Corporation or LLC

[HelgeLubmann]

I'm looking to incorporate but not sure which way to go. I'm leaning towards LLC but heard that since we are a professional occupation that California may not allow us to form an LLC. Any help on this matter is appreciated.

Thank You,

Helge Lubmann

 

[Roger Murdock]

I'm looking to incorporate but not sure which way to go. I'm leaning towards LLC but heard that since we are a professional occupation that California may not allow us to form an LLC. Any help on this matter is appreciated.

Thank You,

Helge Lubmann

You should seek professional advice from

1) An attorney
2) An accountant

 

[sunnycal]

I'm looking to incorporate but not sure which way to go. I'm leaning towards LLC but heard that since we are a professional occupation that California may not allow us to form an LLC. Any help on this matter is appreciated.

Thank You,

Helge Lubmann

You need to get a legal opinion but I believe that you can't do an LLC when it requires a professional license. Instead, you will want to do an "S" corp which gives you all the protection of a corp. but it is what is known as a "pass through" entity in which any income received will pass through to you as the owner but you will get all of the business deductions etc.

 

[Smokehouse]

You need to get a legal opinion but I believe that you can't do an LLC when it requires a professional license. Instead, you will want to do an "S" corp which gives you all the protection of a corp. but it is what is known as a "pass through" entity in which any income received will pass through to you as the owner but you will get all of the business deductions etc.

What he said!

Definately check with an attorney.

 

[Blueprint]

As a 1 man band, "S" corp is the way to go. Do your research and talk to who ever you need to, including legal, to get a good understanding of what you are walking into.

 

[Ron D. in NWA]

You need to get a legal opinion but I believe that you can't do an LLC when it requires a professional license. Instead, you will want to do an "S" corp which gives you all the protection of a corp. but it is what is known as a "pass through" entity in which any income received will pass through to you as the owner but you will get all of the business deductions etc.

Sunnycal, I agree that legal advice should be sought before making any changes like this. But it is possible to be an LLC (at least in Arkansas) with a professional license. My business is an LLC but tax wise is treated as a "S" corporation. This was set up by a lawyer and accountant so I am sure this is legal and possible (it better be right for what I had to pay them). The accountant really didn't want me to do a LLC because there is more cost involved than just being a sole proprietor, but the lawyer advised me to do this to separate the business assets from personal assets.

 

[Mountain Man]

It really depends on YOUR state's laws, so ask your CPA or attorney which is better. You can also do a search, this question has been hashed out at least a dozen times a year.

 

[sunnycal]

Sunnycal, I agree that legal advice should be sought before making any changes like this. But it is possible to be an LLC (at least in Arkansas) with a professional license. My business is an LLC but tax wise is treated as a "S" corporation. This was set up by a lawyer and accountant so I am sure this is legal and possible (it better be right for what I had to pay them). The accountant really didn't want me to do a LLC because there is more cost involved than just being a sole proprietor, but the lawyer advised me to do this to separate the business assets from personal assets.

In CA you can't have an LLC as a professional licensed appraiser. My accountant advised that an LLC actually pays higher taxes and is more complicated for accounting purposes than and S-corp. I am not sure what the lawyer means because as long as you have a corp. then your personal assets are protected as long as there is no co-mingling.

 

[mjcrodgers]

Definitely talk to your CPA and lawyer first. I went through this and 2005 and was told by my CPA that an S corp was the way to go, so far it has worked out with no problems. FYI, CA charges a "corporation tax" that has been about $800 a year for me, no matter what the corporation makes or doesn't make. I think they waved it the first year.

 

[maddmims]

"S" Corporation.