Setting up LLC and business

I've owned several other, unrelated businesses. Four Sub-Chapter 'S' Corps and a Limited Liability Company. Those businesses did substantial volume (millions) and had the potential for very high liability, so I wanted to "hide behind the Corporate veil". Additionally, I had investors, who would not tolerate substantial liability, beyond their investment.



This current venture of mine is intentionally small in comparison. I want this enterprise to be as simple as possible, and it is.



We have Comprehensive, Garage Keepers, and Workman's Compensation Insurance.

Neither I, nor my insurance agent(s) can conceive of circumstances that would exceed the $2 million in coverage that I currently have, so I don't go thru the hassle of setting up a "shell entity". We spend $2500 annually for insurance. Note that almost half of that is for Workman's Comp, so if you don't have employees to start...



We use Quickbooks (highly recommended) for all of our invoicing, purchasingand more. Accountant prepares Payroll and sees that taxes are filed, and paid, in a timely manner. In January I'll give him our Quickbooks files, and he prepares our (joint) 1040, including Schedule C.



Rely on professionals in these fields to get you setup and maintained. It is certainly worth the expense. Then you can focus on what you do best: Customer Service.



Where are you located? Will you be fixed or mobile? Part time to start?



Good Luck!



Jim
 
I do both mobile and fixed (my home), I do part time 9 months, then full time (summer). I have been doing all the work "under the table", and want to evole into more of a business model.



I hear I have to do "something" about setting up a "charter plan" to do an LLC?????



I really want to have the insurance peice of mind, and track my income and expenses, gain some of the tax deductions.



I'm going to get a business license this week so I can get going this year.
 
I had a small (just me) freelance architectural business a few years ago and just did it as a sole proprietor. It didn't really take anything to set up just file a few extra forums at tax time. The bad side was I wouldn't have had any protection if something went wrong. Like Jim said, hire someone to take care of that stuff for you, it's not worth your time and headache. Plus they can do a better job and less than half the time.



Wish you the best of luck with everything!
 
Business license is usually obtained from the county in which the business is based. You can form an LLC etc. through Business Filings. They make it extremely simple and do all the paperwork for you. As for insurance a Garage Keepers Policy is what you probably need. It basically will cover you while the car is in your possession. As for your revenue and costs, keep it simple. I just made a simple Excel spreadsheet for each.
 
Do it in DELAWARE...No state tax. You do not need to live there to do so.



LLC may not be worth it.

LLP if you have partners that are involved in other business ventures.

S-Corp is good for a 1 owner business.
 
jsatek said:
Do it in DELAWARE...No state tax. You do not need to live there to do so.



LLC may not be worth it.

LLP if you have partners that are involved in other business ventures.

S-Corp is good for a 1 owner business.
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Why is an LLC not worth it? It protects your personal assets in the event that someone sues you. The small cost to form one, and the minimal cost per year is well worth it for the protection it gives you. In addition it looks professional next to your business name.
 
I've heard of an S-corp, but hear its similar to an LLC, but more work. Have not heard why it might be better. The tax filings I hear are more.



thanks to everyone, keep the comments coming as I'm sure others will benefit from the info as well.
 
Greg Nichols said:
I've heard of an S-corp, but hear its similar to an LLC, but more work. Have not heard why it might be better. The tax filings I hear are more.



thanks to everyone, keep the comments coming as I'm sure others will benefit from the info as well.
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In both cases the income is taxed on your personal return thru the schedule "E" at whatever your personal tax rate is. The forms are very similar. Some accountants will use a schedule "C" for single ownership LLC's, I find this to be a rare exception.



Discuss with an attorney the differences in liability protection between an LLC and a Sub "S" Corp. There is probably a lot of information on the web if you do a google search, but nothing replaces a personal relationship with your attorney and accountant.



Quickbooks is pretty easy to learn and set up. Costco usually has it on sale during January.



I's also suggest a separate checking account for your business once you have decided on how to structure it. Banks require formal verification of a business entity. (i.e articles of incorporation)



Your state's .gov site can be a very good place to get information on how to file & what the costs in your state are for filing. Most states require that you keep your filing updated and that will also require fees. (Our state is $20.00 for renewals)
 
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