Ron Lippold
RIP
So for a oo what's the best way to set things up.
Sole propritor s corp . Give me the Low down.
Looking for harpers answer.
Sole propritor s corp . Give me the Low down.
Looking for harpers answer.
Business set up
- Thread starter Ron Lippold
- Start date
boazcan
Member
I'll call Harper and let me him know the answer. He should post after 3 when he gets up.
Ken Snow
RIP
Talk to your CPA or Lawyer. The answer depends on a number of factors, most importantly if you want/need the protection of a corporate status to protect you in case you have a liability beyond your insurance coverage. S, LLC, C, PC etc. can all give you various levels of personal protection an each has advantages and costs associated. Google them and learn Ron.
Mr Clean Carpet
Member
Sole Proprietor- You will have to pay SS tax on all you make up to the cap, if you get sued they can sue for your personal assets
S Corp- You get a paycheck just like an employee, say $25,000 anually. You will pay SS tax on that. All other money you pay yourself is a shareholder dividend and you don't pay SS tax on. If you get sued they can not go after your personal assets.
The choice is clear.
Ezra
S Corp- You get a paycheck just like an employee, say $25,000 anually. You will pay SS tax on that. All other money you pay yourself is a shareholder dividend and you don't pay SS tax on. If you get sued they can not go after your personal assets.
The choice is clear.
Ezra
A
ash_d
Guest
Talk to a local CPA, show him your current and projected numbers.
joe harper
Member
Ron,
Lots of variables to consider.."State Laws"...ect... :!:
If you truly are an O/O...then file accordingly as a Sole Proprietor...
Many of of the "Holiday Inn Express" attorneys here will disagree... KMA!
There is really NO benefit for you to file as a corperation ...There are just a bunch of
frivolous fee's you will incur annually...plus filing 2 tax returns. Insure yourself properly
and file timely with a CPA.
In the unfortunate event you have a MAJOR claim or lawsuit...Your only true defence is Bankruptcy... :!: Any lawyer worth his salt can "pierce the corporate Vail" with little effort.
As a SP...you should always try to stay as liquid as possible. This as simple as having all
LARGE assets TITLED or shared ownership with someone you trust... LIKE!
This will protect you from any litigation of these ITEM'S..The court can NOT force the other party to liquidate these assets in the event of a judgement against YOU.... hey now
By being insured properly...you may be surprised...at what I am about to tell you... I've seen Jimmy naked
If you own your equipment OUTRIGHT.."no liens"..put the BARE MINIMUM allowed by you insurance to operate... :!: :!: :!: :!: This will keep the attorneys off you ASS...Attorneys
will not take LOW policy limit cases... KMA! It is NOT worth there time to litigate...! For them to try to EXCEED you policy limits ...in most states requires a jury trial... LIKE! So..don't put
a TARGET on your back..with MILLOIN dollar policies.. :idea:
If you have more questions...just ask...?
Lots of variables to consider.."State Laws"...ect... :!:
If you truly are an O/O...then file accordingly as a Sole Proprietor...
Many of of the "Holiday Inn Express" attorneys here will disagree... KMA!
There is really NO benefit for you to file as a corperation ...There are just a bunch of
frivolous fee's you will incur annually...plus filing 2 tax returns. Insure yourself properly
and file timely with a CPA.
In the unfortunate event you have a MAJOR claim or lawsuit...Your only true defence is Bankruptcy... :!: Any lawyer worth his salt can "pierce the corporate Vail" with little effort.
As a SP...you should always try to stay as liquid as possible. This as simple as having all
LARGE assets TITLED or shared ownership with someone you trust... LIKE!
This will protect you from any litigation of these ITEM'S..The court can NOT force the other party to liquidate these assets in the event of a judgement against YOU.... hey now
By being insured properly...you may be surprised...at what I am about to tell you... I've seen Jimmy naked
If you own your equipment OUTRIGHT.."no liens"..put the BARE MINIMUM allowed by you insurance to operate... :!: :!: :!: :!: This will keep the attorneys off you ASS...Attorneys
will not take LOW policy limit cases... KMA! It is NOT worth there time to litigate...! For them to try to EXCEED you policy limits ...in most states requires a jury trial... LIKE! So..don't put
a TARGET on your back..with MILLOIN dollar policies.. :idea:
If you have more questions...just ask...?
joe harper
Member
Mr Clean Carpet said:
"Good evening....and welcome to the HoLiDaY iNN.." yes, I really clean up pet shit for a living Dad..
