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  • #16
    Looking at LLC

    Good inputs guys ... I am going to review the LLC angle. I have a friend currently under an LLC being sued by a number of companies for contract issues, etc, so it will be interesting to see how she fares as they are suing both the LLC and her personally.

    Either way I found it easy to establsih either one and not very expensive. Just cost me the fee to file with the state (S-Corp) which was like $150. Legal Zoom wanted something like $600 to do the filing!
    Travis "Big T" Russell
    President
    Big T Productions Inc

    Owner and Operator of "The Plague" and "Camp Nightmare"

    Customer Quote of the year: "Damn, I pissed myself"

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    • #17
      Big T I almost fell for the legalzoom thing. Then I figured out how easy it was to file by myself. Saved myself hundreds that I was able to put into props instead of some other companies pocket for something I can do myself.

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      • #18
        Originally posted by riverswampboat View Post
        Am I missing something? If a person created an LLC then leased his building to said LLC/Haunted House and didn't have expensive liability insurance, if someone sued all that would be at stake is the haunted house and its assets?? Not the building or the owner's personal assets....??
        When people "incorporate" or create a managing corporation for anything they are working on, if something does go wrong, and someone is going to get sued, usually it is the corporation that gets sued. We all know that. Ergo, using tools like corporations are popular.

        However, what a lot of people don't know or realize is that if the offending act in question is particularly egregious, and if the proverbial man behind the curtain seems to just be hiding "behind the corporate veil" (the technical term for it) so as to avoid liability (for instance, sitting on a net worth of millions of dollars, while the corporation is penniless), then a court can elect to "pierce the corporate veil" and go after the man himself, deeming the article of corporation merely a facade or front. And mind you, this is with a corporation, one of the most powerful tools you can use to protect yourself.

        So, that said, I have to wonder . . . is an LLC any less "pierceable"?

        This all reminds me of when the former British PM Neville Chamberlain got off the airplane in 1938 and started waving around a copy of the Munich Agreement in front of the press and film cameras, calling it "Peace in Our Time", thinking that some flimsy piece of paper was going to hold back the nazi war machine, which obviously it didn't. He resigned and died in disgrace, two years later.

        This also reminds me of another piece of paper, fashioned into a table tent and that sat on my desk. It had a quote from the President and CEO of the telecom company I worked at, who had built it from the ground up. (Apparently they had passed these out at some function, and I inherited one.)

        It said "Leave Absolutely Nothing to Chance".

        I'm sure all of these legal designations are great for what they do, and probably make it easier to set certain things up as you go, but I doubt that they completely remove all liability and probably have less protective power than people generally seem to give them credit for. I think it would be very interesting for an attorney type to weigh in and offer some real world insight on this subject. It would probably prove quite illuminating. I know I'm not an expert, and would like to see how they play out in the real world.

        Originally posted by fearforyourlife
        Big T I almost fell for the legalzoom thing.
        "All I wanna do is a legal-zoom-zoom in a boo-room!!"



        *sorry, couldn't resist*

        C.
        Last edited by BrotherMysterio; 07-11-2012, 05:16 PM.

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        • #19
          BAHAHAHAHA! I can't believe you referenced Wrecks-n-Effect! Bahahahaha! Awesome!

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          • #20
            Pierceable!

            C,

            Aaahhh, love that word...as in piercing the corporate veil? Yeah in my S- corp building biz I've been involved in a few legal battles in the past 22 years. I had this one attorney trying to get me for "piercing the corporate veil" (meaning I was intermingling funds personally...which you cannot do!) So after dragging his client through the drudges & billing him umpteen hours at $400. an hour, he couldn't find one freaking document that I forgot to sign as Prez. or any piercing going on. So just for the BS he put me through, I counter sued his frivolous lawsuit ass...and won! I love saying that! Seriously though, one thing I've learned through the years...if someone wants to bring suit against you they can & you have to defend it regardless of what entity your trading under. So I say, consult with an biz attorney (because every persons scenario is different) and he should be able to guide you in the direction that best protects you. Believe me all...I've been run thru the ringer (not in the haunt biz yet!) but in my building biz & if you don't have your ducks in a row & a good legal team you will get chewed up (sometimes even if you win). Consider it a biz expense & get it right from the get go. Sad, but it is the world we now live in...you know..."what can my lazy, non-working ass get from this filthy rich haunted attraction owner & his insurance"? Oh by the way...don't waste your money on those signed releases...they are pretty much useless. Any good lawyer will literally tear those up. Can you tell I'm fond of attorney's? LOL Only the one's protecting MY interest! LOL Juuusssttt my two cents!



