Forms of Ownership

Last week I met with members of SCORE and let me tell you these old businessmen know their stuff. They showed me all the unseen expenses of owning and operating a business. By time I left there I had to go home and redo my business plan, recalculate my cost of operation and everything. I see it is not going to be as easy as I first though.
But the Questions I have is this, They told me to structure as a sole proprietorship vs an LLC or Corp and I did not need an EIN even though I had already retained one and told me to see if I could get it canceled and just use SSN. This would keep me from having to file Quarterly Federal Excise Tax Return (Form 720) and would only have to file Schedule C on my end of year taxes
I would appreciate input from others thanks

 

Plum, I see your here in NC, is SCORE also located in NC? I just started my business plan and want to make sure it is right from the get go. Thank you for your time.

 

Yes Just go to score.org nearest ones to you is in New Bern or Morehead City. You have to fill out a form and send it in to set up an appointment and here it took about 10 days

 

Thank you for the info.

 

I had to get one to file my 2290, how do you get around that?

 

I think i would make 2 more appointments, one with a Business lawyer and one with an accountant (try and get both of them to meet at the same time). They would be better able to explain the advantages to you from a legal and tax aspect to protect you and your family from any liability.

 

if you are driving the truck the only protection you have is insurance because you will get sued as the driver and as far as financial if you make a corp your name is still on all the documents and you will be held accountable it only becomes an advantage when you have multiple employees and property

 

I do not see why you would have to file a Form 720, that looks to be for wholesalers of fuel, and manufactures. There is a 12% excise on equipment purchases, but that is collected and paid by the retailer.

The SCORE advisers are correct that you do not need an EIN for a business, it is simpler to use SSN and will prevent certain required filings, some are dependent on the state of residence.

There are some tax advantages to a S Corp up to 70 or so employees, or if the income gets into the upper ranges of SS deductions. After that point C corp begins to have the advantage.

Protection from litigation varies by state, but overall isn't very good for any close held corporations, LLC, partnerships. Real protection kicks in when the entity becomes publicly held.

Not enough space to get deep into the details on the forum. backup SCORE advice by consulting a good accountant that does trucking.

 

thats not entirely true if you have a corporation that is clearly run seperately from your personal affairs You will be alright. If everything runs together, using corp funds to pay personal bills, using corp. money for personal use, etc. the court will allow the people suing you to "pierce the corparate veil" and go after you directly. The best thing to do is keep all of the business under the corporation and pay yourself a salary or a precentage after business expenses. You should see a lawyer when setting up a corporation, he can tell you how to run it to avoid losing personal property in case a of lawsuit.

 

Close held corporations have been held one and the same as the owner in multiple states under case law. The corporate shield was penetrated long ago for small close held, meaning one owner or family held corps. Very little protection under current legal opinion for these. It does vary by state somewhat.

This came about because of abuse and misuse, as usual.