INC. or LLC? I have been trying to decide which form of buisness would be better for me.Iam a one man operation just starting out any suggestions? Thanks.
Yours is a question that can only be answered by either a local trade association, or a local attorney.....thing like this vary too much by locale.
the answer is easy, for a sole proprietor, go LLC, you can do incorporate by yourself and the greatest benefit is you don't have all your personal assets on the line.
Well there is also a sub-S corp that does much the same. Maybe not so easy...
I suggest consulting with an accountant or attorney. This is not something that you want to do yourself.
-Hal
Its not that big a deal, really... do some online research for Sub S Corp and Limited Liability, if your a one man show, which you said you are, LLC is the way to go, just spend a few bucks registering your corp with the state.
Just filed for LLC im in the same boat as you romexcommando ( 1 man show) was doing sole prop with 2 mil in liability but accnt said it was time to get incorp! talked to lawyer and he said as a LLC it was easy to change to typeS at a later date if necessary!
benefits of LLC- relieves personal liability IE. if sued they can not go after your personal worth only business worth!
Also only taxed on income once! where as a s corp your co. gets taxed then your paycheck gets taxed again ( and yes you have to take a paycheck as an s corp)
So as a one man show i think LLC is the way to go !
But i would check with your lawyer and accntant
Good luck in business
Dennis
Thanks for all the replies.I found a site on the net that will incorporate you for something around 250.00 bucks.I called a lawyer from the phone book and he said it would be about 900.00 to do the same thing.Has anybody here used that kinda service? Thanks again.
romex-comando. I believe i saw in some of your other posts that you are located in nj. If so you can register your business on line. If you have the book from experior that was used used for the business test it details the steps. If not let me know and I'll try and dig up the web addresses.
Everyone else; allow me to introduce myself. I've been an electrician in nyc for the past 15 yrs doing mostly commercial and industrial work. I currently live in central nj and finally got around to taking the test this past january. I am now just waiting for the state to finalize my paperwork. Then what, I'm not quite sure yet. I'm figuring I'll try and start slow as the current gig pays very well. Although I am gettin sick of the commute. In last nites ice storm it took nearly 4hrs to get home.
Anyway I've been skulking around the forums for a while and have learned quite alot. I like the free flow of info here. It's great to be able to learn from other's experiences both positive and negative and hopefully i'll be able to make some contributions.
You might try asking your accountant if he can file your forms. I can't say what is required in your state but there may not be anything kepping you from doing your own incorp. paperwork except the time and hassel. Try looking on your state web site.
I thought the idea of a limited corp is a corp form of a partnership with members instead of shareholders. A partnership has 2 or more members. Can only 1 person be the owner of a LLC? I think it depends on the state.
Tom
found the info. this site has links for everything you need to register business in nj.
http://www.state.nj.us/njbgs/ If you poke around it also has lots of general business info. Once you register your business entity I believe you have to get a business permit in its name from the bureau of elec examiners (the ones who issue the licenses).
Even if you own nothing and have no money, doing business you should be inc or llc which ever is best for you.
If something happened on a job couldn't you be made to pay for the rest of your life if you can't pay the judgement?
I myself used a accounant to become a S-Corp. did it 10 years ago, has worked out very well for doing all my side work and wife does things that make money also. you can do several lines of work under one NAME not just a electrical bus. I sujest you talk to a accountant, here in Colorado it cost $125 to set up and the accountant did it.
denny...An s-corp is not taxed twice as you have described, all profits at the end of a year of an S-Corp are taxed at the owners tax bracket. One advantage of an S-Corp is the ability to take "disbursements" of profit thru the year that are not subject to social security and medicare tax.But these disbursements can't be larger than the pay you take from the corp. or the IRS could reclassify them and come after you for taxes owed plus interest,etc.
A C-Corp's profit is taxed at the end of a year and then again when an owner pays himself, which is a form of double taxation. C-corp is for a larger company with large profits in my opinion.
I don't know much about LLC's, but think they were originally designed for partnerships.Most states now allow one owner LLC's.
As far as corporations totally excuseing you personnaly for liabilty....that depends. My attorney says a corp is just another "bump" in the road to your assets if you are sued. For instance, if you are negligent on an installation that causes property damage or personal injury, its possible for a savvy attorney to sue the corp. and you.
I Inc. myself mostly for protection from employees possible mistakes, and for the disbursement advantage. If I were wiring alone, I would go back to being a sole proprieter and avoid the yearly Inc. fees and the added Inc. paperwork.
I got a book on Amazon called "INC. Yourself" by Judith H. Mcquown that was very helpful in my decision to INC. myself.
shortcircuit
I have also been looking into going with LLC. I got what looks like some pretty decent software from nolo.com(law for everyone) for $69.95. It looks like there may be a bit more to it than just filing the form with the state, if you want the protection that an LLC can give you. I'm referring to articles of organization (I think that's what it's called). I don't think you have to file this in most states but it looks like it's a good idea. I guess I'm still considering getting an attorney though. Anyone else familiar with this software or nolo.com?
cvelectric,
Check with your states Secretary of State website, or their department of licensing website. I live in Washington State and incorporating was as simple as filling in the blank form online and paying the fee online. And they have a step by step list for starting a business, including the federal needs. The state incorporates you not the feds. However you must become a C-Corp first. Then send in a declaratiion by the end of march to be an S-Corp. It easy!
Also check my post in this forum; Why pay all that tax with a LLC.