I own a small children's store as a sole proprietorship. My husband & I together own a 2 store fast food franchise. I need advice on what the rules are for changing both businesses to an LLC? I am looking all over the Internet for information. I want to make sure the tax liability structure is in our best interest while protecting our personal assets.
I want to do this immediately. What is a fair price to pay someone to do this? Does a lawyer have to do it? Thanks for any help.

Check out www.mycorporation.com. I would advise registering in Delaware as their state fees are the lowest besides Las Vegas; very common business practice. Probably want to set up 2 separate corporations, one for the children's store and the other for the franchises.

Who handles your taxes now? This will change your entire reporting structure, so you may need to hire an accountant if neither you or your husband are familiar with corporate tax filing.

If you were in the state where I'm located, Massachusetts, you'd follow this:

$35/quarter hour isn't too bad, but if you're getting poor service you should go to someone else no matter what you're paying.


Joshua,
If someone incorporates in Delaware, don't they still need to register as a foreign corp in their home state? In many cases, wouldn't that increase expenses rather than reducing them, particularly for small businesses? I am under the impression that registering in Delaware (or more recently, Nevada) is something that larger corporations that have presense in many states are doing, while a small corporation only doing business in one state may as well register just at home.

Yes, they do. But the service can file that paperwork for you. Otherwise, it's easily found on your state's website or through the secretary of state's office. No, quite the contrary. Many small businesses are registering in less expensive states due to the reduction in seed money required to start up.

Regina,

No, you do not need an attorney. There are several services like the link that I gave you, who will set you up for a few hundred dollars. Many times you can call them and get a reduced fee for multiple filings. Also, if you are unhappy with your CPA, contact the AICPA (www.aicpa.org) or your local society of CPA's (http://www.scacpa.org/index2.cfm) for a list of registered CPA's in your area. Normally I would offer my services for a reduced cost, but I am not yet a CPA so you'd still be in the same boat. $140/hr is high for a CPA not performing an audit, you can definitely find less expensive and better service.

What are the main differences between being a sole proprietor and an LLC? I have read a lot about it but I need simple english. It seems that the tax is the same unless you have several people involved and depending on the type of business. Why become an LLC if it is treated the same for taxes? If someone could tell me that in laymans terms I would be grateful. I have already located the appropriate forms in SC in the Sec of State office. Thank you.

I see this post is very old, so you may have found out your answer by now. I don't know a whole lot about this, but I'm currently researching this stuff myself. I'm pertty sure that the difference of an LLC and a sole prorietorship, is that an LLC offers the protection of your personal assests. Which a sole proprietor does not. An LLC also bypasses the "double tax," in that the profit is only taxed when it's passed down to the shareholders.

Basically, an LLC has the tax benifits of an S-corp, and none of the investor limitations.