I just thought I had everything ready to go! All neatly tucked in folders on my desktop and from what this man on the phone at the IRS is telling me, I have to choose one or the other out of a partnership or LLC. This is now not making sense and I thought I had it all down and ready to go. Is there anyone out there who is familiar with this stuff? I hate technical jargan. Please feel free to PM me if you'd like.

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"Tude"

" A good attitude will get you through almost anything"

Ok, I finally got my noggin back on and it figured out. The man I was speaking with contradicted himself a couple times so my head's been swimming. Back to LLC

__________________
"Tude"

" A good attitude will get you through almost anything"

LLC is Limited Liability Corporation the tax advantages are better in most aspect than a S Corp or a Corp. LLC doesn't do the double taxation as some of the other types of corps are prone to do.
An LLC works like this; the owners' personal assets are protected from creditors of the corporation. So if your company owes some one money and they sue the company and get a judgment against your corporation saying that it owes a creditor $100,000, you can't be forced to use your personal assets, retirement or your house, to pay the debt. Any assets that the Corp owns can have liens attached and in some states you can be forced to sell them to repay the debt.

There are some things that the corporation cannot protect your personal assets from they are: You personally and directly injure or kill some one in an accident.
If you personally guarantee a loan or other type of debt for the corp and the corp defaults on the loan or debt.
You fail to pay employee's withholding taxes after you withhold them from the employees pay.
You deliberately commit fraud or commit a crime.
If you use the company as a part of your personal affairs and don't keep the two separated with supporting documentation.

The last reason can cause some serious complications which are: In some instances the courts can rule you are personally liable if you do not keep the separation of personal and corp clear, and documented, you fail to issue stock to stockholders holders, or you fail to have stock holder meetings and keep the minutes for them.
Documentation is critical to protect yourself and your personal assets. You can purchase a liability policy that can protect you to a certain degree if you injure some one or some one is on your businesses property and gets hurt. Of course the protection is for the amount of the policy limits. It won't cover any bills that the company doesn't pay nor will it protect the assets from being impounded and sold to repay the debt.

You've gotten some good advice. On taxes, you have some choices, you can be taxed as an S-Corp, a partnership, or list the income on a Schedule C on your 1040. I suggest the Schedule C if you're a sole member LLC.

Secondly, if you want to take money out of your LLC checking for your self, write yourself a check and put DISPENSATION on the memo line. DO NOT withdrawl from the debit card, that blurs the line between you and the LLC.

I have seen many cases of LLC.
They are good to have because of what Nightwind says. However, the liability issues are alot more complex. I have seen very little lawsuits that do not name the entity and the principals.

This is true and normal in any case the owners are going to be named. Some states have laws that are geared more toward the protection of the company than any one that wants to sue.

Example: My company was incorporated in DE and De law states that anyone desiring to file a suit against the company can do so, however the owners and stock holders are not public record and require a court order to access. I'm not positive but I think Nevada has similar laws in place. Those two states (there may be more) are two of the best to form your corporation in. I hired an attorney to handle the formation,stocks and other required documents as well as act as the agent for the company.

That is one of the reasons that Delaware is used by alot of attorney's.

However, attorney suing usually finds owners info, not exactly sure how but they seem to have their ways.

Anyone involved in LLC with a trucking company needs to do this with an attorney familiar with that entity. I have seen attorney's (mine in fact) back in 1999, who did the paperwork as an S-corp. He thought he knew what was best tax wise and all. Had to reeducate him. I didn't need his tax knowledge, did it for over 20 years.

Thank you NightWind and everyone else too The LLC looks like the best way to go. That was my original intent until I got on the phone yesterday with some IRS guy. He literally had my head spinning as I'm sure you can tell from my post! You also have me more information that I wasn't aware of so it's very appreciated.

I called this man and said I needed a EIN. I told him it was for an LLC for myself and a partner, he then gets me totally confused by bringing in the "parter" part of my conversation and well, it just got worse from there.

I can't afford an attorney at this point so was hoping I could just get this done and out of the way. I don't want to be sitting here waiting on paperwork when we can actually start working.

Here's another dumb question: (like i said, i get totally boggled over technical jargan) If I apply for my EIN now, and that truck sits there from now through March while we're earning our operating money, does it mess with taxes in any way?

__________________
"Tude"

" A good attitude will get you through almost anything"

No the EIN won't have an effect on the taxes unless you use it to produce income or give it to someone that you eventually do business with and they send in something to the IRS.
One thing you do need to understand you will most likely have to pay the annual 2290 heavy highway use tax UNLESS you do not have a tag and the truck isn't registered. It can be titled in your name and not have a tag on it and you'd more than likely be OK. Once you put tags on it the IRS will want the 2290 tax money. it then unless you have someway to document that the truck hasn't moved during that time.
You will need to use your EIN when you get your DOT number, apply for your authority and insurance, along with your IFTA number and stickers. Also when you set up the company banking.Be sure to keep the company funds separated from your personal monies. Also you can do what they call "Owner Draws" against the company account, be sure that you are using it for the company, keep the records and if you use the money for personal reasons then expect to pay income taxes on it.

It cost around $300.00 to $500.00 to have a service do the incorporation papers, some are more some are less and about 24-48 hours unless you do it on a Friday. If you use a service get the ball rolling a week ahead. You do NOT have to have the incorporation done to work, however the risk is there and you are vulnerable to lawsuits. I have the forms to do the LLC, S or C corp myself but I do NOT recommend you doing them unless you have a lawyer look over them.

While you are earning your start up money be sure to get the company books set up and learn about filing your quarterly estimated taxes, fuel and mileage reports. If you are going to have a partner that can complicate things to a certain degree as the EIN will have either your partners or your social security number linked to it but not both. Ultimately that makes that person responsible for the company taxes. Also since you have a partner I'd have a contract between myself and them outlining the terms, what the buy out conditions etc will be in the event that you decide to dissolve the partnership.

Thanks for all the great info! I've thought about having something drawn up for protection. For instance, right now my son is single. What if the woman he marries some day, turns out to be a nightmare for some crazy reason, and we lost our business due to it etc.

The truck isn't registered yet so that's not a problem. We found out it would run $800.00 for the first 7 months here. I'll definitely get the books to be going over for filing. That's a great suggestion and one I'd not thought of getting done yet. I'll have enough time to look them over and get used to them now.

I think I'm starting to breathe a little easier lol!

__________________
"Tude"

" A good attitude will get you through almost anything"