type of business

[progressivetactics]

I was wondering what all the school owners here have their business listed as, LLC,Sole Propriotorship, or S-corp---And why they chose that way.

Any help would be appreciated!

bb

 

[lvwhitebir]

An LLC. My instructor had talked to his attorney and said it was the best bet and I went along with it too. It offers the most protection with the least hassle for small business owners. An S-Corp requires a board and regular, documented meetings. Can't think why the sole-proprietorship was not appropriate...

Best bet, of course, is to talk to your lawyer and/or accountant.

WhiteBirch

 

[progressivetactics]

the sole propriotorship doesn't protect person assets as well as LLC. So if you, or an employee hurts some one, they could take your house in a Sole Propriotorship.

THe S-corp does require officers, presidents, etc. appointed positions, but if it is a 1 man/woman show...then they all could be appointed to that 1 person, and a meeting (tax deductable) can be over dinner, with anyone you choose!
I am not arguing with you, and planned on LLC, myself, but after discussing with accountant the other day, he was really pushing S-corp, and just wanted different opinions......

Thank you very much.

 

[Cruentus]

Differen't Corps are designed to fit different needs. If you want protection, though, I think LLC might be your best bet.

 

[Ender]

an LLC is a limited liability company. Each partner has a limited share in the company with respect to profits and liability. The liability, as I recall, is only limited to company assest and not personal assests.

 

[Ender]

oops...assets.

 

[lvwhitebir]

Originally posted by progressivetactics
THe S-corp does require officers, presidents, etc. appointed positions, but if it is a 1 man/woman show...then they all could be appointed to that 1 person, and a meeting (tax deductable) can be over dinner, with anyone you choose!
I am not arguing with you, and planned on LLC, myself, but after discussing with accountant the other day, he was really pushing S-corp, and just wanted different opinions......

The problem I've heard about with the meetings is that they have to be regularly scheduled and documented. One slip up and you don't fit into the S-corp and the lawsuit goes through. I never really talked to an accountant about it though, although my brother that helped set it up is a tax lawyer.

WhiteBirch

 

[teej]

I went to the library just today and left with 3 books, 2 on forming a corpoation and one on making a business plan. All of the books have either blank forms or examples of forms.

I am not a laywer, but my understanding is that an S-corp has a lot of tax advantages. I am listed as President, Secretary, Treasure, & Director. As far as the meeting, you only have to have one annual meeting and the form from this meeting has to be sent in between Jan. 1st and March something. One of the books I got today even had a meeting form in it. You just fill in the blanks, topics of discussion which will be easy. You just list results from last year, any new plans for the upcoming year. Please, if anyone reading knows better, please correct me so I know also.

Here is a forming a corp. checklist;

Decide a corporate name

prepare & file Articles of Incorporation
(check with you Dept. of State web site, mine has forms you can download, fill in the blanks and file)

send for Fed employer ID number

meet with accountant
(you should really ask around town, find a good "business" account, make an appointment to meet and talk over with them your plans. Accountant will tell you the best to set up, LLC or Corp, remember the accounant will be doing your business taxes. It is very important to have one picked out for your success team)

Obtain corp. seal (I hear you will never use one and don't need one for this business, but I advice you ask others in the business)

File fictitious name
(on my dept. of state site, I was able to search on line the name I am using to make sure noone else had it. I also checked owners names of the same as mine, so I know that in my state, I will use my middle initial to distinguish myself from other corp. owners with the same name. this was just my preference)

get licenses

open bank account

file for S-corp with IRS
(the articles you file will be for a simple corporation, after you get your copies back from your state, you file form 2553, with the IRS for your S-corp status.)

I am just sharing some of the stuff I have learned, it may not be correct. I hope others will share their knowledge as well.

Prices I have gotten from attorneys were between $500-$900 to have them form a corp or LLC. I can download from MY STATES corp site, the forms to file to form either, hopefully you can too in your state. Of course it is advisable to have an attorney look them over. I filled mine out and e-mailed them to a friend attorney to have him look them over.

Best of luck, I need more help in this area too,.

 

[CanuckMA]

I used to have the equivalent of an S-Corp in Canada. Wife and I were the board. Once a year, we'd go to a nice dinner and then copy last year's minutes. They contained:

1) a motion to accept the agenda
2) a motion to accept last year's minutes
3) a motion to keep the current accounting firm
4) a motion to adjourn


A lot of self-help books and packages on incorporating will contain examples and blank forms. They will also have blanks of share certificates.

 

[True2Kenpo]

Originally posted by teej
I went to the library just today and left with 3 books, 2 on forming a corpoation and one on making a business plan. All of the books have either blank forms or examples of forms.

I am not a laywer, but my understanding is that an S-corp has a lot of tax advantages. I am listed as President, Secretary, Treasure, & Director. As far as the meeting, you only have to have one annual meeting and the form from this meeting has to be sent in between Jan. 1st and March something. One of the books I got today even had a meeting form in it. You just fill in the blanks, topics of discussion which will be easy. You just list results from last year, any new plans for the upcoming year. Please, if anyone reading knows better, please correct me so I know also.

