Business Form: Sole Proprietorship or S Corp?

[ATeam]

As we (husband/wife team) prepare to begin as D-unit drivers for a fleet owner, we need to create our business entity for this endeavor. We've read extensively about the various business forms (sole proprietorship, partnership, C corporation, S corporation, limited liability company, limited liability partnership) and plan to get professional advice before making our final decision.

My question for the group is: In your real-world, on-the-ground experience, what business form do you have and why? Put another way, if you have changed from one business form to another, what were your reasons for doing so?

Thank you in advance for your responses. Your information will help us make a decision that is informed by real-world experience.

 

[teacel]

This is a very good question, there Mr. ATeam!!! (Have to address you as that. Cause I don’t know your name) In fact I don’t remember anyone asking one like this before, but I may be wrong. This thread should get about 500 replies, if in fact! everyone that did this small task, as an owner. Well Okay – then how about 200! is willing to - as you put it - answer this ---> In your real-world, on-the-ground experience, what business form do you have and why ????? x 40 = 200

When I started out as a driver/Owner, and ran alone (one van) I registered as a sole-proprietor, and a fictitious name (total cost $52). The reason for this registration was to keep the start up cost to a minimum. It also seemed unnecessary to register as any other, because I was in total control, (of my business) and had the insurance to cover any accidents, and damages along the way.

It wasn’t until I started using other O/Os and acquired some other vans did I form a LLC (total cost $750). At that point I knew it was time to spend the extra money, so I could save in the long run. I was no longer in total control of my business. If multiple accidents, or damages were to accrue, I didn’t want to have to worry about losing everything I worked all my life to get.

An other way to put it – If my wife and I were going to run and lease on with someone I would get SP or P.
If I was going to own 2 or more vans/trucks I would form a LLC, LLP or S-Corp.

In my opinion a LLC is the same as a LLP, and a S-Corp, except for some small tax breaks. Frank could answer this explanation much better than I can.

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