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Business lawyer
Business lawyer, Attorney
Category: Business Law
Satisfied Customers: 418
Experience:  J.D., Magna Cum Laude, University of Alabama. Judicial Clerk for Supreme Court of Alabama 2004-2005
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I am in the process of purchasing a (bob tail) Truck to ...

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I am in the process of purchasing a (bob tail) Truck to haul large trailers, (Truck driving). I am (going in) with a partner and we are splitting everything 50/50, income, expenses, etc. We will become a (company) for tax purposes, etc. It will be a small business to at least start out. When applying for financing, the bank asked if I will be incorporated, sole proprietor, and I had no idea what to answer. With a business this small, starting out, what steps should I take to do the best things available to me?
Submitted: 8 years ago.
Category: Business Law
Expert:  Business lawyer replied 8 years ago.
You need to incorporate for several reasons, such as tax liability and protection from lawsuits. I would recommend, on the basis of the information you have given, that you incorporate as an LLC. This provides flow through taxation (meaning that your income will not be taxed twice, which happens in an actual corporation) and legal liability protection. You can find the necessary forms on your state's secretary of state's website. You will have to fill them out, pay a fee and then file them with the secretary of state.

LLC stands for "Limited Liability Company." I can assure you that the bank will feel much more comfortable when you tell them this.
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