Welcome to our community

Be a part of something great, join today!

Log in
  • Hey all, just changed over the backend after 15 years I figured time to give it a bit of an update, its probably gonna be a bit weird for most of you and i am sure there is a few bugs to work out but it should kinda work the same as before... hopefully :)

getting legit.. whats your company?

Zakaree Sandberg

Zakaree Sandberg

Well-known member
Joined
Dec 28, 2006
Messages
4,260
Reaction score
1
Points
38
Age
43
Location
Los Angeles, CA
so im going to get legit here..

right now I just have a basic DBA.. done through the bank..
but that really doesnt protect me or help me get creative with taxes..

so im going to set up a company..

first..

what do you have? llc, s corp, so on...
how much do you pay a year for it?
is it under your name? or did you come up with a clever company name?
and along with that, which would be better to do?
 
Back in the day I made the mistake of going with a Sole Proprietorship and tying myself to HD with HD Cinema Group. A descriptive name like that ends up being confusing because of all the other companies doing the same thing (HD Cinema, HD Camera Rentals, etc).

Finding a biz name that isn't already in use is really hard though. We decided to have fun and created Royal Galactic Cinema as an LLC. LLCs are nice because you can set them up in any state. This one is set up in WA which doesn't have an income tax.

I hired lawyers to set up the LLC and it cost $1,500. Pretty pricey but I wanted to know it was done right.

I use a PO box company called Earth Class Mail which actually gives me a street address in Seattle and sends me a scanned image of every piece of mail that comes in. I can chose which mail goes to the trash and which gets forwarded on to me. $30/month.
 
If you're making good money, like over 100K, go for an S-Corp and pay yourself in dividends.
 
Originally Ketchframe was an LLC, but is now a C Corp established to go Public and in the process, together with GreenSolarEnergycorp. while KetchRossiHumanitas is a non-profit organization, but still set up as Corporation.

The validity and legitimacy of a Business comes also form a Physical Business commercial address none residential.

Different needs different solutions, so find a good Attorney and Accountant and see what is better for your particular need, both for taxes purposes in regard to the annual venue, as well as to protect your assets and your self.

Also Zak, each state has different fees for annual maintenance.
 
Zak,

Don't forget to buy a good insurance plan. Equipment, 3rd party liability, rental, etc.

David
 
Zakaree, wonder if Legal Zoom has a category that would fit. Might could get what you need in the way of forms online, if you have the time to take care of it yourself.
 
Here are the rule of thumbs I found:

Don't set up a corp unless you're making over 100k / year or you really expect to have some liability issues.

S-Corp - good for individuals looking for tax advantages. (FYI, the primary tax advantage here is coming from the avoidance of self employment tax and while you do end up paying other fees, that is where the 100k mark sort of evens it out.)

LLC - more for liability than tax. Real Estate people I'm told go for this option.

C Corp - the daddy corp is for when you want to go public. It's a much bigger deal to manage.

I don't know anything about setting up in various states for tax reasons and such. I have been told that if you're working California and operating legit, you'd have to pay the same taxes anyway or you're not operating "legit" - but I'll follow this thread to see if others have other thoughts on this.
 
You set up a corporation though your state's Secretary of State and that doesn't affect whether you are an S or C corp.

AFAIK S corp or C corp is an election you make with the IRS for tax purposes. S is essentially like operating as a sole proprietor for tax purposes but you have the liability protection of a corporation - ASSUMING THAT YOU MAINTAIN EVERYTHING PROPERLY, I.E. PAPERWORK, NOT COMMINGLING FUNDS, ETC. THAT WOULD ALLOW A LAWYER SUING YOU TO "PIERCE THE CORPORATE VEIL". This is true regardless of S or C type.

Setting up a corporation is very easy and doesn't really require an attorney. However, if you are concerned about limiting liability you may want to have an attorney maintain it for you and advise you (along with an accountant) on what you can and can't do in maintaining your limited liability status. This isn't really that hard as long as you read up on it and understand what you have to do.


http://www.irs.gov/businesses/small/article/0,,id=98263,00.html

"S corporations are corporations that elect to pass corporate income, losses, deductions and credit through to their shareholders for federal tax purposes. Shareholders of S corporations report the flow-through of income and losses on their personal tax returns and are assessed tax at their individual income tax rates. This allows S corporations to avoid double taxation on the corporate income. S corporations are responsible for tax on certain built-in gains and passive income."

