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Originally Posted by shuki
I have been doing some research of my own and have a few points to throw in to the mix. I want to preface that this is not info I have recieved from a qaulified CPA or tax attorney so take it with a grain of salt.
I am leaning towards a main C-corp with the possability of having other s-corps or llcs's under it in umbrella form.
My main reason for wanting the main entity to be a C-corp is for credit purposes. I was advised that your corp will have the easiest time establishing credit with companies if you are a C-corp. This is credit with no persoanl guarantee by the way. I use my credit on my persoanl file for my personal cc's and home car etc. but want the business aspects to be seperate and with no PG.
I have a friend who recently set up a C-corp and has recently recieved:
$5,000 in credit with staples
$10,000 from Dell
$15,000 from Best Buy
10,000 from Comp Usa
$7,500 from Home depot
$5,000 from Expo
$5,000 from lowes and the list goes on.
Now don't get me wrong this is not the only reason why I would choose a C-corp and also you must understand that it doesn't give you cart blanche to just go out and spend blindly. You must be able to actually pay these bills back, but it is a lot easier to start up a biz with the help of these credit lines.
I myself am still confused with the structure and setup of a C-corp and the double taxation aspects, but like I said I am leaning towards this setup.
If any of the cpa's are available I would love to speak with you. Either leave your info in the thread or drop me a line. My contact info is in my sig.
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Shoot me an e-mail @
[email protected]. There are a couple things- 1. An S-Corp cannot have a C-Corp as an owner, or another S-Corp, or an LLC, or an LLP, only individuals. 2. C-Corp has double taxation and will kill you unless you are very savvy. 3. The bank that gave your friend all his loans is definitely an exception, and quite frankly are idiots. I specialize in financial services audits and most C-Corp loans require personal guarantees unless the loan is a slam dunk, meaning, it's for land or building that has value in excess of the loan, about an 80% LTV is the max, and that is the rule with pretty much any asset that does not have accelerated depreciation. And, that is not a computer. 4. If you form an LLC or LLP you automatically have credit because it is your personal credit, so it is instantaneous. Now if you have bad credit, sorry. But, a bank does not appreciate not getting paid back, so if your friend that got all those loans happens to default, I guarantee they go after him, and there are ways to do that. I'm not going into details on that, but trust me, they can burn you. Shoot me an e-mail if there is anything else.