Yes, you do. Well, sort of. Here's how it works. If I sue you in my state, and you've been doing business there, I'm going to check your registration first. If you aren't current as a registered foreign entity, you can't defend yourself in my state's court. Then I win our lawsuit. Pro legal advice, distilled: you want to win your lawsuit.
Let's say that we are doing business online. Our clients can be from any state, but we are located in Nevada. Wouldn't this considered doing business in Nevada? We would have no physical offices anywhere else. Otherwise the commerce falls in the interweb.
The "franchise" is what the state calls your entity. It doesn't mean you're a franchised business in the sense of an independently owned chain store.
Thanks for clearing that up.
Remember what I posted earlier:
"Doing the paperwork to organize a company yourself is easy. You want to hire a lawyer anyway, however, because drafting an operating agreement between you and your roommate is a pain in the ass with potential nasty repercussions if things go sour. And things can go sour more easily than you think."
LegalZoom will not protect your interests against your business partner, or, at best, will give you a form agreement that doesn't reflect your business needs.
You're not paying people like me to fill out a form. You're paying me to know what the form means and fix it so it doesn't fuck you over.
Exactly. The organizational costs we can deduct up the $5,000 the first year of business and amortize the rest over 180 months (15 years). It'd be worth our time to have it done.
You get LLC administrative treatment combined with S-Corp tax treatment. The main advantage of the former is that LLCs are significantly easier to administer and less of a pain in the ass to set up.
The main advantage of the latter is that you can structure distributions as dividends instead of self-employment wages and avoid some FICA and SS tax.
This is the part I'm getting confused one. So if we went ahead with the LLC (to be taxed like an S-Corp) - We wouldn't be available to structure the distributions as dividends? You would think that being taxed similar to an S-Corp that you could have the same pay structure as the S-Corp. This right here, is my main problem right now.
In the beginning it won't matter much, but as revenues climb we're talking some significant tax savings. That along with an accountable plan to squander some money out of the middle (the expenses).
Let's say that we are doing business online. Our clients can be from any state, but we are located in Nevada. Wouldn't this considered doing business in Nevada? We would have no physical offices anywhere else. Otherwise the commerce falls in the interweb.
The "franchise" is what the state calls your entity. It doesn't mean you're a franchised business in the sense of an independently owned chain store.
Thanks for clearing that up.
Remember what I posted earlier:
"Doing the paperwork to organize a company yourself is easy. You want to hire a lawyer anyway, however, because drafting an operating agreement between you and your roommate is a pain in the ass with potential nasty repercussions if things go sour. And things can go sour more easily than you think."
LegalZoom will not protect your interests against your business partner, or, at best, will give you a form agreement that doesn't reflect your business needs.
You're not paying people like me to fill out a form. You're paying me to know what the form means and fix it so it doesn't fuck you over.
Exactly. The organizational costs we can deduct up the $5,000 the first year of business and amortize the rest over 180 months (15 years). It'd be worth our time to have it done.
Quote: (07-30-2013 01:47 PM)Cruisen_Chubby Wrote:
Does anyone know what the differences would be if I created an LLC that is to be taxed as an S-Corp as opposed to just creating an S-Corp itself?
You get LLC administrative treatment combined with S-Corp tax treatment. The main advantage of the former is that LLCs are significantly easier to administer and less of a pain in the ass to set up.
The main advantage of the latter is that you can structure distributions as dividends instead of self-employment wages and avoid some FICA and SS tax.
This is the part I'm getting confused one. So if we went ahead with the LLC (to be taxed like an S-Corp) - We wouldn't be available to structure the distributions as dividends? You would think that being taxed similar to an S-Corp that you could have the same pay structure as the S-Corp. This right here, is my main problem right now.
In the beginning it won't matter much, but as revenues climb we're talking some significant tax savings. That along with an accountable plan to squander some money out of the middle (the expenses).