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Thread: Llc, s corp, or c corp?

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  1. Default  
    #21
    Join Date
    Aug 2006
    Location
    Nashville
    Posts
    309
    Keep in mind there is 26 ways a corporation veil can be pierced. You can set up LLCS that report as S Corps (That's what I do) or just an S-Corp or LLC online yourself, an accountant or lawyer can do it. If you're not making money yet I would go with an LLC. You can use The Company Corporation who are suppose to be really good and will give you 50K in legal service if your corporation is pierced. Anyone can sue you for anything no matter what you do! An LLC protects your personal assets but that doesn't stop someone from going after them...you just have a better chance of the judge dismissing it.
    Again this isnít legal advice this is just how I roll.

    https://www.incorporate.com/
     

  2. Default  
    #22
    Join Date
    Nov 2011
    Posts
    107
    Quote Originally Posted by BrotherMysterio View Post
    However, what a lot of people don't know or realize is that if the offending act in question is particularly egregious, and if the proverbial man behind the curtain seems to just be hiding "behind the corporate veil" (the technical term for it) so as to avoid liability (for instance, sitting on a net worth of millions of dollars, while the corporation is penniless), then a court can elect to "pierce the corporate veil" and go after the man himself, deeming the article of corporation merely a facade or front. And mind you, this is with a corporation, one of the most powerful tools you can use to protect yourself.
    What BM describes is the owner being brought in due to actions or inactions of the owner. I'm thinking Enron. If someone sues your company and you honestly didn't do anything wrong you can still be sued by mingling personal and haunt monies. Using your personal credit cards for haunt expenditures. Dipping into the haunts funds for personal use. The hearse you drive around for advertising is in your personal name and not your haunts. etc. etc. etc. The property is under your name and not the haunts. That's why I had to rent my building to myself under my haunts name. An accident happens on your location and there is no rental agreement, aw hell I'm going after the land owner too! That simple.
     

  3. Default There is a tax issue also 
    #23
    Join Date
    Jul 2012
    Posts
    8
    C corp is just not a good idea for any small business because you get taxed twice on the companies earnings if you ever take money out of the company.

    With an S-Corp or an LLC taxed as an S-Corp you can essentially avoid paying payroll taxes on roughly half of the Corps earnings. To keep out of trouble with the IRS you should pay yourself a salary that is roughly half of your yearly income, then you can take the other half as a distribution, which will keep you from paying the roughly 15% payroll tax on the distribution (but you are still paying income taxes on the entire amount of the Corp's earnings).

    If you do an LLC taxed as a partnership you pay self employment (payroll) taxes on every dollar of the Corp's earnings, but you can legally avoid paying workers comp by being taxed as a partnership IF you don't have any employees (there are many ways to pay actors without making them employees).

    Not trying to brag, but FYI I am a CPA who does taxes for a living.
     

  4. Default  
    #24
    Join Date
    Aug 2006
    Location
    Nashville
    Posts
    309
    Quote Originally Posted by C&D_Haunts View Post
    C corp is just not a good idea for any small business because you get taxed twice on the companies earnings if you ever take money out of the company.

    With an S-Corp or an LLC taxed as an S-Corp you can essentially avoid paying payroll taxes on roughly half of the Corps earnings. To keep out of trouble with the IRS you should pay yourself a salary that is roughly half of your yearly income, then you can take the other half as a distribution, which will keep you from paying the roughly 15% payroll tax on the distribution (but you are still paying income taxes on the entire amount of the Corp's earnings).

    If you do an LLC taxed as a partnership you pay self employment (payroll) taxes on every dollar of the Corp's earnings, but you can legally avoid paying workers comp by being taxed as a partnership IF you don't have any employees (there are many ways to pay actors without making them employees).

    Not trying to brag, but FYI I am a CPA who does taxes for a living.
    Yeap... I would go with C & D Haunts says. I do believe the 50% is the conservative view. In high income situations It would not apply. Do you agree with that C&D?
    I pay myself and wife a salary and in our state we still have to pay unemployment tax for my wife and I ..in case we fire ourselves (Nuts).. however they just raised the tax to over 60K in wages per quarter..so for the first year we have escaped that tax.
     

  5. Default Paying from your own pocket 
    #25
    Join Date
    Mar 2011
    Location
    Raleigh, NC
    Posts
    377
    C&D you mentioned something that has piqued my interest. My current accountant has shown me how to "post" expenditures for teh corporation when using my personal funds and or credit cards. Simply making journal entries. But what I am hearing from you is that this is not good, and everything should and must be paid through the corporation?

    With this being the case, I am assuming than the officers would need to "loan" the corporation funds (we are in the early stages so personal funds are providing OPEX)?
    Travis "Big T" Russell
    President
    Big T Productions Inc

    Owner and Operator of "The Plague" and "Camp Nightmare"

    Customer Quote of the year: "Damn, I pissed myself"
     

  6. Default Business expenses with personal funds 
    #26
    Join Date
    Jul 2012
    Posts
    8
    The surest way to keep yourself out of trouble would be to make a capital contribution into the company using your own personal funds, then once the funds are in the company pay the expenses. You are absolutely allowed to take money out and put money into your own company, and this does not pierce the veil. Just write a check out of your personal account, deposit it into the company's bank account, then pay your expenses out of the company account. This is the "best" way to do it and avoid trouble. Making journal entries for these purchases is probably the second best way, but I'm not a lawyer and I don't know how easy it would be for a prosecuting attorney to nail you for just making journal entries. But if you go the route of making a capital contribution into the company you really don't have anything to worry about.
     

  7. Default  
    #27
    Join Date
    May 2012
    Location
    Noblesville, IN
    Posts
    28
    Has anyone used legal zoom for an LLC for Indiana? Their website has a $99 economy llc startup. Seems easy enough but what am I not getting it seems a little to easy??
    BARN OF TERROR
    www.barnofterror.us
     

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