A
ash_d
Guest
Most people know at least one or two cpas and/or attorneys, ask them or as Ken said, google the various alternatives and decide for yourself. Everyone is different, and every STATE is different (remember this sort of thing is typically under State jurisdiction, not Federal). One thing I will say that if you do decide to incorporate, based on my experience (in Texas) an attorney will ask for 600-1,400 to file your incorporation papers for you. I have used legalzoom.com to setup 2 S-Corps and an LLC and it was for a fraction of the price.
EDIT- For the record, my cleaning/restoration business is an S-Corp, in Texas it offers many if not all of the liability protections as a C-corp w/o all the paperwork.
EDIT- For the record, my cleaning/restoration business is an S-Corp, in Texas it offers many if not all of the liability protections as a C-corp w/o all the paperwork.
Ron Lippold
RIP
Thanks Harper
Mr Clean Carpet
Member
HARPER said:Mr Clean Carpet said:
"Good evening....and welcome to the HoLiDaY iNN.." yes, I really clean up pet shit for a living Dad..
I know what I paid in for taxes last year (% wise), why pay more than you need to? Unless you think our govt is better at spending your money than you are!
Dolly Llama
Number 5
Mr Clean Carpet said:
Ezra, that's not how you do it....
You have to ask Harper which Holiday Inn he got his credentials from
or word it sump'um like this maybe;
Dear Mr Kettle.
It's rare to have a CCer that also practices law and accounting nationwide .
A true Renascence man, indeed .
Thanks
hUgs and kiSSes
Mr Pot LIKE!
eat shit! eat shit! eat shit!
..L.T.A.
Mr Clean Carpet
Member
You guys are funny, thats for sure. J/K
Mr Clean Carpet
Member
I would say it depends on the state you live in. In SD there is no state income or corporate tax! hey now And my accountant set up my S Corp (much cheaper than a slick lawyer).
Here is what my Holiday Inn Express degree has tought me. Lets say for example a person makes 100,000 in 2012. All other taxes aside lets just look at SS tax. A sole proprietor will pay 12,400 to uncle sam. A officer of a s corp getting a salary of 25,000 and taking 75,000 in dividends will pay 3100.
Now I realize I'm not a rocket scientist, but I do know basic math (unlike others here giving their opinion), its gonna take a pile of yearly fees to make up for the 9300 you saved.
I didn't make this up it is reality.
Here is what my Holiday Inn Express degree has tought me. Lets say for example a person makes 100,000 in 2012. All other taxes aside lets just look at SS tax. A sole proprietor will pay 12,400 to uncle sam. A officer of a s corp getting a salary of 25,000 and taking 75,000 in dividends will pay 3100.
Now I realize I'm not a rocket scientist, but I do know basic math (unlike others here giving their opinion), its gonna take a pile of yearly fees to make up for the 9300 you saved.
I didn't make this up it is reality.
joe harper
Member
Mr Clean Carpet said:
When is the last time.."IF EVER'..have you filled out your corporate minutes.... :?:
That is what I thought... KMA! YOUR CORPORATE VAIL HAS BEEN PIERCED... :idea:
I will NOW be suing your personally.... -sniff
No need to contact you attorney of record... yes, I really clean up pet shit for a living Dad..
joe harper
Member
Mr Clean Carpet said:
When is the last time.."IF EVER'..have you filled out your corporate minutes.... :?:
That is what I thought... KMA! YOUR CORPORATE VAIL HAS BEEN PIERCED... :idea:
I will NOW be suing your personally.... -sniff
No need to contact you attorney of record... yes, I really clean up pet shit for a living Dad..
ps. Why would you EVER pay taxes on a salary..? All profit or loss flows through to the stockholder... KMA!
