Must choose S-Corp or C-Corp or "Pass-Through Partnership"

[Mark Perrine]

I've read the great posts on this subject so far. But I still feel like a chimp with a toaster.

I'm going through setting up an LLC through LegalZoom. My business partner and I will be starting our rehab business as 50/50 partners.

I am a Realtor and marketing guy, my partner is the owner of a large heating/cooling company and experienced contractor. He has contacts that wish to invest in our business so our intent is to borrow from them as our main source of funding.

We don't plan on holding any properties, but rather stick to flipping.

On Legal Zoom even though we have been set up as an LLC- it is asking me to choose one of four options for taxation:

* C-Corp
* S-Corp
* Pass Through Partnership
* Pass Through Sole Proprietorship

I guess rather than to ask for advice (although I welcome it) - is there a way to find a good CPA or lawyer in my area on BP. I'd rather look here first than go through the Yellow Pages.

I really appreciate any ideas or help.

[Steven Hamilton II]

Originally posted by @Mark Perrine:

I've read the great posts on this subject so far. But I still feel like a chimp with a toaster.

I'm going through setting up an LLC through LegalZoom. My business partner and I will be starting our rehab business as 50/50 partners.

I am a Realtor and marketing guy, my partner is the owner of a large heating/cooling company and experienced contractor. He has contacts that wish to invest in our business so our intent is to borrow from them as our main source of funding.

We don't plan on holding any properties, but rather stick to flipping.

On Legal Zoom even though we have been set up as an LLC- it is asking me to choose one of four options for taxation:

* C-Corp
* S-Corp
* Pass Through Partnership
* Pass Through Sole Proprietorship

I guess rather than to ask for advice (although I welcome it) - is there a way to find a good CPA or lawyer in my area on BP. I'd rather look here first than go through the Yellow Pages.

I really appreciate any ideas or help.

My advice is either type of corporation. That will mostly depend upon your tax situations. You need to spend some time talking and going through it in detail. I'd be happy to explain the differences for you and what can make you choose each type. I would recommend strongly avoiding the partnership option unless you want to pay a lot of SE tax.

Don't "save" money using Legal Zoom. Spend the money on the attorney while you and your business partner will spend some time talking about what issues can come up, buy out agreements, how to value if one wants out. What if someone dies etc....... What if one divorces and so on.... Talk now before it becomes VERY costly when someone is being stubborn later.