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Essex29
08-02-2005, 09:51 AM
Which is the best form of protection and offers the best benefits for a business owner? I dont know exactly what I am planning yet, but I have a few ideas and want to protect myself.
Any info would be great!
Tarek

Mandelon
08-02-2005, 10:31 AM
It depends on what you are trying to accomplish. Tax advantages, liability avoidance, partnership, real estate, or holding a corp? Each type of corp set up has different and distinct advantages and disadvantages.

C-2
08-02-2005, 02:05 PM
Which is the best form of protection and offers the best benefits for a business owner? I dont know exactly what I am planning yet, but I have a few ideas and want to protect myself.
Any info would be great!
Tarek
Use a corp or LLC to protect your personal assets should the business venture go south (in other words, do not co-mingle your finances, keep them separate).
Don’t use a corp or LLC for protection from liability. Piercing the corporate veil is not hard to do these days and courts are really liberal when it comes to proving the corp is nothing more than a shell for your own finances. Get and maintain a big, fat insurance policy for liability protection.
Be very, very careful with any personal guaranty since giving one can throw a serious wrench into being able to prove your corporation is a corporation, and not a convenient and cheap form of business protection.
And don’t fall for the “protect your assets by forming a Nevada corporation” scam. If you do business in California – you’re a Cali corp and will also have to register here. The state (who is worse than the Feds) is gearing up to pounce on these tax scofflaws.
Just some things to ponder….
:)

AirtimeLavey
08-02-2005, 02:12 PM
Boat sales maybe? :D
Might also be some benefits to putting it in your wife's name, too. Used to be you could benefit from minority ownership, depending on the type of bus. A lot of factors to consider. Your level of capitalization is a big factor in deciding which form is right for you. I had a business for 8 years, then the industry changed and I didn't like the new business model. Good luck. :clover: :cool:

SummitKarl
08-02-2005, 02:30 PM
I just did a non-profit LLC in AZ, it was simple, $50, Art of Org, signed by 4 officers, and send it in.

Dave C
08-02-2005, 03:43 PM
That is a good summary. but it really depends on your specific tax situation both today and in the future.
Do either a corp or an LLC but check with an accountant first.
the "limited" protection of both is similiar with corp being slightly better. the tax implications are totally different. LLC is taxed like a p-ship (pass through).
Tax wise being a corp isn't as bad as some people say it is but it depends on the nature of your business. It just requires a bit of tax management and finesse. The AMT and depreciation in Taxifornia are slightly higher for the corp. so if you buy lots of capital equipment consider an LLC.
Also a corp does not protect from professional liability. (just in case your a doctor or lawyer) ;)
Did we mention that you should buy a BIG F-ING LIABLITY INSURANCE POLICY and make sure premium payments are made on time.
Piercing the corporate veil is an issue but can be managed with some "how to run a corporation PROPERLY" lessons.
good luck.
P.S. did we forget to mention about the LIABILITY INSURANCE?? ;) :D
Use a corp or LLC to protect your personal assets should the business venture go south (in other words, do not co-mingle your finances, keep them separate).
Don’t use a corp or LLC for protection from liability. Piercing the corporate veil is not hard to do these days and courts are really liberal when it comes to proving the corp is nothing more than a shell for your own finances. Get and maintain a big, fat insurance policy for liability protection.
Be very, very careful with any personal guaranty since giving one can throw a serious wrench into being able to prove your corporation is a corporation, and not a convenient and cheap form of business protection.
And don’t fall for the “protect your assets by forming a Nevada corporation” scam. If you do business in California – you’re a Cali corp and will also have to register here. The state (who is worse than the Feds) is gearing up to pounce on these tax scofflaws.
Just some things to ponder….
:)

SoCalOffshore
08-02-2005, 03:48 PM
You need to consider the minimum corporate tax to California.

My Man's Sportin' Wood
08-02-2005, 04:04 PM
I just did a non-profit LLC in AZ, it was simple, $50, Art of Org, signed by 4 officers, and send it in.
I don't think that helps him much. :confused:
Set up a consultation with your CPA or attorney, if you don't have either, get one. The consultation won't cost much and they will answer all of your questions. Not that their aren't some knowledgable people here. Lots of business owners on this site, and I'm sure most of them will say the same thing. Good tax guys and attorneys are worth their weight in gold. Sportin' Wood's attorney paid for himself this week, avoiding litigation.

Essex29
08-02-2005, 04:21 PM
Thanks for all of the replys. I think I am going to invest some money to talk to an attoreny and CPA, just to be on the safe side.

C-2
08-02-2005, 09:14 PM
Good tax guys and attorneys are worth their weight in gold. Sportin' Wood's attorney paid for himself this week, avoiding litigation.
Ms. Wood~
Amen to the good tax guy stuff.
Glad to hear the good news. Sounds like you made some progress against the evil empire! :)
Dave C is always on point. <------ just who is this guy? :eek: :eek:

BiggusJimbus
08-02-2005, 09:30 PM
You need to consider the minimum corporate tax to California.
You talking about the 800 dollar minimum or some other minimum? If you don't make money, that's what you pay.
That and a shitload of your time doing paperwork for the state.
What a damn nuisance.

My Man's Sportin' Wood
08-03-2005, 05:13 AM
Ms. Wood~
Amen to the good tax guy stuff.
Glad to hear the good news. Sounds like you made some progress against the evil empire! :)
Dave C is always on point. <------ just who is this guy? :eek: :eek:
No, not really. This was another issue with a contract for Jeff's business. The other issue is still ongoing. The Supreme Court case was a major blow. Thanks for inquiring, though. I'll let you know if anything changes regarding that.

Sportin' Wood
08-03-2005, 05:52 AM
Use a corp or LLC to protect your personal assets should the business venture go south (in other words, do not co-mingle your finances, keep them separate).
Don’t use a corp or LLC for protection from liability. Piercing the corporate veil is not hard to do these days and courts are really liberal when it comes to proving the corp is nothing more than a shell for your own finances. Get and maintain a big, fat insurance policy for liability protection.
Be very, very careful with any personal guaranty since giving one can throw a serious wrench into being able to prove your corporation is a corporation, and not a convenient and cheap form of business protection.
And don’t fall for the “protect your assets by forming a Nevada corporation” scam. If you do business in California – you’re a Cali corp and will also have to register here. The state (who is worse than the Feds) is gearing up to pounce on these tax scofflaws.
Just some things to ponder….
:)
Lots of good stuff here. The best money I ever wasted was on a great CPA and a good lawyer. Grandpa always told me to dress in layers for a storm. The same holds true in business. The corporate veil works best in layers.
Lots of things to consider, Do not comingle funds! Keep your articles of Inc. up dated and maintained. I see people all the time that think they are protected because they did the $49.95 do it your self, and don't have a clue that you have to maintain the corp. paper work. Best thing for me was getting good support,(CPA & Lawyer) I have needed them from day one and have made building a business alot easier. Think of it as money well wasted.
Good luck, its a wild ride and every day is an adventure.