I do beekeeping as an S corp entity. I did all the paperwork at the state office in about 20 minutes. The girls in the office advised. Forty five dollars in Missouri.
The annual fee is forty five for paper mailed in but twenty bucks by internet filing.
My beekeeper CPA checked things over and said was correct later.
The government LDP program did not want to issue a check to my entity. They did after a week of stalling. I had only formed a few months before. Now its been over a decade.
It is important if a legal problem comes up that you have been an S corp or LLC for awhile. Its hard to run out an form after you are sued and not have a smart lawyer cause trouble in the courtroom!
I decided to try for fun a Turbo Tax for S corps at tax time (a couple years ago)and let my bookkeeper cpa check the Turbo tax completed form. She showed me why the form would raise a red flag with the IRS. Something to consider.
You really need to get the tax forms right with an LLC or S corp.I believe my cpa is worth the money I pay her. You turn on lights at many government agencys when you incorporate or form an LLC.
To sum things up the forms to start up are simple at hte secretary of states office but the IRS and other forms from the government are not.
An S corporation has a stricter set of rules outlining who can be a stockholder.
An S corporation passes-through at the same percentages as ownership, an LLC can have a different percentage pass-through than percentage ownership.
If you are sued personally, your stock might be and your pass-through income is at risk. It works like this, the person who gets judgement gets the vote and can vote a distribution of all of it (if they decide against just taking your stock).
You can set up an LLC so that if you are sued personally, the income of the business does not pass to a member but the liability does. This means that if someone get a judgement against you, you can have the controlling member (not you) hold all income (do not distribute) but the taxes will pass-through to the person holding the judgement (they pay taxes on money they don't get). It is an effective deterant. The trick to this is having a controlling member that you trust who usually ends up with a tiny bit and who isn't you.
Never use sole-proprietorship. Well, unless you really don't make very much money. You want to always avoid a schedule C. Use an S corporation or an LLC instead. Not for asset protection, but for tax accounting. If you are just a single owner (own 100% of either) then they appear the same except there is more work to keep a corporation legal and distinct. Less paperwork in an LLC. Always Always Always keep the money separate and the paperwork up to date.
I am not a tax accountant or tax lawyer. This is freebie advice and you really should go and check out your state's law.
You are concerned with taxes, liability exposure, and asset protection. There isn't one entity that is perfect at all of these.
ideee, after rereading, you are still wrong! (and the two posts you referred to) in the law, there is no such thing as 6 in one, half dozen in the other! seldom is there black or white either, mostly gray.
i'll defer to you guys on all things beekeeping though!
EDIT: I should have known better than to stick my nose in this discussion! i'm sticking to bees now...
[size="1"][ February 13, 2006, 11:46 AM: Message edited by: FordGuy ][/size]
Fordguy, don't take your ball and go home. We'll still play with you.
haha, I can't even dribble! (somehow I think i'll be the last one picked to be on the team...again!)
LLC or S Corp.Ford or Chevy...
FordGuy, cain't none of us dribble that thar football. It don't stop us from tryin though.