# question about starting LLC



## stangman35 (Feb 9, 2007)

Im trying to decide if it is worth being an LLC.What are the advantages and disadvanatages of it.

Right now all it would be for is the plowing,I have a normal job the rest of the time.

Any info would be great.

Thanks Mike


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## SnoFarmer (Oct 15, 2004)

Your profile says you are a farmer, but you have a regular job too?

Is your farm set up as an business?

maybe this thread can answer some of your questions.http://www.plowsite.com/showthread.php?t=41867


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## grandview (Oct 9, 2005)

It really doesn't matter what your "other" job is. When your plowing you need to be protected if anything happens i.e. insurance.


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## stangman35 (Feb 9, 2007)

I work for a large farm,dont own it.

Sorry.

Insurance is a must either way.I just wondered what the benifets are


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## SnoFarmer (Oct 15, 2004)

grandview;401616 said:


> It really doesn't matter what your "other" job is. When your plowing you need to be protected if anything happens i.e. insurance.


Sure it does if he owned the farm it would be set up as a business allready and this business could also offer snow removel/plowing.

Here is some info from the thread /link i posted,

FROM< 
plowman350 
QUOTE,

Never A Dba

I started my lawn/snow company as a DBA. A quick story to explain why I switched to an S Corp:

One day I was cutting a new lawn in the summer that hadn't been cut in weeks. There was a public water access pipe under the 8" of grass that I didn't see. Ran it over with my Zero-Turn mower. It sliced right through the 1 inch pipe like a twig and sent it flying into the street. On the other side of the street there was a little girl riding her bike. If it had hit her, it could have killed her instantly, and with a DBA I would have been personally sued. Every dollar I made for the rest of my life would have been to pay off my lawsuit. If you have a corp or LLC, then only the business assets can be taken in a lawsuit. They can't attack your personal assets or your home.

An S corp offers "pass through taxation" which means that all net profit is added to your personal tax return as taxable income at your personal rate. LLC's are easier to handle as far as record-keeping, but I have been surprised by a little fact. for an S corp you're forced to show balance sheets and income statements which can easily be done yourself on a spreadsheet. I bring it up to speed monthly, and it has forced me to take a closer look each month at what I'm spending, and what I'm brining in. It forces you to identify the finanical flows of your business, and helps you run it more efficiently. Also, an S corp has "shares" just like any other stock company. This makes it much smoother when you decide to sell your business, or bring in a partner. It also shows a larger separation from your personal finances, which makes it much harder for someone to sue you personally for things done by the corporation.

With an S corp you need a board of directors. As the President of the corporation you can decide that you and your wife are the directors. You're president, and she's an officer. you are required to meet annually to discuss the future of the company. So, if you ever get audited, you jump on your computer, and write down some of the things you've talked about, and decisions you've made for your company. Hit print and you're all set. Or keep a log book throughout the year of decisions you've made and things you've talked about. On Valentine's day take your wife out to dinner and discuss some of the things you've done in the past year, and things you're going to do next year. There's your annual meeting, and you have the notes to back it up.

UNQUOTE..

"LLC" or a "Corp" will separate your personal assets from your business assets.

I think you will be fine with an LLC but I'm sure othere will give there thoughts also.


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## grandview (Oct 9, 2005)

That's kind of like all your eggs in one basket. You should keep all your business separate. If you run an old lady over you don't want her taking your cows.


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## stangman35 (Feb 9, 2007)

Thanks for the link,iv been reading through it.Im just tring to figure out if it will help with writing off things like the plow,fuel costs,ect.

Its not so much for the liabilty standpoint,more for the financial.

Thanks


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## SnoFarmer (Oct 15, 2004)

For that you will want a good accountant/tax person.
You can depreciate a piece of equipment that is owned by your business ie, plow truck
You have a hard time doing this if you use your personal vehicle for work.
Sell your truck/plow to your business.


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## grandview (Oct 9, 2005)

As they say check with the lawyer and accountant . If you show lost for 3-5 yrs the IRS may disallow it and say it's a hobby.


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## stangman35 (Feb 9, 2007)

Yeah my sister is an accountant,havent got a chance to talk to her about it.

just tring to find out how some of the guys on here do it.


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## Spinman710 (Sep 18, 2007)

There are some tax differences as well (or so I've been led to believe) between an LLC and an S Corp. Some benefits are better than others. Check with your sis and see what one benefits you the most...

