Covering multiple activities with one LLC?

[ilyaz]

In addition to scrapping I have another source of income (quite legal Has absolutely nothing to do with scrapping or ewaste or computers. I am considering registering an LLC for the scrapping business and wondering if I should have it cover not just scrapping but the other business too. Has anyone has experience with this? Is it a good or bad idea to combine multiple businesses under one LLC "roof"?



I asked my CPA and his short answer was "don't do it". I need to talk to him in detail but I am wondering if he's telling me that so that he can charge me more for registering multiple LLCs.

Thx

[wayne1956]

I wouldn't think that would be his reason. Best thing you can do is to have him tell you in detail why he says this, and see if it passes the smell test.

[pjost]

I do just what you are talking about. I have a Video Production business and my Scrapping business Incorporated under the same Corporate name. I don't know if it's wise to do that or not, but it does save some money in taxes. At least that's what my accountant says. I know being incorporated keeps your personal assets more safe if you kill or injure someone while working because the victim would sue the corporation, not you personally. That's the way I understand it anyhow. I'm no expert tho.

As far as cost, yes, it would cost more to have two llc's. And twice as much paperwork. Like I said I'm no expert, but I guess I would get a second opinion from another accountant and go from there. Also have the first CPA explain to you why it's a bad idea and report back please.

[etack]

By combining your businesses in one LLC you defeat the purpose of the LLC. You keep them separate to protect each entity from liability hence Limited Liability Company.

I know accountants that tell you if you own properties to make each one its own LLC. Additionally if you own them outright to then sell them to another LLC and put a lien on them so you are first paid in any lawsuit. You should heed the advice of your accountant and if you don't want him to make the LLC then do it yourself online. its pretty cheap to do. Also if you have considerable assets in one LLC you should talk to an attorney about ways to protect them inside an LLC.

In Ohio one drawback with an LLC is that any legal action that is taken you must be represented by counsel. That mean if you have a small claims court claim you must be represented. If not you can have your LLC stripped away and be reclassified as a SP in the lawsuit and not have the LLc personal property protections.


Eric

[phred59]

he is telling you not to do it because if they are covered under the same LLC, they carry each other's liabilities. Also could put your LLC into a higher tax bracket than you would wind up in carrying both seperate as long as the businesses each retained enough capital for operations (you don't take all of the profits and stuff them into your personal account)

It's just an overall better idea to have them separated so if something goes down, the one doesn't sink the other.

[wayne1956]

Did not think of these reasons. Makes a lot of sense, and would be a good reason why the OP accountant said not a good idea. One option to save money might be trying out the website legalzoom.com

[matador]

I've already talked about this to you, but as for the liability:

It depends on your setup. I have two businesses, where one hand claps the other if you will.

Are you just looking to do E-Scrap/Refurb, or are you looking to do other types of scrapping?

[ilyaz]

Are you just looking to do E-Scrap/Refurb, or are you looking to do other types of scrapping?

Well, it's sort of the other way around: I originally started by doing non-ferrous scrapping then moved to primarily ewaste, now trying to do more refurbs. Up until now it has worked fine without an LLC but I guess that's cuz nobody has sued me yet (knock on wood)

I am not planning to move beyond "basement scale" of operations, at least not now. No plans to hire anyone except for maybe my teenage boys. But I should probably set up an LCC anyway to sleep better

[armstrt8]

Well, it's sort of the other way around: I originally started by doing non-ferrous scrapping then moved to primarily ewaste, now trying to do more refurbs. Up until now it has worked fine without an LLC but I guess that's cuz nobody has sued me yet (knock on wood)

I am not planning to move beyond "basement scale" of operations, at least not now. No plans to hire anyone except for maybe my teenage boys. But I should probably set up an LCC anyway to sleep better

I setup an LLC and it was one of the goofiest things I did. I dont think im ever going to touch it until my operation turns into actual employees or a warehouse.
You will then pay taxes on all the money you make
Your vehicle may no longer be insured unless you get a different insurance for your now "company" vehicle

[ilyaz]

I setup an LLC and it was one of the goofiest things I did. I dont think im ever going to touch it until my operation turns into actual employees or a warehouse.
You will then pay taxes on all the money you make
Your vehicle may no longer be insured unless you get a different insurance for your now "company" vehicle

I have paid taxes ever since I started scrapping, so not sure if the amount will change if I do LLC.

You made a good point about the car, though. Didn't think of that angle at all.

[matador]

I have a 2 cars, and one truck that I personally insure.

My 1987 Chevrolet R10 is insured through my computer company (An LLC). It costs me $18 per month, and I have $1,000,000 in liabilities. My box van was $48 per month for the same coverage before I parked it.

Compared to a 20 year old single male, commercial insurance seemed cheap!

Your results will vary, though. Maryland has more laws than we do in Wyoming.