Mark Mondloch on tue 1 sep 98
Hi all,
After years of telling me that I've 'got it made', my hubby's decided to
hang-up his mailman bag and come work with me. Now we need to make some
business decisions. It's been suggested that we should become a
s-corporation. I'm wondering what business structure other
spouse-partners use and why. Thanks In Advance for ANY tips for us in
this transition.
Sylvia
--
Mark & Sylvia Mondloch
Silver Creek Pottery & Forge
W6725 Hwy 144
Random Lake, WI 53075
mondfam@execpc.com
http://www.execpc.com/~mondfam
Tom Wirt on wed 2 sep 98
>Hi all,
>After years of telling me that I've 'got it made', my hubby's decided to
>hang-up his mailman bag and come work with me. Now we need to make some
>business decisions. It's been suggested that we should become a
>s-corporation. I'm wondering what business structure other
>spouse-partners use and why. Thanks In Advance for ANY tips for us in
>this transition.
>Sylvia
Hi Sylvia,
Right off top (I'm not a lawyer or a tax person, but I've been in and run
businesses for 35 years, including S-corps.
The only real reason for you to form and subchapter-S Corporation is to
limit liability to the corporation. That, and if you're going to have
others invest in your business and want to avoid double taxation on any
profits. If it's just you and your spouse, there's no need to go through
the cost (although you can do it yourself) and trouble of setting up a
corporation.
Better to set up a sole proprietorship. If you must, you can do a
partnership, but then you need a partnership agreement in writing. Talk to
a tax person if you should set up a sole prop, and have your spouse as an
employee. There are some tax advantages to this, and it can be done legally
(tax-wise) through a second entity such as BizPlan in Madison WI.
(1-800-422-4661, www.tasconline.com).
If you go corporation, you must hold annual meetings, must keep a corporate
book, must file corporate taxes to maintain the corporation. There is
absolutely no reason for this complexity except as noted above.
Make pots not corporate notes.
Tom Wirt
Jan Cartron on wed 2 sep 98
One possibility is a Limited Liability Company. As I understand it the
advantage to that is that if for some reason the company were (God forbid) the
target of a lawsuit or declared bankruptcy the individual members or partners
would not be held responsible for company debts. It's a fairly new type of
entity, but my boss in the non-art world, who is an attorney and a CPA,
recommends it.
Jan
John Johnson on thu 3 sep 98
here in WV the pretty much ideal structure is a limited liability company or
LLC. your risk is limited by initial investment plus the company value at the
time of claim. (ie. lawsuit). in other words, even though over the years one
takes out $$$, those $$$ aren't available to creditors. also keeps personal
assets from being vulnerable to creditors too. i'm sure a tax or corporate
attorney can give a great more detail, but in a nutshell, its the way to go.
attorneys are very good about demonstrating how the corporate veil has been
pierced, which makes personal assets available to the creditors. such as uning
your personal credit standing to say, sign up for an additional phone line for
business use. EVEN WHEN THE BUSINESS PHONE IS AT A DIFFERENT LOCATION FROM
RESIDENCE! same with all utilities & all the rest.
but talk to an attorney for specifics in your state. i don't advocate anyone
not taking responsibility for the actions and hiding behind any necessary
business structure; however, i certainly want to protect my assets from the
salivating jaws of a hungry attorney interested in winning an un-warrented
lawsuit!
John in WV
David Cowdrill on thu 3 sep 98
We just addressed the same question and discussed with a CPA and attorney.
My main concern was protecting home from liability. Recommendation of both
was s-corporation. LLC considered untested in case law. Attorney handles
all administration; reasonable cost. So we chose s-corp.
....
> It's been suggested that we should become a
>s-corporation. I'm wondering what business structure other
>spouse-partners use and why.
....
David Cowdrill in Great Falls, VA (703) 430-2692
John H. Rodgers on fri 4 sep 98
-- [ From: John H. Rodgers * EMC.Ver #2.5.02 ] --
Corporate structure also helps in the event of a divorce!!
John Rodgers
-------- REPLY, Original message follows --------
Date: Thursday, 03-Sep-98 09:17 AM
From: David Cowdrill \ Internet: (david_c@ami.net)
To: Multiple recipients of list CLAYART \ Internet: (clayart@lsv.uky.
edu)
Subject: Re: s-corps for spouse-partners
----------------------------Original message----------------------------
We just addressed the same question and discussed with a CPA and attorney.
My main concern was protecting home from liability. Recommendation of both
was s-corporation. LLC considered untested in case law. Attorney handles
all administration; reasonable cost. So we chose s-corp.
....
> It's been suggested that we should become a
>s-corporation. I'm wondering what business structure other
>spouse-partners use and why.
....
David Cowdrill in Great Falls, VA (703) 430-2692
-------- REPLY, End of original message --------
--
John Rodgers
'85 GL Vanagon Driver
Clayartist/Moldmaker
"God created His best work from clay, shall I strive to do less?"jr
Jane Woodside on fri 4 sep 98
Although choice of entity is very dependent on state law and in California
your state tax cost may be different for a LLC than for an scorp, all things
being equal, I would choose an LLC for the following reasons: 1) there is less
likelihood of losing your limited liabilty because of not following corporate
formalities: an LLC has fewer formalities than an scorp; and 2) there are
fewer rules to follow with an LLC. One caveat--some attorneys may be
relatively unfamiliar with this form and charge more to start one up. Shop
around. Jane Woodside
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