I have to do the same. I work for myself as a design consultant, so plowing is yet another 'division' that I need to startup...


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## Turkey (Feb 11, 2005)

I'm in the same boat on this one. Looking to get a LLC going for liability and to protect the house and retirement funds etc. Chatted with a local lawyer and she suggested starting two LLC's. One to operate the snow plowing business, and the second at a "leasing" LLC which would hold the equipment and lease it to the snow removal business. I guess this double protected my truck since it's also my daily driver. If the snow removal LLC was involved in a lawsuit it would have little to be taken. The equipment wouldn't technically be owned.

Anybody else get this response or have a business set-up like this??


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## bribrius (May 5, 2007)

Turkey;415419 said:


> I'm in the same boat on this one. Looking to get a LLC going for liability and to protect the house and retirement funds etc. Chatted with a local lawyer and she suggested starting two LLC's. One to operate the snow plowing business, and the second at a "leasing" LLC which would hold the equipment and lease it to the snow removal business. I guess this double protected my truck since it's also my daily driver. If the snow removal LLC was involved in a lawsuit it would have little to be taken. The equipment wouldn't technically be owned.
> 
> Anybody else get this response or have a business set-up like this??


i did at one time. the headache value and expense of it wasnt worth it. i actually have been considering it again for the last month and opted against it. reality check! your starting two llc's to plow snow? how much snow? what kind of accounts? are you doing it just to give money to the lawyers, accountant and insurance company? how much money will you be making on this? you work another job so i cant imagine your going to be making a ton of cash and doing many accounts. if you have to go through that much headache to make a grand this winter i would suggest just not doing it. 
i have crap i write off now on property i own and self employment on top of a regular job. eventually you have to stop looking for ways to write things off/protect yourself from liability and admit you need to find realistic ways of making money without paying it all out to others. i think im just having a moment dont mind me. looking back i realized i paid out as much as i made and the people i paid it to werent the ones doing the work. having write offs and protecting yourself is good but i think it comes to the point that your spending more time doing that than what you should be doing which is making money.
 jmo


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## SnoFarmer (Oct 15, 2004)

bribrius;415429 said:


> i did at one time. the headache value and expense of it wasnt worth it. i actually have been considering it again for the last month and opted against it. reality check! your starting two llc's to plow snow?
> No he said one for snow the other for a leacincg CO
> 
> how much snow? what kind of accounts?
> ...


  ...............


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## bribrius (May 5, 2007)

so your telling this guy to go spend four grand to make a grand? then spend another countless hours dealiing with red tape bs while not being paid? no. im not kidding at all. 
if it was his fulltime job i wouldnt deter him from it. i dont see this as a viable business for him (except on expensive gold paper).


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## SnoFarmer (Oct 15, 2004)

bribrius;415472 said:


> so your telling this guy to go spend four grand to make a grand? then spend another countless hours dealiing with red tape bs while not being paid? no. im not kidding at all.
> if it was his fulltime job i wouldnt deter him from it. i dont see this as a viable business for him (except on expensive gold paper).


Where did you get this ## from your but?

It only takes a couple of hundred $$ to register a LLC,LLP,or A CO

When his snow plowing business or a litigants lawyer names his leasing Co in a suit he will need a separate ins policy and yet another lawyer will be involved.

He has a good idea having two business.
AS I to lease my vehicle to my plowing business.
I wonder if renting would be cheaper..lol


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## LoneCowboy (Jan 2, 2007)

The multiple LLC thing is a scam. 
You should absolutely have an LLC (or corp) to protect your busines assets from your personal
and to allow you to take full advantage of all the tax laws for small businesses.
But, having multiple LLC's is just a paperwork nightmare.
So, pretend you get sued, the lawyer comes and figures out who owns what (that's what lawyers do) and says to the judge "hey, this guy has multiple business's just to play games no real reason" and the judge says "good bye"
It's called piercing the corporate veil.
Just like you have to signature gaurantee your loan agreements for your LLC, even if it's a business making money, same problem. 
Now, if you have two completely seperate business's that have no real need to have their business's joined (i'm thinking owning a rental house and a snow plowing business) then it may make sense. But normally and in the situation you describe, no, it's just less than optimum.

