I am finding that I have some changes to make this year in several different areas with my business. As far as business structure is concerned, what decision have you guys made and why? SP, LLC, SCorp etc. At what point would a business or individual benefit from changing its structure?
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Pay a professional to help you. Advice here from random guys is just advice from random guys. Anything that will impact you financially needs real, paid for advice.
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Gotcha. I have an accountant that is encouraging me to stay a Sole Proprietor for another year unless I think I can do 50% more business this year. After learning the local market this last year, I know I will. But my last accountant in Tn. encouraged an LLC in 2018, then in 2019 another accountant encouraged SP. Just trying to figure out what questions I should be asking.
as IBS saidâŚthatâs a question for the accounting pro. You may be well served to get some insight from other guys in TN (I assume), but always run anything by the accountant. Any info from anyone from another state may not be of use to you anyway.
For ex. - weâre a collection of LLCs, held by an umbrella LLC, which is taxed as an S-corp. I have an accounting degree, and took the CPA exam, and I donât fully get how/what that all means exactly, lol.
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Yeah it makes sense. My hang up is that 2 accountants had opposing advice back in Tn. Now this one here locally has an opinion. Call it trust issues lol
Yep, they will either see things differently, or think a different time is the right time for you to make a change. Ask some guys in your state, and ask the accountants to explain the basics of why itâs the best option.
Just like three doctors will give you three different opinions. No wonder they call it a âpracticeâ.
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Iâd love to know why some are encouraging you to stay SP; that offers no protection at all. LLC gives you protection. Going to LLC was one of the better business decisions I made awhile back.
S-corp has more to do with how youâre taxed than how the business is structured.
Also, just to be clearâŚthere are different types of LLCâs. And one of them is LLC sole proprietor. Thatâs how Iâm set-up. So just make sure you know how theyâre using the terms.
@Infinity went a different route and was pleased with it. Hereâs his thread on it.
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When I was in Tn. I had a single member LLC. I hired another CPA he told they offer very little protection and obviously cost a lot more than SP. He said a single member llc was actually a complete waste of money in most situations. I was told that if I owned a home I would be advised to Inc.
My local CPA here is telling me that SCorp is the way to go once I think I will hit a certain threshold. Until then, a SP with good insurance is fine. We meet in a few weeks. I think his advice is due to working in both Ca and Oregon, not sure why though.
Iâll take a little protection over no protection. 
But itâs hard to believe that an LLC offers little protection. The whole point of one is to give you protection.
I told my CPA what I was doing and he told me to do an LLC as a single member. In Missouri it was like $300 total including his fees and the stateâs fees. Thatâs not bad at all.
I could see an S Corp making sense in the right situation. Looks like itâs a good fit for Infinity. I need to re-read his thread again.
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As I understand it, an LLC offers different protections in different states so yours may very well be worth it. Mine was $600/yr plus about $400 in fees to pay to have it done initially in Tn. Working in both Ca and Or may have something to do with it too.
WaitâŚyou pay annually for the LLC?
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In Tn, it cost $600/yr to file tax as an LLC. To the state.
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Ouch. Itâs a one-time deal here in Missouri. Pay it and youâre done.
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In VA we pay the State Corp. Comm. like $10/year, per LLC. I canât recall how many I actually have on file now, but it cost me less each than the associated domain reg does. Some of them I only filed to have a claim if competitors start using a similar d/b/a, and itâs impacting us somehow. I guess thatâs a different type of âprotectionâ lol
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Does the LLC really protect the business name? I mean, obviously, the exact name you choose canât be taken by anyone else. But can they choose a name thatâs similar and be ok?
Like if your company was âNew York Power Washingâ and then others out there had:
-Greater New York Power Washing
-New York State Power Washing
-New York Power Washing & Staining
Similar but not the same.
I thought maybe to really protect your name you had to go the Trademark route.
Not really sure, but if someone is infringing on my business to the point we are being mixed up by customers, I probably would have a case, and if I have something on record first, for a few bucksâŚitâs worthwhile. We had that happen with our Christmas lights segment last year, but we decided to rebrand that to match our wash business (which seems to have paid off well in customer response, since we have a much more extensive record of reviews and such on that side). I did keep the old name though, and forwarded the URL to oursâŚmaybe some of their clients will wind up contacting us by mistake, lol.
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