LLC question?

[update] Must reads for those looking to form an LLC.
http://www.martindale.com/business-law/article_Wealth-Strategies-Counsel_762402.htm

http://www.dunncarney.com/2007/06/l...mpanies-does-it-enhance-the-liability-shield/

Looking at converting an S Corp. into an LLC. Need some advice on how to. The agent/ manager we talked to wanted 22,000 to start the process then a yearly fee would be paid thereafter. If the business is sued I pay all travel, lodging, meals ect. fees, while they are representing the business. It seems expensive, does this sound right? Thanks to those who reply. Btw were thinking about converting to pay less in taxes and protect ourselves.

 

As in $22k? Correct me if I'm wrong but, as I recall when I had a S Corp, that means revenue is capped at =<$400k. If that's still the case, seems $22k is a pretty large expense.

I've had S, C & LLC. And other than how I paid myself I don't recall any specific tax advantage so guessing your savings comes from vendors?

As far as ongoing fees, is that to retain the/an attorney or is that for the annual "meeting"?

 

$22k to change you from an S-Corp to an LLC? Personally, I'd look elsewhere.

Both S-Corp and LLC are pass through taxation. Only real difference is S-Corp has to file business tax whereas LLC can be filed on personal tax unless there are more than one owner, then the LLC also files a business tax.

How many owners are there or will there be of the S-Corp or LLC?

 

22k, yes and basically the fees are a retainer, at least this was my take away from the meeting. This is a large company based in Chicago so we would also pay expenses incurred if they had to represent the company in a suit. They claimed the restructuring of the company would gain us at least a 12k a year savings by using deductions we haven't been using. I'm asking, where and how but I have no clue. We have a third party company that's been doing payroll and taxes as our CPA and I'm sure they would know of all the advantages. Is this company on BS then? 22k is nuts just to save 12k. That means we lose 10k plus whatever fees the first year. I just don't see the benefits they are trying to sell us. Thank you for the input.

 

There is and has been only one owner and would remain after the switch. Yeah looking at everything on the government site, it's a ninety dollar filing fee and all you need is a legal agent who would represent you and receive legal documents for the business in the future, I'm i wrong. I'm really starting to think this company is trying to scam us. Or at least make a quick 22k. Don't see where that amount is justified unless we actually need the legal service.

 

Some quick reading on my part...

Found the state I was in no longer has the 400k cap.

I would ask them to demonstrate it but a ~ 2 year ROI isn't bad unless you can get a better bang for your 22k. It just sounds high to me...that said only you know your business needs.

 

There is no cap, gross last year was above 1 million. Don't want to put the actual amount out there, but the benefits of converting don't seem to be there.

 

Yes our next meeting this was on the agenda. Thank you sir.

 

I am sure all it takes is some paperwork to be filed and govt fees. Fuck I will do it for 10k.

 

Yeah no doubt. That's a $12,000 instant savings right there. Your a fuc$ing genius sir.

 

So say you have business, there is a physical building people come into and out of, they buy your merchandise and you collect sales tax on the goods and services, your mark up is your profit. Now you want to protect yourself and your personal assets as well as the business from law suits. 1-Does an S corp. distinguish the business from the owners in a suit, and
2- wouldn't an LLC give you the option to a. Separate the business from the owner(s) and b. Separate the building from the merchandise, from the business thereby neither would liable for the other in a suit, protecting each from catastrophic lose? So if the business was sued only the business, not the building or merchandise or the owner, would face a suit? This is the difference between an S corp and LLC I thought, correct me if any if this is incorrect. I'm a little slow but I learn quick.

 

subbed. just got my business license and all my friends that majored in business were of no help on this subject, sorry for the piggyback, but thanks for the info

 

No problem, help is free. I'm trying to I guess justify spending 22k to convert from an S Corp to an LLC and am looking for insight from those who are wiser.

 

So long as you don't "pierce the veil" and that means no co-mingling company and personal funds the corporation (without negligence on your part) should shied you from a business liability.

I think to isolate the structure (building) from the retail/sales business I would lean towards putting it under a different Corp and lease the real estate to the retail business.

 

From what I've read you can layer an LLC, but doing so wont necessarily shield you or those layers from a suit due to wrong doing or negligence on the owners part. Even more so when it's a single owner in sole control of the business. Thank you.

 

An LLC is mainly designed to shield you the owner from personal liability. So if someone sues your store, that is an LLC, they cannot tie in your personal assets to their lawsuit.

 

Exactly. My question is: for those who have done this, what where the cost involved, meaning what did the agent charge. What were the savings in taxes, are there additional deductions when you convert, I'm almost certain there are not? I'm being told I will save 12k or more do to unused deductions, however our current CPA would, I assume, know of these deductions.

 

What agent are you referring to? You can be the agent or your wife or your brother. Doesn't have to be a lawyer type. I have a few LLCs although I've never converted from an s corp

 

We are consulting with a company out if Chicago, they would be the agent in this instance. I was under the assumption an agent had to be certified in the state where the business is and registered with and approved by the state. So what your saying is it's not difficult to become an agent, I was thinking you had to be a lawyer?

 

Well if the owner is not in the same state that might be an issue. Seriously you could probably get all of your answers at the SOS office for the state the business is in.