Besides, now not only all your administrative costs doubled (two phones, two bank accounts, etc etc etc) but now you need double the advertising to get your brand awareness going.
it's a bad idea.


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## Turkey (Feb 11, 2005)

Last season was my first year plowing. I got a late start, didn't get my plow installed on the truck until mid-December, then missed a week while on vacation in January. In the end, I broke even on everything including paying entirely for the plow. I sub-contract for my father-in-law, mostly commercial lots. There's plenty of plowing this year, another local landscape company is going out of business so he's been slowly picking up some of the available accounts.

There are alot of the double LLC or INC around. A couple I've noticed are some of the local appliant/electronics store/chains. You'll always see Joe's Electronics, but if you look closely at their delivary truck they'll say owned and operated by Joe's Transport. This way if Joe's truck causes an accident he could possibly loose his transport business (ie his delivary service) but not his entire appliance/electronic store. I see more and more heating/plumbing companies doing the same thing.

I agree the double LLC suggestion from my lawyer seems like a lot of hassle for a one truck operation. I'm most likely will set-up one LLC for liability as I'd like to pursue some of my own accounts and get the finances of my snow business separate from my personal to better track income/expenses/tax deductions etc.


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## Turkey (Feb 11, 2005)

Forgot to mention, the lawyer fees for setting up a LLC correctly (with an operating agreement) are about $300-$400. Not a big deal for the liability protection it will provide when done properly.


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## Spudgunner (Aug 23, 2006)

Turkey;416126 said:


> Forgot to mention, the lawyer fees for setting up a LLC correctly (with an operating agreement) are about $300-$400. Not a big deal for the liability protection it will provide when done properly.


My wife did her own LLC for her biz. Here in Idaho it is pretty straightforward; however, if you don't have the time an attorney can do it for you. I had an attorney do mine and it was closer to $1000...as I didn't have the time to do it myself then (or I would have). You might contact your Secretary of State office for instructions and then just do it yourself.

An S-corp seems like more trouble than it's worth to me...for a microbiz...but that's DEFINITELY one of those "Your Mileage May Vary" types of things.

Good luck to you.


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## bribrius (May 5, 2007)

SnoFarmer;415478 said:


> Where did you get this ## from your but?
> 
> It only takes a couple of hundred $$ to register a LLC,LLP,or A CO
> 
> ...


number? thats a minimum. pay a lawyer to do it right. not just "filing the form" your looking at fifteen hundred to two grand. you have to show documentation of transfer of assets to the llc. you cannot just pick a name and fill in the line. the llc will be worthless. plan on putting some serious k in its bank accounts along with the asset transfer. a lawyer would have a field day with you. limited means the llc members (if you are the only one they can toss the llc in the trash) are in liability to the amount each member has invested. on the other hand if the llc doesnt have adequate assets/capital investments they toss it in the trash anyway. along with the seperate accounting. hope your giving it a good deal on leasing the truck or they can throw the paperwork in the trash just on that. if its obvious the members arent acting in the best interest of the llc then they can discount the llc. i hate when people just assume they have a llc they are protected. it has to be treated as a separate entity. it has to have adequate funding and assets to be considered a seperate entity. it has to show record of making prudent choices to benefit itself. it should have more than one member because if it acts like a sole proprietorship and walks like a sole proprietorship they just may toss out your llc and say your really a sole proprietor. dont forget to always make sure your working on behalf of the llc. lone cowboy was right. they are seeing through these rather easily and can tell what is legit and what is bs.
people started just using these to "limit" liability and for pass through taxation. unfortunatley they seemed to forget the llc itself is SUPPOSE to be in business doing something OTHER than protecting the owner(S).
i seen a s corp go down last year. owners went down with it (yes, personal assets too"can i keep my house, can i keep my house please." " okay we will just max it out with liens and take everything else. enjoy bankruptcy".). it was messy.

example. im considering putting a property under a llc. also putting some cash in with it. figure around two hundred k asset value and cash. it will look "legit" however if im not mistaken it will mean im liable for up to two hundred k. if i only put four grand in it i would be liable for four grand if it held together but it would probably just be discounted as bs llc and they wont consider it a seperate entity. if i lease the property back to myself way below market value they can question that also since im not actually performing the duties of managing the llc and just using the llc for my protection rather than acting on its best interests (its suppose to be a seperate entity).


