LLC or S-Corp

[CEShawn]

So I dont know why, but I always thought I was going to go down the LLC road. Now setting it up today and they are trying to talk me into an S-Corp, just started reading up on this... anyone have any inputs?

 

[Captlvb]

I ran a charter business as a LLC to protect myself and my assets, as limited as they are. I would go talk to an accountant first about your tax requirements and any other advantages/disadvantages to either and any others they might see as an option. I assume this is for commercial purposes and not charters reading your posts? I am not a lawyer or accountant but I hated giving them substantial money even when I showed limited to no profit.

 

[djmarchand]

Both have the same liability protections. S Corps give you shares that can be divided among several people and be more conveniently sold, pledged as collateral, etc.

But consult an attorney. Don't base the decision on locker room chatter.

David

 

[WC1966]

My Tax people recommended Incorporation when I was doing subcontracting work about 12 years ago. My main goal was to protect my house and saving. I went with their recommendation to Inc. The cost was not outrageous, I used a lawyer they recommended. Ask a lot of questions,

 

[CEShawn]

I've always been involved with and did an LLC because that is what everyone seemed to do. Then about a year ago my close friend did the S-corp thing, trying to reach him now. Then now my accountant and a couple other people recommend the S-corp. I guess one thing is if you do make money on it, the S-corp doesnt get double taxed like a LLC can be... see that all over the place but not sure I understand it... I believe for liability there is not much difference but is stronger, not sure if ithat is true..

 

[sailor of fortune]

I've always been involved with and did an LLC because that is what everyone seemed to do. Then about a year ago my close friend did the S-corp thing, trying to reach him now. Then now my accountant and a couple other people recommend the S-corp. I guess one thing is if you do make money on it, the S-corp doesnt get double taxed like a LLC can be... see that all over the place but not sure I understand it... I believe for liability there is not much difference but is stronger, not sure if ithat is true..

I think you have the tax thing backwards (I believe). I own a C corp and pay double taxes, the LLC I think is taxed as a individual only. An attorney has to be in on the asset protection part of the equation. What is good for tax planning may not be so good for asset protection.
Negligent operation can always pierce the corporate vale, it is nuisance claims from creditors and predators that you need protection from.

 

[Frigate]

I own two S-Corps, there are no double taxing on S-Corps. All the money or loses from the two Corps flow to me at the individual rate.

 

[BillD]

I own two S-Corps, there are no double taxing on S-Corps. All the money or loses from the two Corps flow to me at the individual rate.

Frigate is correct.

S corps are taxed @ the individual rate. NO double tax.
LLC is the same.

Here ya go Shaun, straight from the (horse's mouth ) US Govt Small Business Administration:

Might help ya make an informed decision.

Should My Company be an LLC, an S-Corp or Both? | SBA.gov

 

[Hammer Slammer]

What is the purpose of setting either up? Do you really have exposure to protect your assets from? They are both penetrable by a decent lawyer if shit does hit the fan. Do your self a favor and talk to attorney first.

 

[CEShawn]

Try finding a maritime lawyer to talk to easily, not easy as I have had to deal with them professionally before. I am sure there are some out there but you can't get 1-800-lawyer1 to help you.

 

[sailor of fortune]

I stand corrected on the tax of the S corp.

I don't think you need or want a maritime atty for advise on creating the proper entity.

 

[Bill]

Create a Delaware or Nevada llc on legal zoom . I just didit last week for $240 I think. Mass llc is $550 a year. F that.

 

[Muscie]

So I dont know why, but I always thought I was going to go down the LLC road. Now setting it up today and they are trying to talk me into an S-Corp, just started reading up on this... anyone have any inputs?

The liabilty protections are similar, but if you do not respect all the formalities the protections will be lost. If you are a singel member LLC the revenue & expenses are reported on your personal return on schedule C & the profit is subject to income tax & Self employment tax. The single member LLC is easier for tax reporting because it all goes on your individual tax return. The S corp is a separate entity that files a separate corp. tax return. You report the net profit on your tax return based on the k-1 that the corporation prepares as part of the corp return. The net profit is not subject to self employment tax, however, you must take a "reasonable" salary in the form of payroll which involves payroll taxes & filing payroll tax returns, w-2's etc. which adds to administration costs. The choice really depends the amount of profits you anticipate, how you will fund your business, & certain other intangibles. If you will not have employees & do most of the work your self, & want to remove all the profit, the LLC is easier to administrate. You can also easily set up a retirement plan to shelter some profit with minimal cost.