For those of you who own your businesses....

[swift.taylor37]

How is it set up?  Are you a sole proprietor or incorporated?  What are the advaneforum.xxxes/disadvaneforum.xxxes of each?

 

[Scarecrow Man]

For those of you who own your businesses....

Sole proprietor but still considering going to an LLC.

 

[dark horse]

I'm a sole proprietor, but from what I understand there's a lot of hoops that you have to jump through, and money you have to shell out to become incorporated.  I believe that you have to name at least two other people as partners in your business, and have regular board meetings with minutes taken, etc.The main benefit that I know of from becoming incorporated is that your personal finances are legally regarded as separate from your business finances.  What this means is that if someone were to sue your business, your personal property wouldn't be threatened.The pitfalls could be the massive amount of paperwork that you have to deal with, including serious account tracking, the sceduled meetings that I mentioned, payroll accounting, etc.  Also, if you choose to incorporate, you need to make sure that you trust your partners implicitly.  It could get ugly if you get "big" and your partners begin having a different vision than you.This isn't by any means the definitive discription of the pros and cons of both, I'm merely sharing what my understanding is of both methods.  The IRS website has a lot of info on the various forms of filing, but you have to wade through a bit of "govspeak" to get a good understanding of what they're talking about.  Personally, my eyes cross and a puff of smoke comes out of my head within a few minutes of attempting to navagate my way to the info I seek, but you may have better luck at it.Whatever you decide to do, I wish you much happiness and prosperity.  Just make sure you do your research.Namaste,Carole

 

[omarvader]

For those of you who own your businesses....

Sole proprietor. Incorporation is a major hassle unless you are planning to open a spa w/ employees - and even then, an LLC is cheaper and less IRS-intensive.Contact the irs.gov website - they've got all you need to know about such things!Good luck!

 

[PaulKnorr]

I am a Sub Chapter S Corp.  It cost me $795 and it took three days.  I had to talk to a person for 40 mins and then sign the papers three days later.  We do have to have meetings, but they are usually over dinner and then it is a right off.  (my family is my Board of Directors).   Plus if anyone for any reason sues me, they can not come after my house or personal belongings.  If you are a sole proprietor everything is fair game (house, car, savings account, insurance policies)  For a few extra dollars you can avoid that. (it is a one time fee). If you decide not to incorporate, I recommend getting an umbrilla policy for your insurance.  This can be real handy when someone walks in the door, trips and falls and then gets a lawyer.  Just some info to think about.  Plus if you want to deal with some big companies for contracts,  most wont deal with a sole properitor.

 

[GSXR GIRL]

My business is an S corp too for the reasons mentioned above.  Plus I am enjoying significant savings on income taxes.  I pay myself a salary as an employee and take out witholding taxes on that salary.  My accountant looked at the business's income this year and recalculated how much I pay myself in salary and then advised me to take the rest out in distributions (just cash to myself).  It saves me way more than what I would pay in self employment tax.  I really don't understand the math behind it enough to explain it, and I'm sure everyone's situation is different depending on how much their business is earning vs how much they are paying themselves.In general incorporating is a hassle in terms of paperwork and reporting, but if you are wanting to build something bigger than just a sole practioner's office it is really the best way to go.Cassandra

 

[Pompal 09.]

Big Dog, cassandra, thanks for the info.  I'm happy as a Sole P., (and I have an umbrella insurance policy) but after your comments, I'll contact my tax lady and check  out the S-Corp. Thanks!

 

[Elliott N]

For those of you who own your businesses....

This might be a dumb question, but what is the difference between an S-Corp and a LLC?

 

[juls4pj]

Thanks all,I'm in the process of opening a wellness center that will have at least one other therapist and (probably) 2 yoga instructors.  I am now a sole proprietor but thinking about S-corp.  I'm talking to my accountant about everything next week and he's recommending S-corp so I'll probably head that way.

 

[Luann]

Pete,  It is my understanding that as a LLC you must have partners (more then one person must be President, VP, Sect, Treasurer).  With a Sub S you can have one person hold all the offices.  So almost any Sole P could become a Sub S.  I also believe the way you take out dispersements is different (dont know all the tax laws so I dont want to talk out of school).  With a Sub S you can pay yourself dividends out of the profits of the Corp.  I don't think you can do it as easily with a LLC.

 

[Edgar from Socal]

For those of you who own your businesses....

Pete,

It is my understanding that as a LLC you must have partners (more then one person must be President, VP, Sect, Treasurer).  

The MTs I know that have LLC's are all independant therapists.  They are the presidents of their companies.  To my knowledge, no one else is listed under any other capacities.  I could be wrong, but I will surely look into it some more.

 

[Senor Cardgage]

art-of-zen,  This is probably right.  I have to admit that the Sub Chapter S fit my situation perfectly so I did not investigate any further then that.  I probably should get more clarification so I do not mislead people.  Sorry if I gave anyone erroneous info.Big Dog