How is your business set-up? LLC? Inc.? DBA?

golfournut · Jan 20, 2013

Filing fees by state vary also. Some more than others. Some require multiple filings for outside the state.

The states that aren't business friendly tend to be the cheapest in the set up, but make up for it in other areas. For example, here in Maryland, I have the privilege of paying a $300 fee to file the Corp income tax each year on 1 laptop which the tax is $24. The filing fee tho for the set up was only $250.

Texas being a businesses friendly state, does have multiple set up fees. But no additional fees of state tax. Like Delaware, Montana, Nevada and a few others, Texas courts tend to lean towards the Corps in law suites when it comes to the veil.

I'm happy for you that yours only cost $3k and would probably hold up. Sounds like you got the best in your area. I seek the best in the areas I choose to set up corps. Sometimes the best have a set fee for doing something specific, sometimes the best charge $450 per hour.

Do you get what you pay for? Don't know till it's tested.

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Dynamite 1 · Jan 20, 2013

corporate filling fee here is 125.00, 1099 prep 110.00, lawyer 350.00 and no other fee's. tax prep corporate, personal, state and federal around 1500.00.

whistler · Jan 21, 2013

Dynamite 1 said:
corporate filling fee here is 125.00, 1099 prep 110.00, lawyer 350.00 and no other fee's. tax prep corporate, personal, state and federal around 1500.00.

This is the closest thing to fact I've read in this this thread. Furthermore, unless you are planning on selling stock in your corporation, an LLC is all you really need. It allows income and tax liability to "pass through" so as to not incur corporate taxes on top of income tax. The LLC member is taxed as an individual while at the same time being protected personally from civil suits not related to credit. These days decision makers in the LLC or Corp are almost always required to sign personally for credit. As far as "standing up" goes, the forms used for either style of business form are readily available on the internet from sources such as Legalzoom.com, etc. What "veil" the IRS can or cannot penetrate likely has nothing to do with the articles of incorporation or the LLC.

paullud · Jan 21, 2013

whistler said:
This is the closest thing to fact I've read in this this thread. Furthermore, unless you are planning on selling stock in your corporation, an LLC is all you really need. It allows income and tax liability to "pass through" so as to not incur corporate taxes on top of income tax. The LLC member is taxed as an individual while at the same time being protected personally from civil suits not related to credit. These days decision makers in the LLC or Corp are almost always required to sign personally for credit. As far as "standing up" goes, the forms used for either style of business form are readily available on the internet from sources such as Legalzoom.com, etc. What "veil" the IRS can or cannot penetrate likely has nothing to do with the articles of incorporation or the LLC.

An LLC doesn't protect you from getting sued if you are in an accident because the company gets sued and you will get sued as the driver, an LLC is good for fleet owners but not an O/O.

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whistler · Jan 21, 2013

paullud said:
An LLC doesn't protect you from getting sued if you are in an accident because the company gets sued and you will get sued as the driver, an LLC is good for fleet owners but not an O/O.

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An LLC provides the same protection from liability as a Corporation. If you can get sued in one it is the same in the other. An LLC is more for individuals, that is the big difference. Corporations allow for more group participation with stock.

paullud · Jan 21, 2013

whistler said:
An LLC provides the same protection from liability as a Corporation. If you can get sued in one it is the same in the other. An LLC is more for individuals, that is the big difference. Corporations allow for more group participation with stock.

To a degree, it is rather pointless to try and protect yourself in this industry with an LLC because you are only protected in your home state.

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Dynamite 1 · Jan 22, 2013

paullud said:
To a degree, it is rather pointless to try and protect yourself in this industry with an LLC because you are only protected in your home state.

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pallud is rite whistler. an llc will not provide any protection away from the state it is filed in. only a a full corp will and that is also determined by the court you are taken to. here in illinois the courts tend to swing the way of letting a suing party bankrupt a corp. but not the personal assets of the owner. in other word they give you one but not both. that is up for grabs also depending on how malicious the situation is.

golfournut · Jan 22, 2013

whistler said:
This is the closest thing to fact I've read in this this thread. Furthermore, unless you are planning on selling stock in your corporation, an LLC is all you really need. It allows income and tax liability to "pass through" so as to not incur corporate taxes on top of income tax. The LLC member is taxed as an individual while at the same time being protected personally from civil suits not related to credit. These days decision makers in the LLC or Corp are almost always required to sign personally for credit. As far as "standing up" goes, the forms used for either style of business form are readily available on the internet from sources such as Legalzoom.com, etc. What "veil" the IRS can or cannot penetrate likely has nothing to do with the articles of incorporation or the LLC.

Yep in a c corp you can sell shares, if you chose. It also keeps going when you die. It's easier to sell shares than units.

The articles and by laws in a corp, or operating agreement in a LLC are part of what determines the proper set up and part of what limits your exposure. I don't know if those forms on the internet are filled out or not! The other part is law.

Most all states are consistent when it comes to c corps.
The corporate veil comes from the phrase "separate and legal entity".

LLCs are relatively new. There is a lot of inconsistencies from state to state.

The double taxation is a myth. That stems from dividend payouts. First the corp pays tax, then the receiver pays tax, but if you do it as a salary, bonus or distribution, then it is a deduction to the corp and only taxable to the receiver.
In a LLC, you get to pay self employment tax.

What's the difference between liability protection and asset protection?

Answer:
Your driving down the road on company business in a company owned vehicle and rear end someone. You get sued and the company gets sued.

In a c corp, because of the corporate veil, your personal assets are protected. Liability protection protects your personal assets.

In a LLC, depending on the state, there are varying degrees of protection. They refer to provisional law. Some offer very little, but most are as good as a c corp.

Your in your personal car driving home from dinner and rear end someone and get sued.

If you are the CEO and major share holder in your c corp, your shares can be taken in the lawsuit.

If you are a member of a LLC, they cannot take your units. Asset protection protects you from losing control of your company in this instance. Where you can get booted out is in a multiple member situation. In the operating agreement, always have 85% majority vote to vote someone out. Then you have to have 16% or greater in units. Therefore 85% can never be attained. Problem is, most set it up on 50%.

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