If you have a profit...."SPEND IT"... LIKE! or loan the profit back to the corporation as a "stockholder investment..!
Mr Clean Carpet
Member
HARPER said:
WOW boy genius here doesn't need to pay taxes at all.....he makes no profit! Try feeding that line to tghe IRS!
joe harper
Member
I am an IllEgAl iMMaGranT...I don't have to pay taxes... I've seen Jimmy naked
joe harper
Member
floorguy said:
True....!
I assume you are talking about business liability insurance.. :?:
If they spec a higher dollar amount...the rate is not that much difference.
ACE
Member
I just rolled over to a S Corp this Year.
There is defiantly a big learning curve in accounting and tax planning for a S corp. I think it’s the clear path once you get profit above a cretin level. There is lots of tax strategies you can take advantage of with an S Corp like Heath/ Life insurance, 401K, IRA, Cafeteria Plans and Lower Effective tax rates after all the detections. Plus, I can now fire myself and Collect unemployment .
There is defiantly a big learning curve in accounting and tax planning for a S corp. I think it’s the clear path once you get profit above a cretin level. There is lots of tax strategies you can take advantage of with an S Corp like Heath/ Life insurance, 401K, IRA, Cafeteria Plans and Lower Effective tax rates after all the detections. Plus, I can now fire myself and Collect unemployment
.Follow Ken's advice.
I teach a Small Business course at Southern Connecticut State University. My students are required to research and write about the different business forms. Here is some information that you may find helpful, but again, talk to your attorney and your accountant
Dan
BUSINESS FORMS:
1. Sole Proprietorship: A sole proprietorship is a business that is owned and operated by one person (Hatten, 2009).
Advantages:
As a sole proprietor of a company there are many advantages that a proprietor has being the sole owner of their company. Some advantages include independence; this means that the sole proprietor has complete control of the company and the operations and decisions that it makes. The sole proprietor also has control over their company’s location, money, as well as employees. In a sole proprietorship you are the head of the company and do not need to consult partners, stockholders or a board of directors to make difference in your company. A sole proprietorship is also easy to set up and get started; there are less legal requirements as well as restrictions that would increase in a partnership or corporation. As well as the corporation being easy to start it is also easier to close, you are able to liquidate your assets and back out of the company without complications (Hatten, 2009). There are also tax benefits in a sole proprietorship which allows for you to deduct losses from your company out of any other income you have made for the year (Hatten, 2009). The sole proprietorship also allows you to put your own skills and abilities to work in the best way possible and in the right area of your company. A sole proprietorship allows for sole proprietors to have the lifestyle and location they want while being in charge of their own assets.
Disadvantages:
As a sole proprietor there are also some disadvantages to owning your own company. The disadvantages include unlimited liability which means that a sole proprietor is personally liable for all debts incurred by the company (Hatten, 2009). Personal assets such as a sole proprietor’s car and home may have to be liquidated for any debts from their business. Another disadvantage also includes limited resources, this means that because you are only one person you have fewer financial resources then a group of people would be able to collect (Hatten, 2009). There are also limited skills coming into a company, as one person you are only capable of so much and lack all skills needed to run an entire business. This also means because you are only one person there is a lack of continuity in the business, meaning if you get sick or die the business has the potential to cease to exist.
2. Partnership- A partnership is an association of two or more people existing as co-owners of a business for profit. Two people work as a team with their own set of skills in order to bring together a company and gain assets (Hatten, 2009).
Advantages:
As partners of a company there are many advantages for having two people put their skills and assets together to create a business. The first advantage is pooled talent, this means that though you are a valuable asset for your individual skills, having two different sets of skills and perspectives give the company a greater advantage. Partners also have the ability to pool their resources together, meaning they are able to put together additional capital in order to gain more assets for their company. Partnerships are also easy to form, credit is easier to gain in a partnership between a couple to a few people and there is also more experience and expertise in decision making as well (Hatten, 2009). Partnerships also have tax benefits which include partners being taxed as individuals, and profits are taxed only once on each partner’s share of the income (Hatten, 2009). Partnerships hold many advantages when pooling many talents and skills into one company with prior experience as well as assets.
