability shield by incorporating. Here's why:

Even though you, as a shareholder of your own corporation, may not be responsible for the debts of the corporation (since the corporation is a separate "person"), there is nothing to prevent someone from suing you personally for actions you performed. For instance, suppose you personally created an ad campaign for your corporation criticizing a competitor. The competitor views the campaign as malicious and untrue and decides to sue. They might sue your corporation and you, personally, as the creator of the ad. While you would not be liable for any settlement the corporation has to pay as a result of the suit, your personal assets could be attached to pay off any judgment the competitor won in its case against you the individual.

In addition, even though you might not technically be liable for the corporation's debts, if you owned a very small corporation, chances are you would have to dig into your own personal bankroll to come up with the money to fight the lawsuit.

Thus incorporation does not necessarily prevent liability problems. One important step you can take to help protect your assets against loss is to obtain adequate liability insurance (business property, professional errors and omissions, and product liability).

The other fallacy about incorporation is that somehow it protects you from paying off any bad debts the corporation incurs. But things rarely work that way. While you are not automatically responsible for the corporation's debts the way you would be responsible for your sole proprietorship or partnership debts, rarely will you be able to get a loan for a new small corporation unless you sign a personal guarantee, which means that you, personally, will have to pay back the loan if the corporation defaults. You may also have to sign personal guarantees on building or equipment lease agreements.

Here's another: http://www.entrepreneur.com/Magazine...227013,00.html

[invincible569]

Too bad you dont live in Nevada!

Source: http://www.realbusinessplans.com/mem...orp_report.htm

Why incorporate in Nevada?

No corporate income tax
No taxes on corporate shares
No franchise tax
No personal income tax
No IRS information sharing agreement (only State in the country)
Estate protection
Divorce protection
Nominal annual Fees
Minimal reporting and disclosure requirements
Stockholders are not public record
Stockholders, directors and officers need not live or hold meetings in Nevada - Or even be U.S. citizens!
Directors need not be stockholders
Officers and directors of a Nevada corporation can be protected from personal liability for lawful acts of the corporation.
Nevada corporations may purchase, hold, sell or transfer shares of its own stock.
Nevada corporations may issue stock for capital, services rendered, personal property or real estate, including leases and options. The directors may determine the value of any of these transactions, and their decision is final.

[GrassMaster]

This is what I love about Forums & Message Boards...

We all are unique & different in many ways. We all think Differently & I Love it!

OK, no matter what it is there's loop holes in everything & always will be it's the nature of man. It's their safety net & it will never change...

If lawyers want a certain amount of money from you they are going to get it no matter what, if they break you down to the part where you are homeless & have nothing left. And say they want more they'll just wait until you get a job & garnish your wages.

20, 30 or so years ago if you had a corp you couldn't be touched... That's all changed because so many people took advantage of it & since lawyers created it, insurance companies are in it too. It can be changed & broken at any given time.

OK, we both got a Lawn Service Business, we gross $500,000 a year, both our companies have $500,000 in assets, we both have $500,000 in personal assets. But ... But...

You have $500,000 in Liability. I have $2,000,000 liability which I think is a low figure this day & time but anyway. OK, we both have Johnny Lawn Dud working for us. Johnny burns some Hydro on the way over to Nora Ernst House, Inagaddadivida comes on the Radio, he decides it's crap music & wants to hear who let the Dogs out.

While fiddling with the A/C controls, he realizes that it ain't the radio (Duh), so he's then jacking with the Radio not realizing he's going 55mph in a 35mph zone, he runs a traffic Light & kills Hugh Daresaw while he's taking Duke to the Vet, the car is totaled, Duke got a broke leg & dislocated front left paw. Hugh is laying over there with a door through his side. It was probably a Poorly Built Overheating, Can't Keep the Front End Aligned Gas Guzzling Ford.

Mrs. Daresaw, is really tore up about Duke, it don't matter about Hugh because he's dead as Chit. So she finds a lawyer out of the 250 that were there at the wreck, this Lawyer was part of Gilbert & Montlick. She couldn't see him very well because there were another 500 Doctors there at the wreck because they wanted a piece of that pie & it's a killer pie too!

Mrs. Daresaw sees her & duke moving out of that stupid looking house that Poor Old Ford Hood Ornament Hugh built... Her dream her whole life was to live as a Widow in Gated Community full of Blue hairs like her self, having matching kitchens painted a Mauve Color & those Damn Plantation Shutters on every window & Guttering all the way around her Vinyl sided house.

She says to Lying & Thieving Gilbert, I want payback for what they did to Duke & I need a few $1,000 to have Hugh cremated so I can pour his ashes on that crappy house that He built.

