Is it worth forming an LLC?

Is it worth forming an LLC?

This is a discussion on Is it worth forming an LLC? within the FFL Dealer Discussion forums, part of the Related Topics category; Im in the process of applying for a Type 1 FFL. Is it worth forming an LLC? Or, is it fine to just go the ...

Page 1 of 2 12 LastLast
Results 1 to 15 of 22
Like Tree24Likes

Thread: Is it worth forming an LLC?

  1. #1
    Member Array john.shewchuk's Avatar
    Join Date
    Aug 2012
    Location
    TX
    Posts
    129

    Is it worth forming an LLC?

    Im in the process of applying for a Type 1 FFL. Is it worth forming an LLC? Or, is it fine to just go the Sole Proprietor route?

    I'm thinking that the sole proprietor route is going to be easier as all taxable income would be considered personal and I wouldn't have to worry about keeping an LLC in good standing with the state of Texas. On the other hand, it may well be worth forming an LLC to protect personal assets should I ever get sued.

    What are your thought and what did y'all do? Thanks for your input.
    -John


  2. #2
    VIP Member Array high pockets's Avatar
    Join Date
    Jun 2011
    Location
    Georgia for now
    Posts
    4,630
    Like you said, a sole proprietership exposes ALL your assets, except your home and your vehicle. An LLC allows you to confine liability to the assets of the LLC. In many cases this may not be an issue, but in anything firearms related, you really need to protect your family as much as possible. With people suing with eventhe slightest possibility of collecting, can you really afford to lose your holdings even if you are found not at fault?

    BTW - IANAL and I did NOT stay at a Holiday Inn last night.
    Rock and Glock likes this.
    "If you make something idiot proof, someone will make a better idiot."

    - Anon

  3. #3
    Sponsor
    Array luvmy40's Avatar
    Join Date
    Mar 2007
    Location
    Youngstown, OH
    Posts
    1,702
    I don't know if things are different in TX from OH as far as this goes, but...
    I run my LLC as a flow through. The company never shows a profit or pays taxes. There are still tax forms to be filed for the LLC but it's not really that big of a pain. The personal liability security is worth the cost in my mind.
    T*A*N*S*T*A*A*F*L
    The best things in life are not free.
    They are paid for with the blood of brave men and women!
    M&P Forum
    Ohioans For Concealed Carry
    Holsters

  4. #4
    Member Array troutkiller's Avatar
    Join Date
    Oct 2011
    Location
    Ohio
    Posts
    175
    LLC's offer nominal asset protection. In my business (not gun-related), I have a Nevada LLC as a holding company, and a Ohio LLC as an operating company. It's a stronger set up than one LLC. I'd consult an attorney, briefly if nothing else (say 1/2 hour), but an LLC is not a bad idea.
    "Go to Heaven for the climate, Hell for the company." ~ Mark Twain

  5. #5
    Distinguished Member Array Diddle's Avatar
    Join Date
    Oct 2008
    Location
    Central Kentucky
    Posts
    1,466
    FWIT, I am a dealer operating as a sole proprietorship. I asked my CPA who is heavy into firearms and competitive shooting as to whether I should form an LLC. His reply was NO. Since I had no employees it is my butt that is in the sling. The LLC would only benefit me if I had employees and an employee did something stupid. In that case YES, it would be a good idea. However there is a multitude or scenarios to consider and be aware of. As above, seek the advice of an attorney. Especially one who deals with business law and not compensation suits.
    Diddle
    Indusrtrial Machine Tool Technician - Certified Refrigeration Technician - CET
    NRA Life Member

  6. #6
    Moderator
    Array Rock and Glock's Avatar
    Join Date
    Nov 2005
    Location
    Colorado at 14,650'
    Posts
    12,541
    Just remember you need to respect the LLC's separate legal existence and be real careful about your P&Q's.
    RickyD likes this.

  7. #7
    Member Array cdynaco's Avatar
    Join Date
    Apr 2013
    Location
    Southern Oregon Mountains
    Posts
    57
    I have had both a Partnership LLC (1065/K-1's) and a Sole Proprietor LLC (Sch C). The extra tax forms aren't a big deal. However, I've always wondered how protected my personal assets really were. Because it seems these days attorney's go after both the Entity and the Principals. Thankfully I never had to find out.
    But are your personal assets really protected by an LLC or Sub S Corp?
    Charliehorse .........................>>> I support the NRA!

    Gun Ownership is NOT a Gun Crime!

  8. #8
    VIP Member Array varob's Avatar
    Join Date
    Jun 2009
    Location
    Virginia
    Posts
    4,451
    Also, look into incorporating yourself.
    Don't believe what you hear and only half of what you see!
    -Tony Soprano

  9. #9
    VIP Member Array OutWestSystems's Avatar
    Join Date
    Apr 2013
    Location
    Colorado Springs, CO
    Posts
    2,171
    The reason that most people that have an LLC or a Corp end up getting sued for their personal assets is because they don't truly separate the two entities. If you for an LLC or a CORP you need to remember there is now a new being. You must treat that being completely separate from you. So you can't just take money from it to pay your phone bill or put gas in the car. If you do those things if anything ever happens the lawyers will be able to claim that you were not really operating as an LLC or CORP and come after you personally.

