To Inc. or not to Inc. - tanTALK

sunkissedtan · 12-23-2003, 10:10 AM

Who here is an Co., Inc or LLC? At the present time I am neither, I am wondering if I should or not. any suggestions? What are the advantages, if any, of becoming an LLC or whatever? Are there any tax advantages? My acountant pretty much said that it was a personal choice - what do you think?

Junebug · 12-23-2003, 12:57 PM

I have discussed this with a lawyer several times and he stands firm that unless you have a chain of salons that it is not necessary to incorporate. He says that this only leads to strick book-keeping and it does not protect the name of your salon. The most important thing is to be well insured. I carry a one million cancer policy and a one million personal injury policy. According to the lawyer, this is more than adequate, since we are not considered a high risk business. Having the customers sign a release form and the unltraviolet radiation concent form also protects you and shows that the consumer has made an informed descision. Hopes this helps...

Junebug · 12-23-2003, 01:01 PM

my spelling is off today, I should have double checked...(consent and decision)...

pam · 12-23-2003, 03:36 PM

I am not sure what your lawyer meant when he said that we are not a high risk business. Genrally insurers won't touch tanning salons because of the amount of risk involved--whether real or perceived. That is why the specialty companies exist. Incorporation can protect you and your family personally against losses or suits against the business. I would do a little more checking if I were you.

Pam

mouthybrat · 12-23-2003, 05:06 PM

The advantage of becoming an Limited Liability Company is exactly what the name suggests...Limited liability...The liability is limited to the buiness itself, not the person or persons who own it. If the business fails, the debts belong to the buiness and the creditors are limited to getting their money only from the liquidation of the business and not the individuals themselves.

Hope the info helps!

Neon Beach · 12-24-2003, 08:33 AM

Mouthbrat is correct. I just incorporated, as of Dec. 1st. Here in Ontario, another advantage is the drop in tax rates, and the owner who may have been taking a draw from the business can now go on payroll and that pay becomes an deductible expense.

sunkissedtan · 12-24-2003, 09:39 AM

Thanks for the info. Yes it does help, I think I will go the LLC route for now. Small salon, small town. But I think I would like the salon separate from personal, ya' know.

globaltanning · 12-27-2003, 10:48 AM

INC = Most protection + Most Taxes (Inc Income + Personal Income both)
LLC = Some Protection + Taxed at Personal Income
Partnership/soleP = No protection + Taxed at Personal Income

LLC was the choice for me, it provides the best mixture of protection with liablities. Althought the INC does provide more PROTECTION, (THE LLC IS NOT FULLY PROTECTED, IT does have some downfalls that allow for some personal assets under certain circumstances to be accessed by debitors if the need) The INC also allows for double taxation. A new tax allowance for anyone over a certain gross amount allows the INC and both LLC to use up to 100K to purchase equipment for use of the company (dual use allowed personal/business). This 100K is taken off the company before the bottom line, so more gets to benefit the LLC/YOU.

There is a new choice called an LLP and LLLP They stand for Limited Liability Partnership and Limitied Liability Limited Partnership. They pretty much have the same benefits as an LLC with a little less protection, but a little more pass thru on the REVENUE side. CONSULT YOUR ATTORNEY IS THE BOTTOM LINE! They dont get the big bucks for nothing!

soapking · 12-30-2003, 03:39 AM

Junebug..you need to find yourself a new lawyer...You should, and every business should. I admit, I am not a lawyer, but having researched the legalities, and talking to some of the most successful business people for advice, including SBA and SCORE..they all strongly suggested an LLC or the least, an S-corp..it gives an umbrella of protection.. I went LLC, because everyone that mentored me, suggested it as the best entity. Call another lawyer. or a CPA.

TanningEmporium · 12-30-2003, 07:20 AM

I am C-corp..which protects me and my home assets, if anyone ever had or tried to sue my business, none of my personal assets would be touched. When you go s-corp you personel assets are not as protected and yes with a s-corp both incomes are effected, not with a c-corp. Did it all myself and it was much cheaper than using a lawyer. I have taken several free classes at our local college and the business information you are looking for can be learned there or at your local library..

12-23-2003, 10:10 AM	#1 (permalink)
sunkissedtan I'm Banned Join Date: Jul 9 2003 Location: Funky Town Posts: 354 Rep Power: 0	Who here is an Co., Inc or LLC? At the present time I am neither, I am wondering if I should or not. any suggestions? What are the advantages, if any, of becoming an LLC or whatever? Are there any tax advantages? My acountant pretty much said that it was a personal choice - what do you think?