Gilbert decides she can get 1.5 million without much problem because of Johnny Hydro the Electronics Wizard.

2 different scenarios here, Lawns Incorporated goes first. Mrs. Daresaw if you want 1.498 million for Dukes pain & suffering and another $2,000 to cook Hugh with it will be a long hard battle because Lawns Incorporated only has $500,000 in insurance, $500,000 in cooperate assets & $500,000 in personal assets. He's going to fight it & it will take years to clean his plows out and liquidate all his assets. Well do it Gilbert, I want him to pay for what he did to Duke! 2 years later she gets what she's owed to make sure Duke has the proper K9 Lifestyle.

She wishes she could have got the money quicker because Mauve paint is getting out of style & the price of Plantation shutters has went up over 200% because of the War on Peace that the Bush administration had driving the price of gas to $5 a gallon & it takes over a C note to fill up so lazy sit on her behind work at home Mom can take the Dependants to Soccer & get her Red Hair Died Blonde because all the rest of them dye their hair that color too. End of story for Lawns Incorporated.

Johnny thought he had his behind covered by being Incorporated having everything in order, all bases covered, no loop holes & his Lawyer Mr. Ineedmoremoney did too. But Gilbert saw Ineedmoremoney on the Golf Course this is where all your Professionals do their dirty work, because it's the only way they can keep a job because of Limited Training, Education & being brain washed in school. So they are forced to do dishonest things to make theirs & every bodies boat float.

Low & behold there was a loop hole there just after the meeting at the Golf Course there always is, it's the nature of man. Do we let Lawns Incorporated off or do I let Gilbert get me in at a FREE 10% of the new privately owned Surgery Center for Out Patients? It's a No Brainer Ineedmoremoney wants that 10% so there's your loop hole if no other way. Trust me professionals sell out every day of the week!

Scenario #2 the same thing happens to GrassMaster Lawn Service, Sole Proprietor. My Insurance company calls me & tells me that Mrs. Daresaw hires Gilbert of Gilbert & Montlick says they are suing for 1.498 million for Dukes pain & suffering plus $2,000 to put Hugh in the Cooker so his asses to ashes can be spread on that crap hole he built with his own 2 hands.

OK, Mr. Insurance there's no use in fighting it Hydro Johnny shouldn't have been partying on my time & he has a very poor taste in music... Don't you think it's ironic that he was listening to Who let the dogs out?

Yeah GrassMaster what ever, Mr. Insurance I notice a certain tone to your voice, yeah I hate to tell you this but we are canceling your Liability Insurance. I figured that you SOB just give the Heifer the Money, because I feel sorry for Duke to he was Roscoe's best K9 at one of his marriages in the neighborhood behind your house.

I'm now punching in GrassMaster into my Black Berry Phone... Ring Ring Ring, Hello hey PooBear could you get on the Phone & get me 3 Million in liability for our lawn service, yeah they canceled my insurance OK Mr. GrassMaster, did you have a rough day today Mr. GrassMaster, yeah PooBear I told the insurance company to let Mrs. Daresaw have Dukes Blood money... Oh I'm sorry Mr. GrassMaster & guess what I got a big surprise for you... What is it PooBear...

Guess what I'm going to be wearing when you get home... I dunno PooBear, did you get that Pamela Anderson Mask off the Internet, nope smart ass, did you find that Katie Holmes mask Alright I love that one, nope remember you ate that Mask... I dunno honey I got to cut Mrs. Ernst grass, I'm kind of in a Hurray... Ok I'm wearing your Favorite, Mayhaw Jelly...

YEEEEHA! PooBear, Your Favorite Redneck is flying home Mrs. Ernst can wait, Boy oh Boy I'm glad I got that Extra Million with that $400, instead of forming a corp! End of GrassMasters business day!

BTW: I have a Buddy in Atlanter, JawJa that's been my best friend since age 12 that's 38 plus years and he's been a CPA aka Hatchet man for the Head Coca Cola office in Miami before it closed down, Hertz Rent a Car, Southern Munitions Corp & many other places. He has many stories to tell & he can rip contracts, lawyers & insurance companies & their lawyers apart faster than you can shred them up & bale them to ship out of the country!

Just as my buddy told me many times get a lot of Liability to cover your behind because your going to need it. Loop holes are a dime a dozen because they are man made!

I dunno who's right & who's wrong because I've never been in that situation and it would be rude of me to speculate, but I know for a fact if I have enough insurance my behind is covered. If I don't have enough insurance I'm SOL!

We have different ideas on who's right & who's wrong, we've voiced our opinions. I say let it stay as it lay. Let every body decide which is best?

[Elwood]

Too bad you dont live in Nevada!

If every state had billions in casino revenue every 10 seconds, we would have laws like that too!! LOL