Starting a Mobile Computer Repair Business

[springfield]

My question involves business law in the state of: Kentucky.

I've done a lot of reading here and there over a long period of time and I have a lot of mixed ideas. I'll try to explain my thoughts as best I can, and apologize in advance for my terrible writing style.

I would like to start a company, I would first do mobile computer repair, but I would also like the company to have the ability to branch and do other currently unknown things years down the road.

My research has told me that I should establish business credit, because it is a lot like personal credit. I assume that if I establish business credit now, if I started doing something different than fix computers five years down the road, I'll have enough business credit to buy supplies. I've been reading creditboards.com, these guys seem very knowledgeable of all things credit. While I have yet to post there, I will refer to them when I receive guidance from you all.

So with all that said, my first priority is to have a future-proof business structure that allows me to move into a different field and carry a good credit record with it.

My second priority is to shield myself from liability, not that I'm irresponsible, but you know what I mean. Liability insurance will come when I get the funds.

Considering those two priorities, number two especially, I can't form a sole proprietorship. (Most companies providing credit won't accept a sole proprietorship either.)

So the best I can figure is that I form "Generic Holdings, LLC" and establish credit with it, then I also have an assumed name filed so that I have "Formal Name Computer Repair d/b/a Generic Holdings, LLC"

I have a full time job, and as stated before, I would like to start a mobile computer repair company to help supplement my income. This would just be my business, I will not hire anyone. So that leads to my question list.


What kind of company should I form?: I'm thinking an LLC because that's what my research has pointed to.

Can I form the holdings company structure as described earlier?: ???

Will my taxes be complicated?: I can use TurboTax, but anything more complicated might cause frustration.

Can I draw money out of the business account as I please?: I would draw it as a salary, not to try to deduct my every day personal purchases.

My company has a plant shutdown period every year, if I don't have enough savings will I have to stop my business activities to draw unemployment benefits?: ??? In the past, they always had a spot on the claim site to fill in any income received to deduct from your check.

I won't be marking up prices on parts, will I have to pay sales tax?

Will I have to pay income tax on the parts I buy and have to bill for?

Parts will come from local sources like Best Buy, and also from online sources that don't charge a sales tax to customers in KY.

That's all that I can think to write now, and thanks for taking the time to help me.

G

[KeyWestDan]

Only going to address one issue. You will not get any significant business credit with a LLC. A LLC is only a partnership with third party liability protection, not a real corporation. Any LLC credit you get will be guaranteed by you or another partner.

It is not a real corporation which is the only way a corporate credit lline will be developed.

A LLC is fine for a small local business. If you have plains beyond that or want to involve additional people and perhaps give them a piece of the business, you need a real corporation.

When partners in an LLC fall out, it is the beginning of a real nightmare, especially if there is not a properly written management agreement.

[Mr. Knowitall]

You need to have a long sit-down session with an accountant.

From what you're saying, in terms of trying to create an entity entirely separate from yourself, you would want to start an S or C Corporation. If you treat the company coffers like a private piggy bank, it becomes more likely that a court will regard the distinction between you and your business as a sham.

[Bubba Jimmy]

A single member LLC is treated by default as a disregarded entity that would file its tax return on Schedule C of the member's personal income tax return. That's the same as a sole proprietorship. It's taxed no differently than if you did business under your own name without forming a separate entity.

If the single member LLC files form 8832 and elects to be treated as a coproration for tax purposes it can then also file form 2553 to elect treatment as an S corporation. It then is treated fully as an S corp for tax purposes.

Whether an LLC provides sufficient limited liability in your state compared to a corporation would be a question for your attorney.