Do I need and LLC or a corporation?

Or neither. I am not big time or anything yet. But I got a call from the BBB the other day because people were inquiring there about me, and it got me to thinking maybe I should have something more formal than a trade name registered at town hall. What are your thoughts?

Edited: 06/26/2010 at 03:25AM

Tom McGiveron

Residential Real Estate Agent · Moriches, NY

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Icon_minipost Mar 12 '07, 10:07 PM

what type of call did you get from the BBB?

what is your business?

Edited: 06/26/2010 at 03:25AM

Minna Reid

Real Estate Consultant · Tolland, Connecticut

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Icon_minipost Mar 13 '07, 05:03 AM

Well I advertise as Northeast Home Buyers to buy houses.
They were just calling to let me know people were calling to check me out, no complaints or anything, and did I want to become a member.

Edited: 06/26/2010 at 03:25AM

Tom McGiveron

Residential Real Estate Agent · Moriches, NY

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Icon_minipost Mar 13 '07, 06:43 PM

where have you filed this business name?

Edited: 06/26/2010 at 03:25AM

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Icon_minipost Mar 14 '07, 03:51 AM

I always say start a business. You get tax advantages to being a business and it doesnt take a lot of money to actually set it up. I would suggest LLC but I am not an attorney or anything. I ony suggest that because its a lot less paperwork then a corp and if your still what I call a W2 earner you can pass your business deductions through your personal income to get more tax deductions. Later on when you grow you can always set up a corp. There is never a harm in setting up a business except that is costs money and that can be done inexpensively especially when you do it yourself. Again just my opinion I am not a lawyer.

Edited: 06/26/2010 at 03:25AM

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Icon_minipost Mar 14 '07, 04:29 AM

Originally posted by "missty1029"

You get tax advantages to being a business

What are the tax advantages available to a business that you cannot also get as a sole proprietor?

Edited: 06/26/2010 at 03:25AM

Minna Reid

Real Estate Consultant · Tolland, Connecticut

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Icon_minipost Mar 14 '07, 06:27 AM

noobdog - I just filed the trade name at my local town hall so it was legal for me to call myself that.

If I'm an LLC all I really do is limit my liabilty. On a small time time scale ( as in I plan to buy 2 more properties this just to rehab) is it really necessary? Is there a tax benefit to being an LLC?
As far as incorporating - I really dont even know how that differs from an LLC, honestly. But would love to, if someone wants to share.

Edited: 06/26/2010 at 03:25AM

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Icon_minipost Mar 14 '07, 10:47 PM

As a Sole P you lose some tax-free fringe benefits because you cannot participate in company-funded employee benefit plans like medical insurance and retirement plans. Second, since the owner and the business are inseparable, whoever sues the business actually sues the owner. The owner's personal exposure is unlimited. Finally, the business owner is personally liable for the debts of the company, and unfortunately, personal assets can be taken to pay company obligations.
Thats not to say dont do a Sole P I just think incorporating is better.
And when you incorporate it just means you creating a business entity. It can apply to a Corporation or a LLC.

Edited: 06/26/2010 at 03:25AM

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Icon_minipost Mar 15 '07, 12:23 AM

i'm not sure where it's at, but there are posts on here that go into a bit of detail on llc's and s-corp's. they differentiate between which is better for rehabs, and which is better for rentals. they even go into a bit of detail regarding tax and personal liabilities... good luck finding them...

Edited: 06/26/2010 at 03:25AM