  10. #10
    Member Array cdynaco's Avatar
    Join Date
    Apr 2013
    Location
    Southern Oregon Mountains
    Posts
    57
    Quote Originally Posted by OutWestSystems View Post
    The reason that most people that have an LLC or a Corp end up getting sued for their personal assets is because they don't truly separate the two entities. If you for an LLC or a CORP you need to remember there is now a new being. You must treat that being completely separate from you. So you can't just take money from it to pay your phone bill or put gas in the car. If you do those things if anything ever happens the lawyers will be able to claim that you were not really operating as an LLC or CORP and come after you personally.
    Right. Separate checking accounts. Pay yourself a draw out of the LLC, then pay your phone bill out of your personal account. Keep good records, easy to do.
    However, wouldn't an attorney sue to hold both the LLC, as well as the individual doing the actual work, as liable? Dunno...
    Rock and Glock likes this.
    Charliehorse .........................>>> I support the NRA!

    Gun Ownership is NOT a Gun Crime!

  11. #11
    Distinguished Member Array bigmacque's Avatar
    Join Date
    Jun 2010
    Location
    Florida
    Posts
    1,786
    Diddle I have to be honest here, I don't think your CPA gave you good advice there at all.

    I'd do the LLC, will definitely be more paperwork but affords many more protections than just personal assets. I'd also consider having a competent CPA file the taxes for you; one more name on the return, even though he shares no liability, will still make for a better presentation to the IRS.
    Rock and Glock likes this.
    I'm in favor of gun control -- I think every citizen should have control of a gun.
    1 Thess. 5:16-18

  12. #12
    VIP Member Array OutWestSystems's Avatar
    Join Date
    Apr 2013
    Location
    Colorado Springs, CO
    Posts
    2,171
    Quote Originally Posted by cdynaco View Post
    Right. Separate checking accounts. Pay yourself a draw out of the LLC, then pay your phone bill out of your personal account. Keep good records, easy to do.
    However, wouldn't an attorney sue to hold both the LLC, as well as the individual doing the actual work, as liable? Dunno...
    Actually it depends. In many cases unless it is gross negligence or fraud, you are stuck suing the company. Remember, the company in many ways shields your employees also, now the problem with that is off course if they mess up it is your hard work going up in smoke.

    The other thing that is important to think about is insurance. Get some. Two main reasons, they will be the ones that will be paying for the lawyers, and second, they are much less likely to go fishing for someone else to sue if you have insurance.
    Rock and Glock and RickyD like this.

  13. #13
    Moderator
    Array Rock and Glock's Avatar
    Join Date
    Nov 2005
    Location
    Colorado at 14,650'
    Posts
    12,541
    A good plaintiffs bar attorney will sue you and your LLC's and corps regardless, and it could double up your insurance. For example, I have two E&O policies - one for my S Corp and one personally. I also have a personal umbrella.

    I still advocate an LLC and / or S Corps if your are in an industry that carries public risks, such as a gun store or anyone with wheels.
    RickyD and bigmacque like this.

  14. #14
    Member Array cdynaco's Avatar
    Join Date
    Apr 2013
    Location
    Southern Oregon Mountains
    Posts
    57
    Quote Originally Posted by bigmacque View Post
    I'd also consider having a competent CPA file the taxes for you; one more name on the return, even though he shares no liability, will still make for a better presentation to the IRS.
    I was given that sound advice by a successful realtor 30 yrs ago. Although I stayed on top of tax laws, and did most of the prep work to keep costs down, I had a CPA do the return and sign off on it.
    An IRS agent seeing that is less likely to question a business return than if the owner was the only signer. Money well spent.
    bigmacque likes this.
    Charliehorse .........................>>> I support the NRA!

    Gun Ownership is NOT a Gun Crime!

  15. #15
    VIP Member Array BigJon10125's Avatar
    Join Date
    Apr 2011
    Location
    California
    Posts
    3,110
    Quote Originally Posted by Rock and Glock View Post
    Just remember you need to respect the LLC's separate legal existence and be real careful about your P&Q's.
    The commingling thing took a while to get used to. I run DJ business and did it as a form of liability insurance. Haven't been sued, but better safe than sorry.
    BigJon


    "Better to keep your mouth shut and be thought a fool than to open it and remove all doubt" ~ Mark Twain

Page 1 of 2 12 LastLast

Links

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  

Search tags for this page

are llc worth ?

,

ffl dealer sole proprietary income tax

,

home ffl income tax

,

is an llc worth it

,
is forming an llc worth it
,
is it worth a llc
,

is it worth getting an llc

,
is it worth having a llc
,

is it worth having an llc

,

is it worth it to form an llc

,

is llc worth it

,
it is worth getting llc for rental
Click on a term to search for related topics.

» Log in

User Name:

Password:

Not a member yet?
Register Now!

» DefensiveCarry Sponsors