Daycare.com Forum
Daycare Center and Family Home Forum>LLC vs INC? or Doing Business As???
Sprouts 05:23 PM 01-21-2011
Has anyone here started an LLC before they opened their day care??
Confused between starting an LLC or a Corp or if its even necesarry at all??
I am getting my articles of organization ready now using the "LLC and Corporation Start up Guide"...and then plan on hiring a attorney afterwards (save some $).....but trying to avoid unnesesarry expenses when tax season comes around....hopefully anyone here or Tom... =) has had experience with this and can give some much appreciated advice!! =)
Confused between starting an LLC or a Corp or if its even necesarry at all??
I am getting my articles of organization ready now using the "LLC and Corporation Start up Guide"...and then plan on hiring a attorney afterwards (save some $).....but trying to avoid unnesesarry expenses when tax season comes around....hopefully anyone here or Tom... =) has had experience with this and can give some much appreciated advice!! =)
TomCopeland 06:52 PM 01-21-2011
The decision of whether or not to incorporate your business is a complex one. I strongly recommend that you consult with an attorney and a tax professional who both understand family child care. I've written about this at length in my book Family Child Care Legal & Insurance Guide.
In general, I'm opposed to providers incorporating. The primary reason for doing so is to reduce personal liability. However, this is not simple. I believe that purchasing a lot of business liability insurance is the best way to go. Although it may be true that you could get some more liability protection by incorporating, it comes with a price. If you set up a C or S corporation you will lose all home deductions (property tax, mortgage interest, utilities, house insurance, house repairs, home depreciation) for your business. Also, there are additional record keeping requirements as a corporation and additional costs (filing fees, annual fees, tax preparation fees).
There's a lot more to consider. I urge you to seek professional help before you take this step.
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In general, I'm opposed to providers incorporating. The primary reason for doing so is to reduce personal liability. However, this is not simple. I believe that purchasing a lot of business liability insurance is the best way to go. Although it may be true that you could get some more liability protection by incorporating, it comes with a price. If you set up a C or S corporation you will lose all home deductions (property tax, mortgage interest, utilities, house insurance, house repairs, home depreciation) for your business. Also, there are additional record keeping requirements as a corporation and additional costs (filing fees, annual fees, tax preparation fees).
There's a lot more to consider. I urge you to seek professional help before you take this step.
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Sprouts 05:40 PM 01-22-2011
Thank you for your response! I will go and re-check the book now.