            P.
            Jim Pashley
            The FEAR FACTORY
            www.thefearfactorynj.com
            855-NJ HAUNT
            sigpic
            "WE MANUFACTURE NIGHTMARES"

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            • #21
              Keep in mind there is 26 ways a corporation veil can be pierced. You can set up LLCS that report as S Corps (That's what I do) or just an S-Corp or LLC online yourself, an accountant or lawyer can do it. If you're not making money yet I would go with an LLC. You can use The Company Corporation who are suppose to be really good and will give you 50K in legal service if your corporation is pierced. Anyone can sue you for anything no matter what you do! An LLC protects your personal assets but that doesn't stop someone from going after them...you just have a better chance of the judge dismissing it.
              Again this isn’t legal advice this is just how I roll.

              https://www.incorporate.com/

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              • #22
                Originally posted by BrotherMysterio View Post
                However, what a lot of people don't know or realize is that if the offending act in question is particularly egregious, and if the proverbial man behind the curtain seems to just be hiding "behind the corporate veil" (the technical term for it) so as to avoid liability (for instance, sitting on a net worth of millions of dollars, while the corporation is penniless), then a court can elect to "pierce the corporate veil" and go after the man himself, deeming the article of corporation merely a facade or front. And mind you, this is with a corporation, one of the most powerful tools you can use to protect yourself.
                What BM describes is the owner being brought in due to actions or inactions of the owner. I'm thinking Enron. If someone sues your company and you honestly didn't do anything wrong you can still be sued by mingling personal and haunt monies. Using your personal credit cards for haunt expenditures. Dipping into the haunts funds for personal use. The hearse you drive around for advertising is in your personal name and not your haunts. etc. etc. etc. The property is under your name and not the haunts. That's why I had to rent my building to myself under my haunts name. An accident happens on your location and there is no rental agreement, aw hell I'm going after the land owner too! That simple.

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                • #23
                  There is a tax issue also

                  C corp is just not a good idea for any small business because you get taxed twice on the companies earnings if you ever take money out of the company.

                  With an S-Corp or an LLC taxed as an S-Corp you can essentially avoid paying payroll taxes on roughly half of the Corps earnings. To keep out of trouble with the IRS you should pay yourself a salary that is roughly half of your yearly income, then you can take the other half as a distribution, which will keep you from paying the roughly 15% payroll tax on the distribution (but you are still paying income taxes on the entire amount of the Corp's earnings).

                  If you do an LLC taxed as a partnership you pay self employment (payroll) taxes on every dollar of the Corp's earnings, but you can legally avoid paying workers comp by being taxed as a partnership IF you don't have any employees (there are many ways to pay actors without making them employees).

                  Not trying to brag, but FYI I am a CPA who does taxes for a living.

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                  • #24
                    Originally posted by C&D_Haunts View Post
                    C corp is just not a good idea for any small business because you get taxed twice on the companies earnings if you ever take money out of the company.

                    With an S-Corp or an LLC taxed as an S-Corp you can essentially avoid paying payroll taxes on roughly half of the Corps earnings. To keep out of trouble with the IRS you should pay yourself a salary that is roughly half of your yearly income, then you can take the other half as a distribution, which will keep you from paying the roughly 15% payroll tax on the distribution (but you are still paying income taxes on the entire amount of the Corp's earnings).

                    If you do an LLC taxed as a partnership you pay self employment (payroll) taxes on every dollar of the Corp's earnings, but you can legally avoid paying workers comp by being taxed as a partnership IF you don't have any employees (there are many ways to pay actors without making them employees).

                    Not trying to brag, but FYI I am a CPA who does taxes for a living.
                    Yeap... I would go with C & D Haunts says. I do believe the 50% is the conservative view. In high income situations It would not apply. Do you agree with that C&D?
                    I pay myself and wife a salary and in our state we still have to pay unemployment tax for my wife and I ..in case we fire ourselves (Nuts).. however they just raised the tax to over 60K in wages per quarter..so for the first year we have escaped that tax.

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                    • #25
                      Paying from your own pocket

                      C&D you mentioned something that has piqued my interest. My current accountant has shown me how to "post" expenditures for teh corporation when using my personal funds and or credit cards. Simply making journal entries. But what I am hearing from you is that this is not good, and everything should and must be paid through the corporation?

                      With this being the case, I am assuming than the officers would need to "loan" the corporation funds (we are in the early stages so personal funds are providing OPEX)?
                      Travis "Big T" Russell
                      President
                      Big T Productions Inc

                      Owner and Operator of "The Plague" and "Camp Nightmare"

                      Customer Quote of the year: "Damn, I pissed myself"

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                      • #26
                        Business expenses with personal funds

                        The surest way to keep yourself out of trouble would be to make a capital contribution into the company using your own personal funds, then once the funds are in the company pay the expenses. You are absolutely allowed to take money out and put money into your own company, and this does not pierce the veil. Just write a check out of your personal account, deposit it into the company's bank account, then pay your expenses out of the company account. This is the "best" way to do it and avoid trouble. Making journal entries for these purchases is probably the second best way, but I'm not a lawyer and I don't know how easy it would be for a prosecuting attorney to nail you for just making journal entries. But if you go the route of making a capital contribution into the company you really don't have anything to worry about.

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                        • #27
                          Has anyone used legal zoom for an LLC for Indiana? Their website has a $99 economy llc startup. Seems easy enough but what am I not getting it seems a little to easy??
                          BARN OF TERROR
                          www.barnofterror.us

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