12-23-2003, 12:57 PM	#2 (permalink)
Junebug Join Date: Nov 11 2003 Posts: 48 Rep Power: 0	I have discussed this with a lawyer several times and he stands firm that unless you have a chain of salons that it is not necessary to incorporate. He says that this only leads to strick book-keeping and it does not protect the name of your salon. The most important thing is to be well insured. I carry a one million cancer policy and a one million personal injury policy. According to the lawyer, this is more than adequate, since we are not considered a high risk business. Having the customers sign a release form and the unltraviolet radiation concent form also protects you and shows that the consumer has made an informed descision. Hopes this helps...

12-23-2003, 01:01 PM	#3 (permalink)
Junebug Join Date: Nov 11 2003 Posts: 48 Rep Power: 0	my spelling is off today, I should have double checked...(consent and decision)...

12-23-2003, 03:36 PM	#4 (permalink)
pam I'm Banned Join Date: Oct 29 2001 Location: USA Posts: 3,893 Rep Power: 0	I am not sure what your lawyer meant when he said that we are not a high risk business. Genrally insurers won't touch tanning salons because of the amount of risk involved--whether real or perceived. That is why the specialty companies exist. Incorporation can protect you and your family personally against losses or suits against the business. I would do a little more checking if I were you. Pam

12-23-2003, 05:06 PM	#5 (permalink)
mouthybrat Join Date: Nov 9 2003 Posts: 589 Rep Power: 21	The advantage of becoming an Limited Liability Company is exactly what the name suggests...Limited liability...The liability is limited to the buiness itself, not the person or persons who own it. If the business fails, the debts belong to the buiness and the creditors are limited to getting their money only from the liquidation of the business and not the individuals themselves. Hope the info helps!

12-24-2003, 08:33 AM	#6 (permalink)
Neon Beach Join Date: Nov 30 2000 Location: Ontario Age: 61 Posts: 38,594 Rep Power: 107	Mouthbrat is correct. I just incorporated, as of Dec. 1st. Here in Ontario, another advantage is the drop in tax rates, and the owner who may have been taking a draw from the business can now go on payroll and that pay becomes an deductible expense.

12-24-2003, 09:39 AM	#7 (permalink)
sunkissedtan I'm Banned Join Date: Jul 9 2003 Location: Funky Town Posts: 354 Rep Power: 0	Thanks for the info. Yes it does help, I think I will go the LLC route for now. Small salon, small town. But I think I would like the salon separate from personal, ya' know.

12-27-2003, 10:48 AM	#8 (permalink)
globaltanning I'm Banned Join Date: May 7 2002 Location: Grayson, KY Age: 43 Posts: 301 Rep Power: 0	INC = Most protection + Most Taxes (Inc Income + Personal Income both) LLC = Some Protection + Taxed at Personal Income Partnership/soleP = No protection + Taxed at Personal Income LLC was the choice for me, it provides the best mixture of protection with liablities. Althought the INC does provide more PROTECTION, (THE LLC IS NOT FULLY PROTECTED, IT does have some downfalls that allow for some personal assets under certain circumstances to be accessed by debitors if the need) The INC also allows for double taxation. A new tax allowance for anyone over a certain gross amount allows the INC and both LLC to use up to 100K to purchase equipment for use of the company (dual use allowed personal/business). This 100K is taken off the company before the bottom line, so more gets to benefit the LLC/YOU. There is a new choice called an LLP and LLLP They stand for Limited Liability Partnership and Limitied Liability Limited Partnership. They pretty much have the same benefits as an LLC with a little less protection, but a little more pass thru on the REVENUE side. CONSULT YOUR ATTORNEY IS THE BOTTOM LINE! They dont get the big bucks for nothing!

12-30-2003, 03:39 AM	#9 (permalink)
soapking Waiting Confirmation Join Date: Mar 7 2003 Posts: 489 Rep Power: 0	Junebug..you need to find yourself a new lawyer...You should, and every business should. I admit, I am not a lawyer, but having researched the legalities, and talking to some of the most successful business people for advice, including SBA and SCORE..they all strongly suggested an LLC or the least, an S-corp..it gives an umbrella of protection.. I went LLC, because everyone that mentored me, suggested it as the best entity. Call another lawyer. or a CPA.

12-30-2003, 07:20 AM	#10 (permalink)
TanningEmporium Join Date: Jul 15 2003 Location: 213 Skyland Shp Ctr Posts: 2,613 Rep Power: 22	I am C-corp..which protects me and my home assets, if anyone ever had or tried to sue my business, none of my personal assets would be touched. When you go s-corp you personel assets are not as protected and yes with a s-corp both incomes are effected, not with a c-corp. Did it all myself and it was much cheaper than using a lawyer. I have taken several free classes at our local college and the business information you are looking for can be learned there or at your local library..

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