Incorporated vs llc

This topic has hashed and rehashed.
Please use the search function of the forum and you'll find PLENTY of reading on the subject.
The best advice I can give you is to consult an attorney.

 

Your the owner your the driver incorporate or llc wont help you one bit.

 

I don't see why anyone would want to do a llc, why not go all the way and do the inc. it's not any more difficult.

 

Incorrect. With an LLC, or if you incorporate, the company becomes an entity unto itself, and only the company can be liable and sued. You can lose your truck, but not your house, if you go this route. Don't, and you can lose everything.

But, as another said, talk to a lawyer.

 

Not true if you are the driver and truck owner, they will sue the owner of the company you plus the driver which is you also, if you add trucks and drivers then yes definatly llc or incorporate.

 

The best bet is to go ask an attorney, one route may have a better or alternate tax outcome over the other that fits your business better.

There are several brief descriptions online at either yourincorporation.com or legal zoom.

 

You both are correct to an instinct the court can find either the company or the driver or both liable. But you have to have your paper work in order because the slightest mix up and a lawyer will break through your corporate strong hold. Dont use personal accounts for business and like wise dont use business for personal. You bank account better match you blance sheets. or you can go into court and say you or you wife embesseled the money. No I am not a lawyer got a few in the family and did my reserch before I incorporated. But like someone said talk to a corporate lawyer and your cpa there is a lot of paperwork that goes along with it to make it liget.

Oh and another way to get by if you have family or a good friend you can trust you can put you house and cars in their name deposit you savings into an account in their name

By the way if you need a friend I'm here

 

Also, you have to consider the tax angle.

A "C" corp is taxed at the corporate level. You are then also taxed at the personal level when you draw your wages. This is the old double-taxation angle that many gripe about given that many people have gone the "C" corp route only to find they are paying hefty taxes for the limited liability benefit a "C" corp offers. The United States has pretty high income taxes for C-corps which can go up to about 40%.

With an LLC, you can pass the income through the entity and directly to yourself avoiding the double-taxation angle. An LLC is a better choice for a small business that doesn't plan on becoming a Fortune 500 sized company - however there are exceptions.

Not to roil political feathers but this subject has recently come up in the political realm as liberals have attacked the Koch brothers. The Koch's have used LLCs and LLPs to pass through income for most of their businesses. This avoids the double-taxation angle and where liberals have been coming up with the idea that the Kochs don't pay enough taxes or have somehow been scamming the system (instead of using the system exactly as it was intended). The Koch brothers run the second largest private company in the United States and they do it mostly through pass-through entities rather than traditional C-corps.

Now, one thing I've run into that a lot of people don't really talk about is the subject of "business credit". Note that starting out, your business credit will often require your personal guarantee. If your business has no credit record, many companies will use personal credit in lieu of business credit to measure risks. This is why many small-business people tend to have relatively poorer credit ratings - because businesses are checking personal and business credit when establishing new accounts. Because repeated credit inquiries often decrease your credit score, don't be shocked to find losing a few (or many) points on your FICO score.

A second point on this subject is that business credit isn't as clean as personal credit is in regards to reporting. When you open up a new personal credit line, you can be assured it will hit at least one of the major CRBs. With business credit, you'll find many companies don't always report to a credit bureau. If you're building business credit and gain credit from a company that does not report the trade line to a bureau, you can often self-report the trade line but it does not guarantee that it will show up or that it will have the same weight as a credit line from a company that does report to the bureaus.

So if you've been seeing ads that say you need to build business credit, they are right. And building business credit under your business entity is smart. But they often leave out the details that building business credit is tough and often requires your personal credit be attached to some of the credit lines as a backup. And it will definitely take time to build up enough business credit and business history for a company like Paccar to extend you credit to purchase a truck without having your personal credit involved. It isn't like Paccar is going to say "well, you have a $10,000 credit line for Office Depot so we don't have a problem extending $135,000 in credit to buy a truck"