Partnership into single owner LLC

[HemiSize]

Well I'm gonna be down a partner in a few weeks so I'm wondering if I have to change my business status as a partnership. If so then I'm thinking it would be best to reform as a single owner LLC. I'm thinking that I'm going to have to disolve my current company and start all over. My questions are...

1. Will I need to pay income tax on the money's that I close out of my Partnership Company and re invest on in my new LLC?

2. Does anyone have any recomendations on how to make this transition smother as far as keeping my customer base?

3. Does anyone have any recomendations in general?

I just hit the wall fellas any help is greatly appreciated.

[Allan]

1. Talk to an accountant about that one.

2. Tell them as little as possible - like that there will be a different name on the invoice but their service will remain the same. They won't care as long as things don't change for them.

3. The lawns are almost done. Maintain what you have and get ready for leaf season. Go extreme on the advertising and hire a helper or two. In most places, I think that it would be reasonable for you to net $750 per day doing leaves. That is just a suggestion though. The point is that you need to hit things twice as hard. It is not the time to roll over and die. It is the time to fight.

[wrestlingcoach]

Need a little more info?

are you buying out your partner?

are you just splitting up evenly?

I am currently waiting to buy out my partner( he wants to get into sales). I talked to my accountant and she said that the money to buy him out let's say $15,000, he has to pay taxes on that and I get to count that as an expense. All the stuff we did to the point of the buyout will be split and we have to pay taxes on but with the buyout part of the taexs I have to pay will cancel out the profit.

hope that helps

[RRS]

The only recommendation I can offer is to get an accountant if you don't already have one.

My accountant has been a blessing for my business. Get them to setup a personal and business budget for you as well as setup your LLC.

I really don't know too much about business, but my accountant put together a budget for me that's fool proof. I would've probably figured it all out over time through trial and error, but I would've suffered along the way. Plus, I never would've been able to plan as far ahead as the accountant did.

All I have to do is make sure I do a set amount of sales each month to cover my overhead and everything else falls in place.

Some months I'll pull an insanely high bid out of my azz and cover sales for a few weeks with a two day job. The residual income coming in from the annual maintenance accounts just about covers my monthly sales now, so during times like this (when it's 100+ degrees out) we can take a day or two off and not worry that we won't cover sales for the month. And, on the flipside when everyone wants hours we can work our butt's off and exceed monthly sales and go do something fun like we're going to tomorrow afternoon to get out of the heat (indoor go-carts).

If I didn't have a budget set up I'd be flying by the seat of my pants like I did my first 1 1/2 years.

So get an accountant!

[Team Gopher]

Hi HemiSize,

If your partner is just leaving the business, would your customers even notice? It's possible they won't.

[HemiSize]

Wow guys thanks for all the advice. I'm not splitting the business with him 50-50 I was always the majority owner at 60-40.

Accountant?... My worry is that its going to be very expensive to get all set up like the rest of you.

Expenses?... I need a Trailer and an 36" to get out of the lowballing slums I think I'm headed since the departure of my partner.

I do have a few names that have been recomended to me so I'm gonna give em a call about the accounting stuff and see if I can work something out within my budget.

Thanks again guys... and Allan dont worry man I'm no quiter...