| Benifits of LLC? Should I start one? |
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domskynetlabs
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| Benifits of LLC? Should I start one? |
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I do alot of freelance techwork/network security. I put alot of miles on my car driving corporation to corporation. Is a llc or a c corp a viable option for me are there any pro/cons I need to be aware of. I am a fulltime armed service member but I attend school and work on nights and weekends.
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Tue Feb 08, 2005 9:47 pm |
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maurivildrose
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Location: LIVING IN PARADISE..!! Finally..
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| TIME TIME TIME |
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A native expression here is:
Never hold more than 3 boiling bowls in your hands!
What means thta any bvusiness wil RUN well if u are able to deal perfectly with each.. Do not get BURNED by missing all bowls.
My advice from the paradise!!
DV.
Contact me 4 further INFO..!
Am able to guide thruu the way to Real success just as I did. REAL and Sane Advice...!
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Tue Feb 08, 2005 9:56 pm |
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domskynetlabs
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| Re: TIME TIME TIME |
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I did not get any of that
quote:
Originally posted by maurivildrose
A native expression here is:
Never hold more than 3 boiling bowls in your hands!
What means thta any bvusiness wil RUN well if u are able to deal perfectly with each.. Do not get BURNED by missing all bowls.
My advice from the paradise!!
DV.
Contact me 4 further INFO..!
:)
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Tue Feb 08, 2005 11:10 pm |
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maurivildrose
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well I was tryin to explain something that is completely well knowed.
1st thing to EVALUATE iis "TIME" You say u got a lot of JOB in freelance and more of things to do..
YOU SAY: got ( a lot of freelance techwork/network security. I put alot of miles on my car driving corporation to corporation. Is a llc or a c corp a viable option for me are there any pro/cons I need to be aware of. I am a fulltime armed service member but I attend school and work on nights and weekends.)
and still plannig to STRESS ur life with more ventures and things to care of?
well my advice is not technical is HUMAN..
DO NOT STRESS TOO MUCH..
better way to go is by performing already activities and reducing tjhose in order to be set free..
If this is not useful yet..  we are in different planets man!!
LOL
Am able to guide thruu the way to Real success just as I did. REAL and Sane Advice...!
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Wed Feb 09, 2005 2:21 am |
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Andrew
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Domskynetlabs,
That's a great question.
I'm not an expert on this at all, but I think both could be viable options for you. There are differences in the way they are taxed, etc. LLC seems like it would be easier for a small business because a C Corp is taxed separately (and possibly at a higher tax rate) whereas with LLC income tax is paid by owners individually.
This may be of use...
http://www.laughlinusa.com/llcvscorp.asp
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Wed Feb 09, 2005 2:58 am |
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Mical
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Domskynetlabs,
quote:
Is a llc or a c corp a viable option for me are there any pro/cons I need to be aware of.
Since you are a one man show you need to realize that as a C type corp you would be getting "double taxation" i.e. you would get taxed on the corporate level and also at the personal income level for the same income. A more viable option if you want the protection of a corporation since it is considered a legal entity is an S type Corporation. Instead of the "double taxes" you would only be taxed on the personal level. There would also be a few other things that are different. However this would do fine for what you do.
The LLC will also allow you to be taxed only on the personal level. Unless you plan on bringing in different partners for specific deals you won't neccessarly need this option. Alot of realestate investors use an LLC to protect them from losses they encounter doing deals.
For the best protection of your personal and business assets I prefer a S type corp. On a side note if your company takes off and you want to change it to a C type Corp you can.
Hope this helps a little.
Mical Johnson
www.Debt-Free-Personal-Finance.com
Simple. Creative. Manageable.
Insights Into The Millionaire Mind Set.
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Thu Feb 10, 2005 3:57 pm |
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domskynetlabs
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So a owner of various apartment complexes with tenants would definetly want to create a llc for asset protection?
quote:
Originally posted by Mical
Domskynetlabs,
quote:
Is a llc or a c corp a viable option for me are there any pro/cons I need to be aware of.
Since you are a one man show you need to realize that as a C type corp you would be getting "double taxation" i.e. you would get taxed on the corporate level and also at the personal income level for the same income. A more viable option if you want the protection of a corporation since it is considered a legal entity is an S type Corporation. Instead of the "double taxes" you would only be taxed on the personal level. There would also be a few other things that are different. However this would do fine for what you do.
