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Understanding Which Business Types Fit Your Lawn Care Company

Understanding Which Business Types Fit Your Lawn Care Company


so one of the next questions you’re
going to have is if I create the business how do I actually legally start
a business to the government there are a number of different ways that you can
create a business it’s been said that here in the United States at least and
Canada as well it’s extremely easy to start a business you just print up
business cards and boom you’re in business and to a certain extent that’s
true what you want to do though is to protect
your assets so what our government has given us are these sort of vehicles per
se that you can get into which will then separate the business as an entity from
you personally if you’re out there in your mowing grass and you run over
somebody’s pet cat you’re liable for that cat now chances are it might not be
worth very much it could be though and it’s certainly a painful experience but
they will come at you and they will say you Fred why did you run over my cat you
need to pay whatever damages are what the government has given us is the
opportunity to create these things called corporations and so there’s a
number of different ones and that protects you because what all of these
entities will do is they create this entity called in our case called clipped
lawn care that exists out there and if clipped lawn care as an entity were to
do a damage or be sued or something like that
it’s not Dave Tucker it’s clipped lawn care and so the assets that cliff lawn
care has our subject do that lien or that or that judgment or whatever might
come down on it and those assets would be some trucks and some mowers and some
trimmers and things about along those lines so that’s why having a corporation
helps so that the C Corp is the biggest one and you probably don’t need to start
with that you can always move into a C Corp if you have to another one is
called an S Corp and an S Corp is a smaller entity there’s a limit
many stockholders you can have it’s still quite a quite a few hundred or so
and about the escort what that does is that has a direct flow through what they
call it flow through so if the company makes ten thousand dollars that flows
onto your 1040 and it’s the the government then considers that you made
those ten thousand dollars and you are now liable for the taxes on those ten
thousand dollars a profit and that’s why a lot of businesses will do what’s
called minimizing the profit so they’ll do everything they can to make their
profit looks bad at the end of the year because you’re gonna have to pay
personal taxes on that money and then you have LLC’s limited liability
corporations which are similar to the S Corp and that the that the money flows
through and any profits or loss flows right down to your 1040 form but they’re
also they’re they’re limited and less and then you can have a partnership and
then you have sole ownership and the sole ownership is is the riskiest
because that’s the one where you’re going on your mowing the grassy and
you’re breaking the window or killing the cat so you really should look at
these and you should go down to a CPA or you could use something like Legal Zoom
it really is not very expensive and it’s not that hard it’s a little bit of
paperwork to set up your S corp or your LLC and once you set that up but you’ll
get some papers and it’ll say you are official and you’ll have a what’s called
an FBI and a federal employment identification number and that’s sort of
like a social security number but it’s for your entity so once you have that
you can then do payroll and you can register you can register your vehicles
in that in the name of that corporation instead of in your name you can buy the
lawn mowers through the corporation instead of you personally buying them
and and that sort of thing so it is a good idea to do that whether you have to
do that right up front not depends on how many personal assets
you have if you’re in your 40s and you’re starting this is your second
thing you already own your house and you own the cars and things like that then
set it up before you actually do any work
if you’re just a young person coming out of high school and you want to start
this up and you have no assets then you could you could wait a little while
before you did it but you want to get it done fairly soon and like I said it’s
not very expensive so decide what you want to be my recommendation is probably
that you would go with an LLC or a partnership or maybe an S corporation
but get that down first and then start doing your work you

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