HVACvend Posted September 28, 2015 Share Posted September 28, 2015 I'm having trouble actually getting paperwork up and ready to file my soon to be new vending business. All I have right now is a combo machine placed at my current job. I bought the machine for basically nothing to test the waters and see if I would be interested in this business. I have leads on new locations now and am of course waiting until I actually have a business in my name to purchase new or new/used equipment and place them. I also have my eyes on some bulk machines so there will be a mix of bulk and food/beverage machines. My questions are, how in the world do I get started in my state? It seems like they want the number of locations and number of machines on their paperwork. But the problem is, I currently have no locations ran by my "business". I do want to LLC the company but I need to register a company first before I can proceed. Basically I want to have all my ducks in a row and be 100% legit with taxes paid and what not. Filing with IRS and the procedure involved with that. If you made it this far, please take the time to explain to this guy what it takes to actually start up a business. Link to comment Share on other sites More sharing options...
RJT Posted September 28, 2015 Share Posted September 28, 2015 Probably going to be hard to find someone (willing to share) from Illinois to give you specific information. Call the state agencies you seek a license for. My advice is to start with a sole proprietorship (its the simplest) then once you get going look at LLC etc. Any of these agencies should be able to guide you in what they require. Link to comment Share on other sites More sharing options...
AngryChris Posted September 28, 2015 Share Posted September 28, 2015 Call a local tax prep company. They should be able to lead you in the right direction. State sales tax laws (if state sales tax exists in your state) vary from one state to another. You may need to get some sort of vendor's/resale license, which will require an FEIN which you will get after you file your business. Link to comment Share on other sites More sharing options...
RJT Posted September 28, 2015 Share Posted September 28, 2015 He should not need an EIN if he is not hiring anyone and does a sole proprietorship. However, like you said he should contact a tax expert in his area. http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Do-You-Need-an-EIN? Link to comment Share on other sites More sharing options...
HVACvend Posted September 28, 2015 Author Share Posted September 28, 2015 Thanks guys!! I'll turn to a tax pro to set me straight!! Link to comment Share on other sites More sharing options...
PHX1 Posted September 29, 2015 Share Posted September 29, 2015 Probably going to be hard to find someone (willing to share) from Illinois to give you specific information. Call the state agencies you seek a license for. My advice is to start with a sole proprietorship (its the simplest) then once you get going look at LLC etc. Any of these agencies should be able to guide you in what they require. Do not do a sole proprietorship!!! These are the worst business forms you can choose. They offer no legal separation between you and the business, so if you get sued because someones kid gets smashed to death by one of your soda machines, they theoretically could take you house car ect. Go straight for the LLC or corporation. Link to comment Share on other sites More sharing options...
RJT Posted September 29, 2015 Share Posted September 29, 2015 Do not do a sole proprietorship!!! These are the worst business forms you can choose. They offer no legal separation between you and the business, so if you get sued because someones kid gets smashed to death by one of your soda machines, they theoretically could take you house car ect. Go straight for the LLC or corporation. I want argue that it is not the best protection. However for many that are starting out it is more than they want to do as far as up front legal expense. Also an LLC or Corp does NOT always protect you personally from any and all liability including injury. While I am NOT an attorney it can be easily "googled" to see what they do and do not protect you from. The key is always having good liability insurance to help protect you. Link to comment Share on other sites More sharing options...
PHX1 Posted September 29, 2015 Share Posted September 29, 2015 I want argue that it is not the best protection. However for many that are starting out it is more than they want to do as far as up front legal expense. Also an LLC or Corp does NOT always protect you personally from any and all liability including injury. While I am NOT an attorney it can be easily "googled" to see what they do and do not protect you from. The key is always having good liability insurance to help protect you. "Liability issues are of particular concern for sole proprietors because the owner is personally liable for claims against the business. Unlike an LLC or corporation, if a sole proprietorship loses a lawsuit or otherwise finds itself in debt, not only will the business be liable for the debt, but the owner/sole proprietor will be as well" Also, creating an LLC is a piece of cake. You can do it all online, costs less then16 dollar filing fee, 20 dollars if you want it expedited. Sole proprietorships are old fashioned and outdated compared to the current available legal forms of a business. Link to comment Share on other sites More sharing options...
RJT Posted September 29, 2015 Share Posted September 29, 2015 "Liability issues are of particular concern for sole proprietors because the owner is personally liable for claims against the business. Unlike an LLC or corporation, if a sole proprietorship loses a lawsuit or otherwise finds itself in debt, not only will the business be liable for the debt, but the owner/sole proprietor will be as well" Also, creating an LLC is a piece of cake. You can do it all online, costs less then16 dollar filing fee, 20 dollars if you want it expedited. Sole proprietorships are old fashioned and outdated compared to the current available legal forms of a business. Like I said I want argue that an LLC or Corp is not the better answer. While I know you can do a lot on line now without an attorney I am just not sure I would trust doing things that involve the IRS and other federal agencies to the internet. I am just saying a SP is the simplest for people to start with, with just a couple machines out, as many on here like to say "getting their feet wet".I would rather see them with good GL insurance and a SP than a LLC or Corp and little to no GL insurance. Link to comment Share on other sites More sharing options...