The LLC will also allow you to be taxed only on the personal level. Unless you plan on bringing in different partners for specific deals you won't neccessarly need this option. Alot of realestate investors use an LLC to protect them from losses they encounter doing deals.
For the best protection of your personal and business assets I prefer a S type corp. On a side note if your company takes off and you want to change it to a C type Corp you can.
Hope this helps a little.
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Fri Feb 11, 2005 6:15 pm |
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BlankenshipFP
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Most definitely. I'd also have a huge umbrella liability policy.
Jim Blankenship, CFP®, EA
Blankenship Financial Planning, Ltd.
www.BlankenshipFinancial.com
Standard IRS Circular 230 Notice Applies
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Sat Feb 12, 2005 4:09 pm |
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Mical
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quote:
So a owner of various apartment complexes with tenants would definetly want to create a llc for asset protection?
Depending on how secure you want to feel, I know of many realestate investors that will form an LLC for each property the own. A few of them take it further since they have a lot of assets. Each property the own in owned by an LLC. Several of the LLC are owned by a Land Trust. The Land Trust is then owned by a Corporation. Each "level" of protection would have its own limits for liability and each level above would include a umbrella policy covering the one below it. If someone wanted to get to your assets not only would they have to come after them one at a time but the policies you have inplace would keep them tied up in court for such a long time that you would be able to move your assets around to protect them from almost anyone.
Bill Gates employees a strategy similar to this and has spent over $100 million dollars putting it in place. He is the richest man in the world who owns nothing and controls everything.
Mical Johnson
www.Debt-Free-Personal-Finance.com
Simple. Creative. Manageable.
Insights Into The Millionaire Mind Set.
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Thu Feb 17, 2005 4:06 pm |
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chiron
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Mical, I think, has provided sound advice a few times over.
I will quickly note that I prefer an "S" corp arrangement for both the taxation reasons Mical noted, and for various other factors, some of which are noted in the link Andrew posted.
Your assets, if I may be so presumptuous, are probably not significant enough to require the need for umbrellas and "landing spots" in the form of multiple LLCs or even C/S corps, which as someone noted are a fiercely powerful way to shield and delay. But this assumes you have assets you feel are significant enough someone might drag your resources through the courts in the first place... which in the case of Mr. Gates, is undoubtedly a very real concern. Wish I could be concerned like that, heh. But to the point, a complex superstructure of holding and trusts and etc assumes you have an army of lawyers on payroll to delay and retreat (if at all) back a layer or two over time - an expense I doubt anyone in this forum would like to hear they've got coming.
I recommend an "S" corp in your particular situation for two reasons. First, the personal assets shield of an "S" corp is nigh impenetrable in comparison to an (uninsured) LLC. With you (I imagine) as the sole or majority shareholder, the biggest concern is less someone taking your business end to task, but that they in so doing breach into ability to claim your personal assets (house, whatever).
Second, given there is usually not a significant operating cost difference to create and operate either one for a small company, it is my opinion that people in general (your potential clients) are much more impressed with a "corporation" than with an "LLC" on small influencers like business cards.
I have no empirical evidence on hand to support this opinion, but just thinking of my own experience, I deal with LLCs much more often when I am dealing with landscaping, mechanics, construction, etc - and I see many more "Corporations" when I am dealing with my taxes, banking, consulting on-site in front of people in suits, etc.
Public and client perception and associative psychology therefore being the brief point of why I tend to lean towards incorporation. By the way, it was noted you can swap from C to S corp status, which is correct, but I think there is some significant time delay in doing so you might want to research...? It may have been a state-related thing, or perhaps it was just advice from the lawyers, I forget the details, it's been a few years since I last converted from one to the other.
All of the above being sort of my experience and opinion, both of which are not always the best, so be sure to check and verify anything I may have said that you find a compelling reason for going either way.
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Sat Feb 19, 2005 10:10 am |
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domskynetlabs
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Thanks for all the great replies what would you recommend if 2 partners and i were to go in on a online business that mostly dropships
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Mon Feb 21, 2005 6:22 am |
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