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## SnoFarmer (Oct 15, 2004)

You need a breath mint or you are talking out of your butt. 

You assume quite a bit.


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## bribrius (May 5, 2007)

SnoFarmer;417210 said:


> You need a breath mint or you are talking out of your butt.
> 
> You assume quite a bit.


probably just see more of it than you. grew up in a family that had multiple business's. use to trade the exchanges so ive seen more than my share of financial statements. i could have told you, you needed income statements and a balance sheet. i actually had been putting together a financing package for the s corp i mentioned above. there income statement didnt look to good. lol. few lawsuits and creditor issues and they filed bk six months later and were screwed. 
if your a multi million dollar corporation that starts a holding company for protection which is owned by another holding company they can still get you. nothing is absolute and lots of it is bs. lawyers love it. better off just being honest with everyone you deal with and trying your best to run your company. as long as your not seriously negligent you shouldnt have any major problems.


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## cjasonbr (Nov 18, 2005)

SnoFarmer;401623 said:


> One day I was cutting a new lawn in the summer that hadn't been cut in weeks. There was a public water access pipe under the 8" of grass that I didn't see. Ran it over with my Zero-Turn mower. It sliced right through the 1 inch pipe like a twig and sent it flying into the street. On the other side of the street there was a little girl riding her bike. If it had hit her, it could have killed her instantly, and with a DBA I would have been personally sued. Every dollar I made for the rest of my life would have been to pay off my lawsuit. If you have a corp or LLC, then only the business assets can be taken in a lawsuit. They can't attack your personal assets or your home.
> 
> An S corp offers "pass through taxation" which means that all net profit is added to your personal tax return as taxable income at your personal rate. LLC's are easier to handle as far as record-keeping, but I have been surprised by a little fact. for an S corp you're forced to show balance sheets and income statements which can easily be done yourself on a spreadsheet. I bring it up to speed monthly, and it has forced me to take a closer look each month at what I'm spending, and what I'm brining in. It forces you to identify the finanical flows of your business, and helps you run it more efficiently. Also, an S corp has "shares" just like any other stock company. This makes it much smoother when you decide to sell your business, or bring in a partner. It also shows a larger separation from your personal finances, which makes it much harder for someone to sue you personally for things done by the corporation.
> 
> ...


This is NOT right!!!!!!!!!!!! And most of the rest of the information on this thread is INCORRECT!!!

If you are the one riding the lawn mower - why would you be less responsible for your own actions if your business name ends with LLC?!?!??!!?!?!?!?!??!?!?!?!!?

I can see it now: "Sorry you're kid's hurt, but because i have an LLC you can only sue my company." HAHAHAHAHAHA

The difference between LLC and DBA is you aren't personally liable for your employees mistakes. So if you're employee was driving that mower then you wouldn't be personally liable.
If you do something (personally) that causes damage to someone else then you are personally liable NO MATTER WHAT KIND OF BUSINESS YOU HAVE!!!!!!!!!!!!!

I am a DBA company.

The BUNK information you guys continuously give on liability issues is getting to be frustrating. I love reading your threads about plowing - but in this case you guys are DEAD WRONG.


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## bribrius (May 5, 2007)

cjasonbr;417279 said:


> This is NOT right!!!!!!!!!!!! And most of the rest of the information on this thread is INCORRECT!!!
> 
> If you are the one riding the lawn mower - why would you be less responsible for your own actions if your business name ends with LLC?!?!??!!?!?!?!?!??!?!?!?!!?
> 
> ...


very true. in fact one could argue that even if your employee made the mistake you are liable because you were negligent operating the business by not providing proper training on equipment and yearly certifications in which you view the employee operating that equipment and using safe pratice in its operation.


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## SnoFarmer (Oct 15, 2004)

Go back and READ I was quoting someone but you did not read it 
OR you changed the tex in the quote you coppied and pasted.

Hear is the link ,go READ
http://www.plowsite.com/showthread.php?p=401623#post401623

I quoted plowman350....



cjasonbr;417279 said:


> This is NOT right!!!!!!!!!!!! And most of the rest of the information on this thread is INCORRECT!!!
> 
> If you are the one riding the lawn mower - why would you be less responsible for your own actions if your business name ends with LLC?!?!??!!?!?!?!?!??!?!?!?!!?
> 
> ...


