What Business Structure do you run?
- Thread starter K
- Start date
I have two LLC's, one C-Corp, and three DBA's.
One LLC is presently dormant, I keep it filed away for future use (it's aged). The other LLC is currently my primary (T J Tutor LLC) for business and run the bulk of business activities through it as well as the bulk of revenues. I went with an LLC because the structure is taxed like a sole proprietorship. Profits or losses from the business are are not required to be taxed directly but can be taxed through the single member's personal federal tax return. Also, LLCs share many of the same qualities as an S-Corp or C-Corp while enjoying more flexibility and requiring less paperwork.
My C-Corp (T J Tutor & Associates) is aged, over 34 years old. I've used it as my shell on and off for all of that time. I've kept it on the books all of these years for whenever I achieve multiple revenue streams and the totals begin to exceed $1MM in annual revenue. It's usually at that point that I find myself with enough expense and liability that moving everything under the coverage of the shell then becomes more appropriate.
The DBA's are generally used for the beginning, or startup stage, of an idea or new venture and stays there until viability of the model is determined to be worth putting significant time and money into it.
One LLC is presently dormant, I keep it filed away for future use (it's aged). The other LLC is currently my primary (T J Tutor LLC) for business and run the bulk of business activities through it as well as the bulk of revenues. I went with an LLC because the structure is taxed like a sole proprietorship. Profits or losses from the business are are not required to be taxed directly but can be taxed through the single member's personal federal tax return. Also, LLCs share many of the same qualities as an S-Corp or C-Corp while enjoying more flexibility and requiring less paperwork.
My C-Corp (T J Tutor & Associates) is aged, over 34 years old. I've used it as my shell on and off for all of that time. I've kept it on the books all of these years for whenever I achieve multiple revenue streams and the totals begin to exceed $1MM in annual revenue. It's usually at that point that I find myself with enough expense and liability that moving everything under the coverage of the shell then becomes more appropriate.
The DBA's are generally used for the beginning, or startup stage, of an idea or new venture and stays there until viability of the model is determined to be worth putting significant time and money into it.
Wish I could transplant some of your knowledge directly into my brain with the result being total and instant comprehension.
Our tax laws differ from yours, probably the corporate details, as well. We don't have to register for a business license until/unless we generate $30,000+. Then we have to license up and charge, collect and remit sales tax.
Re your LLCs...I understand that having multiples allows you to juggle revenue placement to keep your tax base down. Not sure how you do that in the paperwork but no matter. What I am curious about, is if you initially did this (get more than one) for keeping your entities as organized, separate divisions?
I had to look up DBA, had no clue what that was, we don't have it in Canada. We either use our full legal name or register for a license. After reading a little about DBA, I wondered why you would need it. I read that an LLC allows you to use multiple names under the one LLC umbrella. Maybe I misunderstood?
That's how I do it! I have a USB receptacle behind my ear and I just plugin to the laptop
Okay, so I have a Nevada Corporation called T J & Associates. This is an aged C-Corp which is dormant at the moment. It has been used as a shell corporation since 1982. It has been an umbrella corp for dozens of companies I've had since then. Initially it held my Nevada corporations Automated Data Supply, JDI International, Monique LLC, and a handful of other corps. I sold the corporations under it at intervals between 1988 and 1996.
When I moved back to NY in 1996, I kept the original corp, T J & Associates for two reasons.
Reason one, keeping shells is like stockpiling domains, you will likely have future use for them. As well, as they age, and when they have good histories, they become more valuable and demonstrate a history of success. Reason two, when I start a new corporation and place it under my 1982 corporate shell as an asset, it lends credibility to the new corporation.
Understand that when a business is it's own entity (a corp) and under a shell, the business under the shell is responsible for itself and its liabilities and any of its liabilities are generally not shared with the shell corporation. The shell is simply a stockpiler of assets. The corporate entities I place under a shell corp are seen simply as assets of the shell. In short, the values are shared between the shell and the corps under it, but the liabilities are not (there can be some very unlikely circumstances where this may not hold. Think tobacco companies, the Bernie Madoffs of the world, etc.).
So, I use DBA's for new ventures. It offers a liability separation between me and the business. Kind of a buffer. Plus, it allows me to get a business license for a new business if needed and without having to incorporate. It also, and very importantly, allows me to open a bank account in the fledgling business without corporate filings. A DBA runs about $25 for each county (in NY) in which one may have an office. So, if you have offices in only one county, you only need file the DBA in that county and still be able to do business in other counties and states.
In short, it reduces liabilities, enables one to open a bank account in the business name without a license or corporate filing, and enables one to operate a new business for an extended period of time to determine its viability and sustainability without the expense of incorporation.
Hope this is at least as clear as mud for you
!Haha, like Johnny Mnemonic!
If it's dormant, is it a matter of simply doing nothing with it, or do you file papers of some kind. Also, is a shell corp registered as such, or it's just a corp and your companies/sub-corps are registered as divisions?
Really? It's like a trial LLC then? You are not personally liable for that DBA (not counting any exceptional circumstances). That sounds terrific, wish we had that!
Sorry, TJ. I get curious about things. I really appreciate your detailed explanations, thank-you!
iamthecoolnerd
Get your fix Ninja!
Still solo
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