Sole Proprietor or LLC ?

[whitehorse]

New guy here. wondering about the pro's and con's of Sole propietor vs. LLC. Any help would be appreciated.

[boyd]

For me sole prop. works best. Your tax # is just your SSN.

It makes taxes are very simple.

[GlassStarz]

What about DBA?

[StarQuest]

Whitehorse,

I'm assuming your asking if there's any advantage to forming a corporation for windshield repair? My answer would be absolutely not! Don't waste your time or money. Repair is already a limited liablity business. The worst that could happen someday is possibly running into that one idiot who might try and sue you for cracking his
windshield. Just make sure you carry general liablity insurance.

[Delta Kits]

There are certain tax benefits to having an LLC or Corporation.

If I were you, I would talk to an accountant and have him help you decide...

[GRT]

Tax wise, an S Corp is the best way to go or used to be. But this depends on how much taxable income you have. Corps get taxed at a lower rate than sole P's, but only when you hit a certain level. LLC's are different in different parts of the country I think. I'm not Inc. because my tax level doesn't make it advantageous. In WSR, I think the best reasons to Inc. are: 1) You do a ton of business 2) You are worried about the liability issues 3) You have employees other than family members 4) Inc. looks cool behind your company name. I'm no CPA or tax attorney, so check it out with your accountant.

[mafsu]

I have an s corp. It has been very advantageous as far as taxes go. I probably wouldn't have gone this way, but I had a business partner when I started out and we decided it was better than a partnership. Definitely talk to an accountant or lawyer to check out the pros and cons.

[DaveC]

S-Corps, LLC's, Full-Blown Corps....

This comes from info. provided to me, over the years, by may tax attorney, that used to be an IRS prosecuting attorney, and any statements are based upon MY opinion and should not be contrued to be legal fact!!!

Nutshell, forming any type of corporation can provide personal liability protection. However, at ANY time, if you are audited, sued or any action is taken against your "Corp." and it is determined by the Feds or any Govm't entity that while you had "filed" as a Corp. but were actually acting as an individual/partnership and not meeting the filing status requirements, the Fed's can (and will) legally treat you as an SP/Partnership.

Jeff's Advice is (IMO) close to "on the money." There is NO accountant-client priviledge afforded by law. There is an Attorney-client priv.. So (IMO), rely on the advice of an experienced business/tax Attorney, not a bookkeeper/accountant/CPA. Accountants cover their butts. Attorneys, cover yours!!!

[CPR]

Besides the tax advantage a corporation will save you from creditors and law suits also. I have a friend who does paint touchup and some old man tripped over one of his safety cones he had setup. Got sued and lost, all he had to give up was his old van and paint equipment. Cost him around 6000.00 to start backup again, the judgement was for 250,000.00

Think about it !

[StarQuest]

Jeff and GRT,

Your both right, yes there are tax advantages setting up as a corporation as well as many other benifits. However, I don't believe these savings will offset the cost to a small windshield repair guy.

First off, here in Michigan setting up a LLC will cost between $800-$1000. If for some reason your business does fail and decide to close the corporation there's another $800-$1000 in closing expenses. The next problem is all the extra required tax filings, reports and minute book upkeep once you incorporate. Now you will need to hire a CPA charging between $125-$175 a month just to keep these reports and filings timely. Miss due dates with any of these required reports and quess what? More penalties and interest out of your profits going to Uncle Sam! After being incorporated for 18 years in three different business ventures, I'm sorry....I just don't see the need to incorporate this one!

Also, don't make your decision based on one accountants opinion about incorporating. Find at least five to talk too. Much like attorneys, some are nothing more then little fish swimming around trying to pick the food out of your pocket.

Found a link for you to view for more info this subject. Maybe it will help.


http://www.residual-rewards.com/busines ... pared.html