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## SnoFarmer (Oct 15, 2004)

SnoFarmer 
Registered User Join Date: Oct 2004
Location: North East Minnesota, elev 1436ft
Posts: 2,583

Quote:
Originally Posted by grandview 
It really doesn't matter what your "other" job is. When your plowing you need to be protected if anything happens i.e. insurance.

Sure it does if he owned the farm it would be set up as a business allready and this business could also offer snow removel/plowing.

Here is some info from the thread /link i posted,

FROM< 
plowman350 
QUOTE,

Never A Dba

I started my lawn/snow company as a DBA. A quick story to explain why I switched to an S Corp:

One day I was cutting a new lawn in the summer that hadn't been cut in weeks. There was a public water access pipe under the 8" of grass that I didn't see. Ran it over with my Zero-Turn mower. It sliced right through the 1 inch pipe like a twig and sent it flying into the street. On the other side of the street there was a little girl riding her bike. If it had hit her, it could have killed her instantly, and with a DBA I would have been personally sued. Every dollar I made for the rest of my life would have been to pay off my lawsuit. If you have a corp or LLC, then only the business assets can be taken in a lawsuit. They can't attack your personal assets or your home.

An S corp offers "pass through taxation" which means that all net profit is added to your personal tax return as taxable income at your personal rate. LLC's are easier to handle as far as record-keeping, but I have been surprised by a little fact. for an S corp you're forced to show balance sheets and income statements which can easily be done yourself on a spreadsheet. I bring it up to speed monthly, and it has forced me to take a closer look each month at what I'm spending, and what I'm brining in. It forces you to identify the finanical flows of your business, and helps you run it more efficiently. Also, an S corp has "shares" just like any other stock company. This makes it much smoother when you decide to sell your business, or bring in a partner. It also shows a larger separation from your personal finances, which makes it much harder for someone to sue you personally for things done by the corporation.

With an S corp you need a board of directors. As the President of the corporation you can decide that you and your wife are the directors. You're president, and she's an officer. you are required to meet annually to discuss the future of the company. So, if you ever get audited, you jump on your computer, and write down some of the things you've talked about, and decisions you've made for your company. Hit print and you're all set. Or keep a log book throughout the year of decisions you've made and things you've talked about. On Valentine's day take your wife out to dinner and discuss some of the things you've done in the past year, and things you're going to do next year. There's your annual meeting, and you have the notes to back it up.

UNQUOTE..

"LLC" or a "Corp" will separate your personal assets from your business assets.

I think you will be fine with an LLC but I'm sure othere will give there thoughts also. 
-----------------------------------------------

I have never had a lawn care business,
I do not mow grass.

Next time you quote someone get it right..


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## SnoFarmer (Oct 15, 2004)

A dba is nothing everyone doing business has to call it something.
Doing Business As.....

The dba is on the paper work for a LLC, LLP S corp or a CO....
It's the name you do business under it can be your name or whatever it does not matter. 

If you need a lawyer for every thing you file with the state /city/govt
you will be broke before you plow one flake....


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## basher (Nov 13, 2004)

cjasonbr;417279 said:


> This is NOT right!!!!!!!!!!!! And most of the rest of the information on this thread is INCORRECT!!!
> 
> If you are the one riding the lawn mower - why would you be less responsible for your own actions if your business name ends with LLC?!?!??!!?!?!?!?!??!?!?!?!!?
> 
> ...


Stop the screaming, typing in capitals won't make you right. Perhaps you should get them to start a new discussion group. call it cjasonbr's rants, fill it full of misinformation and silly statements.

example: "If you are the one riding the lawn mower - why would you be less responsible for your own actions if your business name ends with LLC?" 

If you are a employee of the company then yes you would (be less responsible.) Don't confuse civil law with moral law. The corporation would be responsible for your actions. could they pierce the vail, sure but it's much harder, and if you're smart enough to have it, the corp insurance foots the bill.

Every state has different laws, I personally think S type is the way to go, there are some issues, limits to ownership, it's a little easier to pierce the corporate vail, etc. Talking to a good Tax liability lawyer is a good idea before you spend more money setting up multitude corps then it's worth. Don't forget these company's have to file tax returns, have insurance, etc. Set it up too funky an they will find a way to do an end around, and leave you squirming like a bug stuck to a board.


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