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  1. #1
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    Default LLC. v Corporation, and Completing Taxes

    Starting an LLC. in Maryland seems easy enough and it looks like I can do the taxes using a tax application that includes LLC.'s.

    However what I'm looking for is a separate entity that could own things with an EIN number that arent mine. An example would be a car or a delivery van.

    So do I need a Corp or can an LLC get it done, and if I need a Corp. are there any accounting packages that deal with that. I know eventually I will need an accountant, but if I can follow the application it might cost less for that accountant.

  2. #2
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    Default Re: LLC. v Corporation, and Completing Taxes

    What's your question?

  3. #3
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    Default Re: LLC. v Corporation, and Completing Taxes

    Fair enough! I'm looking to put/buy assets like a car/van and have them titled in the business name. I believe a corp can handle this, but it may be overkill and end up costing me in tax filing costs. Currently I am doing business with only a DBA so I believe I'm liable for a company car. I did get the appropriate insurance, but I now need to get "content" insurance and am told the vehicles must be in a business name like a corporate name. One could argue the point of keeping it the same(in my name), but the underwriters(and more importantly the perspective customers) are giving me a problem so I have to do something that would allow me to get an account with another business. Please, if we can forget about getting a policy in my name, that would be helpful..I've been down that road before.

    I realize I would have to be a cosigner or buy outright, but witch way can my concerns be addressed and cost the least in terms of filing required forms and accounting costs?

  4. #4
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    Default Re: LLC. v Corporation, and Completing Taxes

    I doubt that you will have an easier time with tax returns or even with an application to become an LLC versus a corporation. However if the business is run by you and only you, you may find it easier to manage an LLC or, if your state allows it, single member LLC. If liability is a serious issue, though, despite the protections an LLC offers I would probably choose an S Corporation.

  5. #5
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    Default Re: LLC. v Corporation, and Completing Taxes

    Quote Quoting Mr. Knowitall
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    I doubt that you will have an easier time with tax returns or even with an application to become an LLC versus a corporation. However if the business is run by you and only you, you may find it easier to manage an LLC or, if your state allows it, single member LLC. If liability is a serious issue, though, despite the protections an LLC offers I would probably choose an S Corporation.
    Thanks in Maryland you can have a one owner LLC and the filing costs are the same as with a S corporation. I would rather do an S Corp, but IM thinking there are many more requirements than an LLC. It looks like all thats needed(LLC) is to file a yearly "property" form and treat my income with a 1099.

    My real issue is in dealing with one prospective new customer who requires content insurance and a business name. This then brings me to a new problem in that insurance companies want to see a business identity, but don't seem to know much about LLC's and their Maryland issues. State Farm doesn't do this type of insurance so I'm needing to make a choice and(if LLC) defend it to the underwriters.

  6. #6
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    Default Re: LLC. v Corporation, and Completing Taxes

    An insurance agent who is not familiar with LLCs is not very informed. There are many large companies organized as LLCs. For example, National Financial LLC is a Fidelity company that handles brokerage services and they are huge. LLCs have been around for a number of years.

    There are other requirements for a corporation, however. For example, if you do not maintain good corporate records including annual shareholder meeting minutes, records of the actions of the board (even if that is just you) and so forth, a clever lawyer would easily break through the corporate veil, showing that it was a sham corporation that didn't do the things required of a corporateion. So, unless you keep up with doing those things, a corporation could end up doing you more harm that good.

    One perceived benefit of being a corporation is that you can pay yourself a salary and then take any additional profits out without paying employment taxes. However, the same thing can be accomplished using the IRS "check the box" rules that allow an LLC to elect to be treated as an association taxed as a corporation. So a company can have the simplicity of administration of an LLC and the tax benefits of an S corporation.

  7. #7
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    Default Re: LLC. v Corporation, and Completing Taxes

    What timing, IM filing for an LLC. tomorrow and it's EIN ASAP!

    Thanks

  8. #8
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    Default Re: LLC. v Corporation, and Completing Taxes

    You can file your SS-4 to request an EIN by going to http://www.irs.gov/businesses/small/...102767,00.html

    It's nice because you get the number right then, not weeks later by mail.

  9. #9
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    Jun 2006
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    Default Re: LLC. v Corporation, and Completing Taxes

    Thanks again, now I wonder how long an LLC. takes in Maryland. I'm told the line on Preston street is over an hour. There is a rumor that if you do it in person the clerk be able to speed it up a bit.

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