Disadvantages:
As a partnership there can also be many disadvantages to having multiple partners come in on one company. The first disadvantage is that there is unlimited liability, this means that each person in not only limited to the amount of his or her investment but to their partner’s personal property as well, each partner is responsible for 100 percent of all liability for the company (Hatten, 2009). In a partnership there is also a potential for management conflict, future decisions of the company are always at risk as well as conflict of who thinks what is best for the company. There is also the disadvantage of having less independence compared to proprietorships, in a partnership you have to share all decision making and information with partners and can no longer only have your opinion and advice on what the company should do and where it should go. Continuity can also be a problem with a partnership, when a partner dies or backs out of the company, the decision of giving the piece to a family member or selling it to the other partners of the company comes into question (Hatten, 2009). A partnership runs the risk of conflict of interest and managerial arguing over what is best for the company.
4. Sub “S” Corporation: A Sub Corporation is a corporation in which the owners are taxed as partners rather than the corporation being taxed twice (Hatten, 2009).
Advantages:
The S Corporation is able to provide you with the limited liability protection of a corporation while allowing the tax advantages of a partnership (Hatten, 2009). An S Corporation allows for a corporation to avoid double taxation by letting you offset your losses of the business against your personal income tax (Hatten, 2009). Also with an S Corporation income and expenses go to the shareholder’s in proportion to the number of shares they own and they are taxed at their individual income tax rate (Hatten, 2009).
Disadvantages:
An S Corporation can also be disadvantaged because there are many requirements to meet in order to become a Sub Corporation. The first disadvantage is that all shareholders must be residents and there cannot be more than 100 shareholders for the company as well as only enabling one class of common to be issued. The state regulations also specify that the portion of revenue that must be derived from business activity, not from passive investments (Hatten, 2009). An S corporation has strict rules and regulations in order to meet up to all of their standards as well as maintain being an S corporation.
5. Limited Liability Company (LLC): A LLC is a corporation that taxes the owners as partners, but it provides a more flexible structure than an S corporation (Hatten, 2009).
Advantages:
In a Limited Liability Corporation there are limited liability protections installed in a normal corporation as well as tax advantages of a partnership (Hatten, 2009). Being an LLC there are less restrictions than in a corporation which makes them different than an S Corporation. In an LLC shareholders are not owners and they do not represent ownership of the company, rights and responsibilities of members are specified in the operating agreement put out by the LLC when the company is first formed (Hatten, 2009). LLC’s are not held back by the restraining rules and regulations that are put on other corporations. LLC’s allow for flexibility in the internal and external structure of a business.
I teach a Small Business course at Southern Connecticut State University. My students are required to research and write about the different business forms. Here is some information that you may find helpful, but again, talk to your attorney and your accountant
Dan
BUSINESS FORMS:
1. Sole Proprietorship: A sole proprietorship is a business that is owned and operated by one person (Hatten, 2009).
Advantages:
As a sole proprietor of a company there are many advantages that a proprietor has being the sole owner of their company. Some advantages include independence; this means that the sole proprietor has complete control of the company and the operations and decisions that it makes. The sole proprietor also has control over their company’s location, money, as well as employees. In a sole proprietorship you are the head of the company and do not need to consult partners, stockholders or a board of directors to make difference in your company. A sole proprietorship is also easy to set up and get started; there are less legal requirements as well as restrictions that would increase in a partnership or corporation. As well as the corporation being easy to start it is also easier to close, you are able to liquidate your assets and back out of the company without complications (Hatten, 2009). There are also tax benefits in a sole proprietorship which allows for you to deduct losses from your company out of any other income you have made for the year (Hatten, 2009). The sole proprietorship also allows you to put your own skills and abilities to work in the best way possible and in the right area of your company. A sole proprietorship allows for sole proprietors to have the lifestyle and location they want while being in charge of their own assets.
