Forming an LLC

[SpaceBus]

I want to form an LLC this year with the intent on doing work with my tractor, forestry work, tree farming, grounds maintenance, home repairs/renovations, and milling my own lumber. Our property consists of 25 acres of Balsam forest so I was thinking of naming the LLC "Balsam Works LLC". Do you think this is too cheesy? Most folks around here go with a naming formula of: Last name + work done + LLC (required) or Area the business is located instead of last name. A friend of mine formed an LLC locally a few years ago, but he has a laundromat and plans on buying others. He has the LLC and uses a DBA for the laundromat and plans on buying others. Would I be better served by calling it "last name" + enterprises + LLC and then come up with a DBA for tractor/outdoor work and one for house repairs?

I'm not trying to get rich with this plan, but to supplement my medical/retirement pension from the Military. There are also some tax reasons for this year, but those are incidental and I planned on forming the LLC after I bought my tractor anyway. My immune system is also in the dump so there are many jobs I simply can't do.

 

[therealdbeau]

I recommend forming the LLC with a generic name like "last name + Enterprises" or "your initials + Enerprises" etc. and then use DBA. Reason being you never know what the future is going to bring, your business may change or you may expand into different areas etc. Or you may just decide you don't like the name later on.

 

[SpaceBus]

Rather by accident I found a thread elsewhere about a chap who is at this moment doing the same thing that I want to do, well close enough anyway. Does anyone know about forming two LLCs for asset protection? Some folks mentioned they worked for LLCs and knew some others that were actually two LLCs that were both S corps. One LLC owned the assets and leased them to another LLC that did the work. This sounds like a nightmare for paperwork, but supposedly this can prevent your assets from being taken in a lawsuit. This seems a bit implausible to me and like an urban legend.

Edit; google quickly revealed the truth on the matter. It seems like this is more related to debts and loans. It does protect the assets in the event of a lawsuit, but so does insurance, which seems like a much easier approach. Also managing debts and equity between two LLCs sounds way less enjoyable than the substantial amount of paperwork/recordkeeping that will come with starting and managing the LLC. My wife is a knife's edge from quitting her job and changing careers, so maybe now is the time. She has very much enjoyed remodeling our house and I finally got her to just ride the tractor, which she also enjoyed (who doesn't like operating tractors?).

 

[EatenByLimestone]

Why are you choosing LLC vs other forms of incorporation?

 

[SpaceBus]

Why are you choosing LLC vs other forms of incorporation?

Primarily for tax and liability purposes. Early this year I cashed out my retirement and purchased a lot of equipment we need for our property. My taxable income will be really high this year and forming the LLC will allow me to sell the equipment to the LLC. This will then be counted as a loss for the company offsetting my tax liability for this year. This will also protect me when using this equipment for work. My goal is to earn enough money over time with the LLC to pay myself back the money I cashed out for the equipment. Also I will be most protected in the event of an accident, lawsuit, etc if I get insurance for the company ( usually about $500/yr).

I am medically retired and drawing a pension so I don't need this venture to make a ton of money, even just another $1,000/month would be great. The tax law will also allow me to do jobs for free and I can count this as a charitable donation to offset my tax liability as well.

 

[SpaceBus]

Well, I submitted the LLC, licensing, and other associated documents this morning! I formed the LLC with my last name and my DBA will be Balsam Works

 

[therealdbeau]

Congrats! All that paperwork and crap can get a bit daunting but when you're all set up it feels good. Until you get the bill ($100/year in my state) lol.

Often times it is recommended that you file S-Corp classification beneath the LLC to avoid double taxation when paying yourself from the LLC. Reason I mention this is because that may make it not possible for you to sell your equipment to the LLC. I'm no expert, just some Joe Blow that has a business and went through some of this stuff. Just something to consider. I'd recommend getting a good CPA/Lawyer you can bounce questions off of.

 

[SpaceBus]

Congrats! All that paperwork and crap can get a bit daunting but when you're all set up it feels good. Until you get the bill ($100/year in my state) lol.

Often times it is recommended that you file S-Corp classification beneath the LLC to avoid double taxation when paying yourself from the LLC. Reason I mention this is because that may make it not possible for you to sell your equipment to the LLC. I'm no expert, just some Joe Blow that has a business and went through some of this stuff. Just something to consider. I'd recommend getting a good CPA/Lawyer you can bounce questions off of.

I actually got the idea to sell the equipment to the LLC from someone who started an S Corp here in town. I'll speak to a legal expert to be sure.