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Posted: 7/1/2003 8:34:20 AM EDT
[Last Edit: 7/1/2003 9:51:32 AM EDT by Quarterbore]
I am looking to file my papers to form a corp. I need to do this fairly soon as I have a pair of NFA weapons that are comming into the state and I want to put these on the corp... As some may know, I am quite interested in starting a small business to make some of the small items that none of the manufacturers have been willing or able to make. My initial corp will be established with the purpose of buying and selling information, e-commerce activities (I have been approved to be a Knights Armament Dealer), plus metal fabrication and repair.... (Make gun parts!) plus other legal activities... Oh yea, this is part time stuff as my day job pays the bills! I also want the MGs to go onto the corp as the corp will need these to perform product R&D or to work on customer's parts.
Link Posted: 7/1/2003 8:39:53 AM EDT
Ooops... I remembered a point... I think I need a full corp because of the following little snippet...
A LLC functions as a limited liability corporation, but is taxed and operated in a way that is most consistent with a Partnership. However, one must ensure that a Limited Liability business does not have more than two of the four qualities that characterize a corporation (limited liability concerning assets; continuity of life; centralization of management; the ability to transfer ownership interests). If more than two of these qualities are met, the Limited Liability becomes a Corporation and is taxed accordingly.
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What I want to do fits all four of those categories as listed... I am still interested in oppinions but I think I need the full corp... I have a date with an Attorney in a couple days but I wanted some advise (unprofessionally) before I sit with someone on the clock!
Link Posted: 7/1/2003 9:05:28 AM EDT
Build up a machineshop, and get a manufacturers license. Own all the class3 you want, hell, you dont even need to worry about pre or post-86 [:D] Im planning on doing just that myself, probably after I get out of college as I wont have much free time until then.
Link Posted: 7/1/2003 9:43:02 AM EDT
No LLC. Most states require a partner for a LLC. For your situation, I don't think you would find any benefits in an LLC. S-corp is the best for a small business. The owner only pays the taxes on income. In a C-corp the corporation is taxed and the owner is taxed on his income.
Link Posted: 7/1/2003 10:03:15 AM EDT
LLCs cost more to register each year as opposed to corporations (200 vs 50 in IL I believe, would have to look up for exact figures). Definitely do not be a C-corp, s-corp would be the way to go. I believe you could be an LLC, but LLC's can chose to be taxed as a corporation (S) or a partnership. Speak to a good accountant, get several opinions.
Link Posted: 7/1/2003 10:24:07 AM EDT
S-Corp!
Link Posted: 7/1/2003 10:27:58 AM EDT
[Last Edit: 7/1/2003 10:28:24 AM EDT by osprey21]
Definitely an S-corp.
Link Posted: 7/1/2003 10:47:38 AM EDT
In my state anyway, LLCs can have just one member. If not, make your wife, mom, etc. the other member. LLCs are better if you are not going to be making a substantial amount of money. If you are going to be making quite a bit, the S is better because you can avoid payroll taxes on some of your income.
Link Posted: 7/1/2003 10:55:34 AM EDT
Originally Posted By imposter: In my state anyway, LLCs can have just one member.
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this may be an east vs. west coast historical legal precedent as wa also allows for one member llc's. check the books in pa, but i'm willing to bet it's strictly partnerships.
Link Posted: 7/1/2003 11:47:50 AM EDT
Originally Posted By imposter: In my state anyway, LLCs can have just one member. If not, make your wife, mom, etc. the other member. LLCs are better if you are not going to be making a substantial amount of money. If you are going to be making quite a bit, the S is better because you can avoid payroll taxes on some of your income.
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Both my wife and I are members of our LLC here in ID. What imposter states is exactly what we've heard (from a CPA) as well. Good luck, Kevin
Link Posted: 7/1/2003 12:09:50 PM EDT
[Last Edit: 7/1/2003 12:10:38 PM EDT by Phil_A_Steen]
OK, Quarterbore, here's a solid piece of advice. Seek professional counsel. This thread is full of conflicting, incomplete and erroneous information, including the following:
-A LLC functions as a limited liability corporation, but is taxed and operated in a way that is most consistent with a Partnership. However, one must ensure that a Limited Liability business does not have more than two of the four qualities that characterize a corporation (limited liability concerning assets; continuity of life; centralization of management; the ability to transfer ownership interests). If more than two of these qualities are met, the Limited Liability becomes a Corporation and is taxed accordingly. [red]Incomplete. An LLC is a "check-the-box" entity. You can elect corporate or partnership treatment. Even if you elect corporate, you can still qualify as an S-corp.[/red] No LLC. Most states require a partner for a LLC. For your situation, I don't think you would find any benefits in an LLC. [red]Incorrect statement[/red] S-corp is the best for a small business. The owner only pays the taxes on income. In a C-corp the corporation is taxed and the owner is taxed on his income. [red]True insofar as it relates to S vs. C corp distinction. However, S corps do not accumulate Net Operating Losses, something important in a start-up business that may lose money for a few years. Also, this doesn't address the LLC vs. S corp issue[/red] LLCs are better if you are not going to be making a substantial amount of money. [red]This statement has no basis.[/red] If you are going to be making quite a bit, the S is better because you can avoid payroll taxes on some of your income. [red]Anyone have a source for this?[/red]
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Link Posted: 7/1/2003 6:05:30 PM EDT
Thanks for all the advise... I am taking notes on what to ask!!! I looked and it apears that a LLC in PA can be a single person but I will need to confirm... As for pulling earnings out of the corp, I would honestly rather just leave the earnings in the corp if at all possible at least for quite some time in the future? I figure if the corp has left over profits the corp can invest in weapons, tools, parts, or perhaps realestate? So, I am not worried about the fact that the corp could someday have a sizable amount of assets that I may be taxed on as by then I may be retired (I am 33) and my kids could be running the show?
Link Posted: 7/1/2003 6:31:56 PM EDT
If the business makes the money the business keeps the money in an LLC. Of course the risk is also with the company so if you get sued or have an insurance claim with an LLC they can only take what is tied up as a business asset. I think with an S-Corp your personal assets could also be tied up, hence the term “Limited Liability Corporation – LLC.”
Link Posted: 7/1/2003 6:42:32 PM EDT
[Last Edit: 7/1/2003 6:46:08 PM EDT by D348]
S- corps enjoy limited liability as long as you treat it as a corp. Same as the LLC. LLC is a partnership not a corporation.
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