Here is a forming a corp. checklist;

Decide a corporate name

prepare & file Articles of Incorporation
(check with you Dept. of State web site, mine has forms you can download, fill in the blanks and file)

send for Fed employer ID number

meet with accountant
(you should really ask around town, find a good "business" account, make an appointment to meet and talk over with them your plans. Accountant will tell you the best to set up, LLC or Corp, remember the accounant will be doing your business taxes. It is very important to have one picked out for your success team)

Obtain corp. seal (I hear you will never use one and don't need one for this business, but I advice you ask others in the business)

File fictitious name
(on my dept. of state site, I was able to search on line the name I am using to make sure noone else had it. I also checked owners names of the same as mine, so I know that in my state, I will use my middle initial to distinguish myself from other corp. owners with the same name. this was just my preference)

get licenses

open bank account

file for S-corp with IRS
(the articles you file will be for a simple corporation, after you get your copies back from your state, you file form 2553, with the IRS for your S-corp status.)

I am just sharing some of the stuff I have learned, it may not be correct. I hope others will share their knowledge as well.

Prices I have gotten from attorneys were between $500-$900 to have them form a corp or LLC. I can download from MY STATES corp site, the forms to file to form either, hopefully you can too in your state. Of course it is advisable to have an attorney look them over. I filled mine out and e-mailed them to a friend attorney to have him look them over.

Best of luck, I need more help in this area too,.

Great post!

I wanted to ask however, were you required to have all of the forms turned in and responded to before you opened your doors as a school?

I am about to dive into an S-Corp, but I feel I will be signing the lease and so on before I have all that done... do you recommend having the paperwork done first?

Respectfully,
Joshua Ryer

 

[teej]

True2Kenpo

Stop!!! Don't do it! Again, I am not an attorney and I have to advise you to consult with an attorney and or accountant.

The corporation is to protect you and your personal assets. Home, car, savings, investments. anything of value. Never sign anything with your name. Otherwise, my understanding is that then they can come after you personally should any problems arise.

Your profile says you started in FL. In FL, you can be the sole owner of either an S-corp or LLC. So you form your corp and you list yourself as the President, Secretary, Director, and Treasurer.
After you get your papers approved by your state, your title is now John Doe, PSDT. You must sign EVERYTHING pertaining to your business like that. Never, ever, leave off your "PSDT". Sign checks, business orders, contracts, electric and phone hook ups, advertising and yellow page agreements, etc, everything with your title.

This includes your lease. Lets say you sign a 3 yr lease personally with out the title after your name and you ended up closing your doors after 1 yr. The land lord comes after you for the other 2 yrs of lease you signed for. The land lord can only get from the corp. if the corp has the money. If you sign the lease personally, the landlord can come after you and your assets for the rest of the money you guaranteed him signing the lease. Basically, once you have your corp. formed, and sign everything with your corp. title, and RUN your business as a Corp, (filing your yearly papers, minutes, etc) all anyone can get is what the corp. has. The corp. protects you as long as you run it as a corp.

Another example. You sign the 3 yr lease personally without a title (PSDT). You just guaranteed the lease personally. After 1 yr. you sell your studio to someone. A few months down the road, the new owners close up. The land lord comes after you for the rest of the rent because your name is on it. Or the new owners have some kind of accident on the premises and don't have insurance, the accident victims sue the owners. Your personal name is on the lease, you may get dragged into the suit also.

I don't know about selling a school, but I think with a corp, you would sell the corp. with the business, now you are seperated from anything the new owners do. Again, this is just my extremely limited understanding. I am always trying to learn more and this forum is a chance for all of us to network. (please anyone reading correct me or help further my understanding)

So with this in mind, some landlords won't let you sign a lease as a corp. owner. They know the past history of the martial arts school owner. The landlord wants you to sign personally to guarantee him his rent. They want a 3 yr. lease. Your choice is to not sign. (if at all possible, find somewhere that you can sign as a corp. owner}Look else where. If this is not an option, you have to have this location, then try to negotiate that you will sign for the first year personally on the condition that after the yr is up, the lease is resigned by you, with your corporate title (PSDT) so the corporation is taking over the lease for the remaining 2 yrs.

Having a printed business plan, start up money and/or bank loans or investors, may help show a land lord you are a professional and ease their concerns to let you sign as a corp.

Anyway, sorry for the long wind. Fill out corp. article of corp. forms. You can do this in a 1/2 hr or less, if you have the forms to fill out. Use your home address to form the corp. after you have a signed lease, send in a change of address for the corp. with the leased space as the corp. address. Once your state receives your articles of incorporation, your corp. should be formed within 10 days. After you get your corp. articles back from you state, then you file a seperate form with the IRS to make your corp. an "S" corp.

Hope this helps True2Kenpo, don't sign personally.
Yours in Kenpo,
Teej