Finally Incorporated !

threaderman

My lawyer filed my articles of operation for me today with the sec. of state so I am now a LLC.It's bein 2 years with this company with-out it [sole-proprietor].I feel so much better now separating the business from my personal assets ,from a legal stand-point.He did a great job with the format,I wouldn't have done near as well myself.Well worth the $500. and $100. filing fee to have it done Professionally.Just thought I'd share.

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Joe ---International Code Council Member

Your plumbing & gas specialist proudly serving Oklahoma City OK, Moore, Warr-acres, Norman, Midwest City, Edmond, Bethany, Forest Park

Double-A

Congratulations Threaderman, LLC

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"My clients’ wishes are the center of my attention." -- David Guido, a contractor in Woodstock, N.Y.
New York Times, July 20, 2006

KevinACrider

I may be doing the same thing with my business soon.

philner

Congradulations Mr. President.

Bill

Just remember, you do not own your money, the company does. Thats why I like a sole proprieter. If someone is smart, they can report and have IRS audit your company. Even if you buy yourself a pair of shoes with the company card, you can get into trouble. Does being incorporated really seperate your personal from buisness? No. Your person can be sued as well as the company. It is just a tad bit harder to do, but a good lawyer can sue you personally along with your company. How do I know this? been there, done that, had the troubles. Incorporated is ok to a point, but do not depend on it.

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Is it beer thirty yet
Virginia Department of Licensing
Virginia Plumbing Codes

threaderman

A little wind out of my sails but point[s] taken.Thanks for sharing and thanks for the nice feed back from all you guys.

__________________
Joe ---International Code Council Member

Your plumbing & gas specialist proudly serving Oklahoma City OK, Moore, Warr-acres, Norman, Midwest City, Edmond, Bethany, Forest Park

Tin Cup

Congratulations, welcome to the club.

but, but you said incorporated then you said LLC. I'm sure there will be some more knowledgeable folks on here add some more valuable insight, but from my database,

a corporation is its own entity in the sight of the government and has to have a EIN. but most small corporations file for a "S" designation with the IRS, meaning basically the profits and losses "pass through" to the owners. Liability is less in regards for being sued or held liable for a mistake or building problem or such, but if you are small by choice like I am and you are the one doing most of the work and you make the mistake, you are still somewhat liable.

by the way, i just closed a corporation in '07 and opened an LLC because my business has changed in significant ways.

a single owner LLC is viewed by the IRS essentially the same as a sole proprietor, you've got to pay self employment tax on profit, etc. whereas with the corporation, paying yourself a modest salary but taking "dividends" gets you out of some of those taxes, legally. with the LLC, if you have "employees" you must get a EIN, if you don't you can still choose to get one but don't have to.

the biggest difference I experienced was: if you are making alot of "profit", incorporate, modest profit then LLC.

Also a major distinction:

if Incorporated, the corporation must file its own federal, state, local tax returns. the profit/loss is then reported on your individual tax returnon line 17 of form 1040.

if LLC, a schedule C is reported as a part of your individual return, line12 just like you did for a sole proprietor. a little extra cost for your CPA to prepare both sets of returns for a corporation & individual, but it all washes i guess.

I was able to transfer my contractor's insurance, worker's comp, contractor's license, as an "entity change" in order to keep all my track records and experience ratings.

lots to think about as businesses grow, slow down, change: city, state, federal governement, IRS, insurance, worker's comp, liability, profit versus dividends versus, payroll. anyway, just fresh in my mind since I just filed my taxes two weeks ago.

Good Luck,

Tin Cup

Milhaus

I sent the okay to my attorney to set-up the S-corp today too. Good for you threader...

mark

threaderman

Tin cup ,thanks.I have had my sales tax permits and fein in place for some time now.I do chose to stay small for quality control reasons.I don't take every job I'm offered so the ones I do take get the best service possible.I put incorporated in the title to see who would catch the difference.You're good!
Milhaus,congrats,on my accts. advice I went LLC instead of s-corp.My articles of organization are written in a way that they will be useful even with substantial growth.Good-luck with yours.

__________________
Joe ---International Code Council Member

Your plumbing & gas specialist proudly serving Oklahoma City OK, Moore, Warr-acres, Norman, Midwest City, Edmond, Bethany, Forest Park

threaderman

It's necessary now adays,but these things take time and research and money.Does it change the work habits,no,but it does make a difference in the way the cust. views the business as far as credentials go.My opinion.

__________________
Joe ---International Code Council Member

Your plumbing & gas specialist proudly serving Oklahoma City OK, Moore, Warr-acres, Norman, Midwest City, Edmond, Bethany, Forest Park

Greg P

Interesting to hear you say that. I read all the time about all you can do with "your" money when you incorporate. A couple of businesses ago, I was a 1-man inc and between payroll taxes and whatever else seemed to drain my personal income...I've been happier as a sole prop.

I have an awesome, straight-shooting tax person who tells me not even to think about becoming a corp or LLC. She won't even go into it...just says "don't do it" and said exactly as you did "if they want to come after you personally, they'll come after you personally."

I still don't know if I buy it though. But you sound like you've got 1st hand experience to agree with her.

Greg

Double-A

An LLC is a state entity, not a classification by the IRS. LLCs can choose how they are to be treated by the IRS via Form 8832, Entity Classification Election.

A single member LLC that does not elect to be a corporation will be classified by the IRS as a Disregarded Entity which is taxed as a sole proprietor for income taxes.

This can get way confusing, and this is why its best to discuss these things with your CPA.

As far as liability goes, if you have good insurance and keep good records, follow the rules and report on time, you shouldn't have any problems. If you do, its because someone made a mistake and will probably be easy to clear up.

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"My clients’ wishes are the center of my attention." -- David Guido, a contractor in Woodstock, N.Y.
New York Times, July 20, 2006

CA Contractor

Hi guys - my husband & I are an S corp in CA & it's worked out fine for us. Our atty explained while nothing is 100% secure, being incorporated can offer protection for personal assets as long as we maintain certain records, making it difficult to 'break the veil'. We must document all officers' meetings/dates & document everything: major purchases, all contracts, subs who will be working on those jobs, anything pertaining to the business must be documented in a certain format. Yes, it's additional paper work but we feel more protected than when we were sole prop. The other thing to consider is that once incorporated you become employees of the company. I would recommend anyone thinking about incorporating to definitely discuss w/an attorney - they are better able to discuss all aspects so you can determine whether it would benefit you & not sure how it varies per state. Apparently there is a new ruling by IRS in which S corp officers receive reimbursement for medical premiums paid.

SelfContract

After Enron, MCI incidents (tax scandals, book cooking), the tax man (IRS) issues stricter rules for all corps. No more safe haven. No more hiding, fooling, and evading. They can get to anyone at anywhere on anytime.

threaderman

I am a firm believer in good record keeping,and that is a key point.As far as messing with the company funds,I don't do it.I don't have to .If the business couldn't support itself and make me a decent living ,I wouldn't be in it.Even as a sole prop. I kept the business seperate in anticipation of organizing .I had other businesses I could walk away from but this company is my future and I'm in it for the long haul here in OKCity.Good climate,good fishing and 1/2 way to anywhere..It's interesting to hear the other side though,those that have switched back to owners.Very interesting points.As far as our rules and regs for OkLA. ,the LLC is treated very similar to a sole prop. as far as taxes are concerned,and that was a attractive aspect to me.

__________________
Joe ---International Code Council Member

Your plumbing & gas specialist proudly serving Oklahoma City OK, Moore, Warr-acres, Norman, Midwest City, Edmond, Bethany, Forest Park