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Author Topic: How To Set Up My Business?  (Read 2176 times)

Offline AliciaH

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How To Set Up My Business?
« on: May 06, 2011, 01:49:16 PM »
We have an exisiting S-corp and even though the original service is not ag. oriented, were told by the lawyer to add my honey farm as a DBA.

Then, my new accountant says that, no, ag should be run on the personal side of the taxes on a Form F.

Now, my new accountant is also telling me that for liability reasons, I should talk to my lawyer about at least setting my the honey farm as an LLC.

I am so confused!  What are others out there doing?  This is from a federal standpoint, not state, so I'm hoping someone can shed some light on this for me?

Thanks!

Offline Shanevrr

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Re: How To Set Up My Business?
« Reply #1 on: May 06, 2011, 10:07:41 PM »
I like S corp because you can pay yourself a stock holder distribution and get out of paying some taxes
www.Valleybeesupply.com
"A responsible beekeeper is a successful one"
Shane C.

Offline caticind

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Re: How To Set Up My Business?
« Reply #2 on: May 16, 2011, 04:19:32 PM »
I wouldn't suggest running anything bee-related as unincorporated/sole proprietor.  At least get an LLC to defend you from personal liability if you are living within 5 miles of another person.  People like to sue in this country...

How to best manage for taxes is a different thing entirely.  LLC has the benefit that you can pass everything through to your personal taxes and not pay the corporate rate.  But no stock distribution.  Probably better if you are not generating a profit every year (can pass on the loss to offset a future year's profit) or if your personal income is lower/rate is lower.

Don't have personal experience with S-corps.
The bees would be no help; they would tumble over each other like golden babies and thrum wordlessly on the subjects of queens and sex and pollen-gluey feet. -Palimpsest

Offline AliciaH

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Re: How To Set Up My Business?
« Reply #3 on: May 16, 2011, 07:28:36 PM »
The S-corp has been okay, but in addition to the expense, I don't really want a 2nd company with that level of formality in the yearly paperwork.  Right now, our legal entity helps me keep that all straight, so I'm grateful to them.

We decided to go ahead and set up an LLC.  There are less expensive ways to go about liability coverage (an insurance rider, for example), but the basic question is that if there ever was a problem, would we want our personal assets accessible.  So, an LLC it is.  More money up front for a bit of insurance later.

I hate having to think like that, but in reality, if my honey company ever wants to expand to actually making something with the honey or wax, like sauces, etc., then I would have to go this route anyway.  The bright side is that it will already be done!

Thanks to you both!
Alicia

Offline Hethen57

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Re: How To Set Up My Business?
« Reply #4 on: May 20, 2011, 01:40:26 PM »
I think you made the right choice with an LLC.  S-Corps work best for service type businesses where you are able to pay yourself a regular salary which is less than what you expect to net, and then you can save some payroll taxes.  The more you can save, the more it is worth it, but tax preparation and annual minutes eat up $500 or so of that savings, so it has to be substantial to make sense.  I don't see a small honey business having salaried employees.
-Mike

Offline AliciaH

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Re: How To Set Up My Business?
« Reply #5 on: May 22, 2011, 12:54:41 PM »
I don't see a small honey business having salaried employees.

Or a salaried owner, either!   ;)

 

anything