PHX1 Posted September 29, 2015 Share Posted September 29, 2015 LLC is still better. Not sure if you have ever set one up RJT? Its about two pages of forms. You do not need to get a attorney or a tax person involved. You do it straight through the states website. And once you have your LLC set up you go to the IRS sight and you can get you tax ID within 10 min. Corp is going to be more involved because you have to issue so many share of stock and you have to have it incorporated. RJT, I guess I wonder why anyone would go with a sole proprietorship verses a LLC with the same good GL insurance? Its the best of both worlds. Setting up an LLC takes less then an hour on your states website. Also, with a LLC you can have your earnings pass through the LLC and you file them on the same form as your personal income. What is one reason why someone should choose a SP vs. a LLC RJT? Link to comment Share on other sites More sharing options...
HVACvend Posted September 29, 2015 Author Share Posted September 29, 2015 I'm not sure what the S.P. Costs up front but I did see that an LLC is $500 right off the bat... I'm not trying to add to the fire but $500 could be used for machines or product ect... Just my .02 so far. And once again, I'm just trying to figure out way to be 100% legit. Of course my personal insurance policy would need some serious upgrading. Link to comment Share on other sites More sharing options...
AngryChris Posted September 29, 2015 Share Posted September 29, 2015 I started as an LLC. The stipulation about having an LLC is that you are not deemed PERSONALLY liable for a business-related accident. If your business gets sued because someone got food sickness and they were awarded more than your General Liability will cover, then your business assets may be at stake. If you get sued by your state for unpaid sales tax, the court might go after your business AND personal assets. If you used your business credit card to rack up huge debt for personal items that don't qualify as business expenses, then you file for bankruptcy, they'll very likely take as much from your business and personal assets as they can. Get an LLC and be responsible. In a sole proprietorship, you can't file your business for bankruptcy and walk away if it fails for any reason. Link to comment Share on other sites More sharing options...
AZVendor Posted September 29, 2015 Share Posted September 29, 2015 I'm not sure what the S.P. Costs up front but I did see that an LLC is $500 right off the bat... I'm not trying to add to the fire but $500 could be used for machines or product ect... Just my .02 so far. And once again, I'm just trying to figure out way to be 100% legit. Of course my personal insurance policy would need some serious upgrading. A sole proprietorship has no startup costs other than getting a sales tax license from the state and the city you work out of. The sole proprietor is simply an election you make when you file your tax returns. When you get a sales tax license then you will mark it as a sole prop and you will use your SSN as you ID number with them. LLC's, S-Corps and C-Corps have more legal ramifications so there are costs involved with them. Link to comment Share on other sites More sharing options...
RJT Posted September 29, 2015 Share Posted September 29, 2015 I started as an LLC. The stipulation about having an LLC is that you are not deemed PERSONALLY liable for a business-related accident. If your business gets sued because someone got food sickness and they were awarded more than your General Liability will cover, then your business assets may be at stake. If you get sued by your state for unpaid sales tax, the court might go after your business AND personal assets. If you used your business credit card to rack up huge debt for personal items that don't qualify as business expenses, then you file for bankruptcy, they'll very likely take as much from your business and personal assets as they can. Get an LLC and be responsible. In a sole proprietorship, you can't file your business for bankruptcy and walk away if it fails for any reason. An LLC does not protect you 100% from all liability personally including financial and injury liability. Most all creditors make you sign a personal guarantee so unless you are doing cash and carry only you will most likely be held liable. http://www.nolo.com/legal-encyclopedia/llc-basics-30163.html Exceptions to Limited LiabilityWhile LLC owners enjoy limited personal liability for many of their business transactions, this protection is not absolute. This drawback is not unique to LLCs, however -- the same exceptions apply to corporations. An LLC owner can be held personally liable if he or she: personally and directly injures someone personally guarantees a bank loan or a business debt on which the LLC defaults fails to deposit taxes withheld from employees' wages intentionally does something fraudulent, illegal, or reckless that causes harm to the company or to someone else, or treats the LLC as an extension of his or her personal affairs, rather than as a separate legal entity. Link to comment Share on other sites More sharing options...
AngryChris Posted September 30, 2015 Share Posted September 30, 2015 An LLC does not protect you 100% from all liability personally including financial and injury liability. Most all creditors make you sign a personal guarantee so unless you are doing cash and carry only you will most likely be held liable. http://www.nolo.com/legal-encyclopedia/llc-basics-30163.html Exceptions to Limited LiabilityWhile LLC owners enjoy limited personal liability for many of their business transactions, this protection is not absolute. This drawback is not unique to LLCs, however -- the same exceptions apply to corporations. An LLC owner can be held personally liable if he or she: personally and directly injures someone personally guarantees a bank loan or a business debt on which the LLC defaults fails to deposit taxes withheld from employees' wages intentionally does something fraudulent, illegal, or reckless that causes harm to the company or to someone else, or treats the LLC as an extension of his or her personal affairs, rather than as a separate legal entity. It's still worth the money to file for an LLC, as it is far superior to a sole prop. Link to comment Share on other sites More sharing options...
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