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MShore Law, Attorney
Category: Business Law
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Experience:  Drafted Negotiated and/or Reviewed Thousands of Commercial Agreements
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I want to start a small business, which i expect to generate

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I want to start a small business, which i expect to generate $50k - $100k income annually. Should I set up a corportation or LLC? Or neither?
Submitted: 1 year ago.
Category: Business Law
Expert:  Richard replied 1 year ago.
Welcome! My goal is to do my very best to understand your situation and to provide a full and complete answer for you.


Good afternoon. Can you tell me what type of business this is going to be? Thanks.
Customer: replied 1 year ago.

I will be a Personal Athletics coach (Track and Road racing). Clients will pay me a percentage of their earnings. There will be some likely deductable expenses (travel, vehicle, equipment). I believe the tax rate for up to $75k is approximately 18%, which would be quite a bit lower than my personal rate. This is why I am considering forming a corporation. Just don't know whether regular corp. or L.L.C.

Expert:  Richard replied 1 year ago.
I'm going to opt out so another expert can answer this for you more expeditiously. Please do not respond to this post as it will only delay that process. Take care.
Expert:  MShore Law replied 1 year ago.
Thank you for the post, I am happy to assist you by answering your questions. Will this be a single member business (i.e. one owner)?
Customer: replied 1 year ago.

I envisioned two owners: myself and girlfriend/partner. I woudl like to share all profits.

Expert:  MShore Law replied 1 year ago.
Thank you, XXXXX XXXXX want the profits to be attributed to both of you as personal income, you should elect a separate structure for the business. Businesses, in their infancy and when not seeking investor financing nor are yet profitable will normally elect an LLC structure due to its ease of establishing and maintenance (e.g. no meeting minutes required, or corporate officer positions/designations needed).However, once profitable many businesses elect to transition to a corporate structure , this is due to the tax savings.Here is a great breakdown of the benefits of the respective structures: http://www.incnow.com/tax.shtml#avoiding_the_personal_service_corporation_classification


In any event, from your description, an S-class designation may be your best tax savings vehicle.
Please let me know if you have any follow up questions.
MShore Law, Attorney
Category: Business Law
Satisfied Customers: 25285
Experience: Drafted Negotiated and/or Reviewed Thousands of Commercial Agreements
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