To qualify for S corporation status, the corporation must meet the following requirements:

Be a domestic corporation
Have only allowable shareholders
including individuals, certain trust, and estates and
may not include partnerships, corporations or non-resident alien shareholders
Have no more than 100 shareholders
Have one class of stock
Not be an ineligible corporation i.e. certain financial institutions, insurance companies, and domestic international sales corporations.


As far as "going public" that is not just something you can choose to do, NASDAQ and NYSE require you to have substantial capital and if your company falls below the minimum stock trading price you will be "delisted". It also can be a whole lot of work to maintain the legal requirements, filings, quarterly reports., etc. which are much, much more stringent than a private corporation. There are a number of very good reasons that RED is a privately held corporation.
 
Again, if it's more about liability than tax you can look into professional liability insurance.

I have this in Australia and it protects me for up to $1 million per incident.

Sometimes clients like to slip into contracts that if you screw up, you can be up for not only any losses, but the potential profits they could have made by releasing!

Good way to lose your house if you aren't careful!
 
Zakaree Sandberg said:
im making over 100k/year.. would LLC not be good for that?
do you know how much per year an s-corp is?
Click to expand...

My company is an S-Corp. It costs $85 per year in Maine. If I remember correctly, there were real savings related to owning equipment in that structure.

But you really need to talk to an accountant. I know, I know, that's going to cost something, but you're talking real money here. Your money. Do you really want to trust decisions about your whole financial setup to a bunch of film makers?!?

Even if we were the right group to ask, we don't know your setup, and that makes a difference to the tax man. Better to ask for recommendations for a good accountant who knows the business and doesn't charge too much.
 
The other thing to consider is portion-of-completion accounting, so that if you have a big project running over more than one tax year you don't have to pay taxes on the big front payment. Its the same systems construction companies use.
 
Zak if you're going to do an LLC or S-Corp, do it in California if you're a resident here. Don't mess around with setting this up out of state. Sooner or later you'll get pinched. I've heard horror stories.
 
I understand trying to pay the least amount of taxes possible. But if you are living in CA, using our roads, polluting our air, occupying our space, and using our schools, the least you could do is pay your fair share.

In California, your fair share is a minimum of $800 per year. If you are <$100k, is that really too much to ask? Part of the reason our government (federal/state/local) is in the mess they are in is because of people deliberately braking laws to avoid taxes. The law in CA is that if you do business here you should pay taxes here (IANAL, do your research).

Do it right, pay your fair share for wherever you live. Your fair share is not $0, unless the law says it is.
 
I would avoid an LLC and go S-corp. I recently ran into a situation where I wanted to be paid through my LLC from to major Los Angeles based payroll companies. The long and short of it is they don't pay through LLC's unless you fill out an IRS form "8832" which essentially changes the way your taxed to at least an S-corp.... so you might as well set up an S-corp to begin with.
 
Michael Hastings said:
As far as "going public" that is not just something you can choose to do, NASDAQ and NYSE require you to have substantial capital and if your company falls below the minimum stock trading price you will be "delisted". It also can be a whole lot of work to maintain the legal requirements, filings, quarterly reports., etc. which are much, much more stringent than a private corporation. There are a number of very good reasons that RED is a privately held corporation.
Click to expand...

Michael, while you are correct in the above stated, there is more ways to go public, and benefit form Stocks which can be sued not only to sale but to offer to your main People and or to trade them for goods, services, etc.

Maintaining it, yes it is costly, but with current opportunities given by NASD operated OTC Bulletin Board, which you can do for about 100k and no need for an Underwriter or excess of Millions of Dollars in yearly revenues, again each for its uses.

In my cases for both Ketchframe Corp. and GreenSolarEnergyCorp I needed to be C corp to take them Public for obvious reason do to the way this corporations will be operated and in how many countries will be operated.
 
You must log in or register to reply here.
Back
Top