Discussion in 'General Discussion' started by samhouston, Jan 18, 2012.
What is you opinion on opening a gunsmith business in Ga as an llc rather than a sole properiter ?
Either a LLC or Incorporate ( Sub S ), both offer liability protection. When I went to start my second business here in Ga, I asked my attorney about going LLc and his told me it would be better for my one man operation to Incorporate ( w/sub S) as it would offer better benifits ( tax write offs ) and protection ( being sue'd ) however I've spoken to several other people who went LLc and said it offers the same??? Some kind of corporate liability protection is what you as a gunsmith should be concerned with having, being we live in a sue happy society.
I agree with Plinked; you should open it as some kind of corporation. Even if it's just something from Legal Zoom or US Legal Forms, it will offer you significant protection. I've personally used US Legal Forms, and I would recommend them.
Just remember that you'll then have to file a corporate tax return each year as well. Failing to file the return can land you in prison, possibly even if you paid the taxes.
It is my understanding that LLC does offer liability. That if someone buys a gun from you and ends up shooting themselves or someone else by accident you cant be held responsible because you cant take the time nor are you obligated to give them safety instructions on the gun.
It also lets you run the business as a corporation with tax breaks and you dont have to have any other share holders also not having to have a yearly share holder meeting.
I could be way off track on all of this. DoubleD I believe has his shop registered as an LLC. He may be along to tell you the real reason.
My small operation is a sole propietor. I dont do any smith work. It would pay to have legal advice for your situation. I have a corporation for the real estate I used to do and I also had an LLC that I held rental property in, but I cant tell you what will be best for your business. Since you are offering repair to the public, it would probably be best to be protected.
I've got a BSBA major Ind. Mgt, minor Econ and an MBA with a dual major in Mgt and Finance, I specialized a lot in contracts in my last job.....I'm basically semi-retired now but can give you a few tips.
First there really is little if any difference between what state you are in on the basics but do be careful before jumping into anything.
I would avoid sole proprieter if possible and almost never a partnership! Both due to liabilities, your partner can screw up something and you can be jointly liable!
Just a few suggestions, I would probably go the incorporated route, not a bad idea to talk to someone in your state that has gone through the process:
1. You can buy relatively inexpensive Business software and do an LLC or Sub. S corporation but I'd want someone to guide me through the process. The main reason to do an LLC or Sub. S is handling liabiliities and taxes.
2. You can do the kind you see on TV, a little more expensive but they can work fine.
3. Go to a lawyer, most expensive, least hassle and fear you might screw something up.
Edit add, make sure you have the necessary insurance for your line of work!
You can form an LLC that is structured for tax purposes as an S-Corp. That way you get the best of both worlds. I have set up 3 companies like this. It is easy to do and a lawyer can get you set up for about $500. Well worth it!
Just had supper and did a little more thinking, (without your personal details) you can start small, sole owner and then move up.
Over 15 years ago I set up a tax business that way turned out great, H&R Block wants to buy us out every year.
Also think about a company name, sounds easy but if you go to sell later the "goodwill" in your name can be a nice asset!
You don't want to be a sole owner for liability reasons. Set up as LLC and buy all the shares - you still are sole owner, but you have protection from the LLC.
In most all cases that is true unless you want to start from scratch a small "garage business" then expand. I'd always have have a plan to go LLC, soon afterward if it's viable at all.
And $500 for a lawyer to set it up isn't bad at all, in fact it's pretty good.
My home and business legal software I get a cut rate price on is about $40.
Thanks for the responses, this will be the the second business I have started .The first was a landscape co and did well untill the economic state we are in now was crippled when building stopped. It looks like I will be going with the LLC.
Even starting small from scratch in your garage - you should incorporate to protect the rest of your house. It only takes one lawsuit to wipe out everything you have and will have for a long time to come!
LLC protects your personal assets from business lawsuits. If you want to get some real protection form 2 LLCs. Run your day to day operations under one LLC and have EVERY asset owned by the other. That way if there ever is a lawsuit the LLC has no assets other than liquid cash in the bank account. All your equipment will be owned by the LLC that has nothing to do with the transaction with the sueing party. Their are some intricacies to it, but it is workable. You just have to make sure ALL the financial aspects of both LLCs and personal are kept separate. If a savvy lawyer finds personal bills paid from the business account they can link your personal assets to the lawsuit.
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