Disadvantages:
As a sole proprietor there are also some disadvantages to owning your own company. The disadvantages include unlimited liability which means that a sole proprietor is personally liable for all debts incurred by the company (Hatten, 2009). Personal assets such as a sole proprietor’s car and home may have to be liquidated for any debts from their business. Another disadvantage also includes limited resources, this means that because you are only one person you have fewer financial resources then a group of people would be able to collect (Hatten, 2009). There are also limited skills coming into a company, as one person you are only capable of so much and lack all skills needed to run an entire business. This also means because you are only one person there is a lack of continuity in the business, meaning if you get sick or die the business has the potential to cease to exist.
2. Partnership- A partnership is an association of two or more people existing as co-owners of a business for profit. Two people work as a team with their own set of skills in order to bring together a company and gain assets (Hatten, 2009).
Advantages:
As partners of a company there are many advantages for having two people put their skills and assets together to create a business. The first advantage is pooled talent, this means that though you are a valuable asset for your individual skills, having two different sets of skills and perspectives give the company a greater advantage. Partners also have the ability to pool their resources together, meaning they are able to put together additional capital in order to gain more assets for their company. Partnerships are also easy to form, credit is easier to gain in a partnership between a couple to a few people and there is also more experience and expertise in decision making as well (Hatten, 2009). Partnerships also have tax benefits which include partners being taxed as individuals, and profits are taxed only once on each partner’s share of the income (Hatten, 2009). Partnerships hold many advantages when pooling many talents and skills into one company with prior experience as well as assets.
Disadvantages:
As a partnership there can also be many disadvantages to having multiple partners come in on one company. The first disadvantage is that there is unlimited liability, this means that each person in not only limited to the amount of his or her investment but to their partner’s personal property as well, each partner is responsible for 100 percent of all liability for the company (Hatten, 2009). In a partnership there is also a potential for management conflict, future decisions of the company are always at risk as well as conflict of who thinks what is best for the company. There is also the disadvantage of having less independence compared to proprietorships, in a partnership you have to share all decision making and information with partners and can no longer only have your opinion and advice on what the company should do and where it should go. Continuity can also be a problem with a partnership, when a partner dies or backs out of the company, the decision of giving the piece to a family member or selling it to the other partners of the company comes into question (Hatten, 2009). A partnership runs the risk of conflict of interest and managerial arguing over what is best for the company.
4. Sub “S” Corporation: A Sub Corporation is a corporation in which the owners are taxed as partners rather than the corporation being taxed twice (Hatten, 2009).
Advantages:
The S Corporation is able to provide you with the limited liability protection of a corporation while allowing the tax advantages of a partnership (Hatten, 2009). An S Corporation allows for a corporation to avoid double taxation by letting you offset your losses of the business against your personal income tax (Hatten, 2009). Also with an S Corporation income and expenses go to the shareholder’s in proportion to the number of shares they own and they are taxed at their individual income tax rate (Hatten, 2009).
Disadvantages:
An S Corporation can also be disadvantaged because there are many requirements to meet in order to become a Sub Corporation. The first disadvantage is that all shareholders must be residents and there cannot be more than 100 shareholders for the company as well as only enabling one class of common to be issued. The state regulations also specify that the portion of revenue that must be derived from business activity, not from passive investments (Hatten, 2009). An S corporation has strict rules and regulations in order to meet up to all of their standards as well as maintain being an S corporation.
5. Limited Liability Company (LLC): A LLC is a corporation that taxes the owners as partners, but it provides a more flexible structure than an S corporation (Hatten, 2009).
Advantages:
In a Limited Liability Corporation there are limited liability protections installed in a normal corporation as well as tax advantages of a partnership (Hatten, 2009). Being an LLC there are less restrictions than in a corporation which makes them different than an S Corporation. In an LLC shareholders are not owners and they do not represent ownership of the company, rights and responsibilities of members are specified in the operating agreement put out by the LLC when the company is first formed (Hatten, 2009). LLC’s are not held back by the restraining rules and regulations that are put on other corporations. LLC’s allow for flexibility in the internal and external structure of a business.
