Today, we’re going to be talking about LLC vs S corps, and C corps, what the differences are, and how they can actually help you build your business bigger, better, and baddest of them all, right.
You never have to worry about money in the bank to pay your personnel during the slow periods.
Right. Guys. So let’s get into it.
Let’s not waste any time.
Let’s get into it.
Let’s talk about LLC vs S corps, or C corps.
And we’re going to go over the distinctions between an LLC, an S corp, and a C corp.
Now the first thing we got to do, I got to give you a disclaimer.
Not an accountant.
I am not a CPA.
I‘m not an attorney.
If you need actual advice, I encourage you, I demand that you go talk to an accountant and, or a CPA regarding LLCs and S corps or an appropriate kind of attorney.
I am not here to give you legal, accounting, or CPA advice at all.
This is done for entertainment and educational purposes only.
I am not a registered accountant or an attorney. I cannot give you this advice legally.
So I encourage you to verify anything that I say with an attorney or an accountant.
This is strictly to give you an overview and hopefully give you some sort of direction and idea of where to go.
So now that we got that disclaimer over, let’s talk about what an LLC is.
What is an LLC or Limited Liability Company?
An LLC stands for a Limited Liability Corporation.
Basically, what an LLC does, is it puts a barrier blockade between your personal assets and your corporation’s liabilities.
An LLC prevents you from being sued personally for the actions of your corporation.
Stops that from happening, and it gives you anonymity… it makes you anonymous, right.
It actually protects you.
It forms a line of defense between you and the corporation.
And if you really know how to do these structures properly, you never have to own anything ever, and you can be happy.
This is the only way the great reset is going to be done is knowing how to structure your business and personal life, right.
Now I can go over, and I’ve got some masterclasses that I’m going to make available very soon in the paid membership group.
You’re more than welcome to go to the paid membership group.
I’m going to make those videos available on that group, and you can go and check those out for yourself.
Now you can then see how we do the corporate structure. Okay. Good.
So now that we know what a Limited Liability Corporation is, let’s go over a little bit of it.
Owners are called members.
They’re not employees. They are members.
In fact, members cannot be employed by your LLC. They cannot be employees.
Members are members. They’re owners, right.
Don’t worry, I’ll explain it a little further down.
“But Jae, but I work… blah, blah, blah.” We’re going to get into it. Hang on. Hold on. We’re going to go over it. Don’t worry.
But members cannot be employees legally within an LLC, but let’s go in.
Members don’t get a salary, they get what’s called a distribution, and distributions are taxed in certain different ways.
But that’s how members get paid.
They basically get like… In the stock market, they get a dividend, if you will.
They get a portion of the profits.
However that works out, they get a distribution, and that distribution then can be taxed on your personal taxes in a certain way.
So that’s what an LLC is, but now let’s talk about an S corp or a C corp.
What is an S Corp/ C Corp?
Now I’m not going to get into the actual minutiae of S corps versus C corps because, quite honestly, I don’t know them all.
I just know the overall, the umbrella, the 30,000 feet view of it.
Check with your accountant, check with your CPA on this.
But I’m just going to give you a basic idea of the differences between an LLC and an S corp.
And when I say S corp, I’m also meaning C corp.
An S corp and a C corp. These are not corporate structure entities.
They’re not LLCs.
What they are, are tax classifications.
That’s how you get taxed, and you have to apply certain procedures.
Like you got to provide a salary and so on.
They are not corporations of themselves.
When you sign up for an S corp, you are signing up for a certain tax classification, not a business structure like an LLC.
LLC vs S Corp
Right. However, your LLCs can operate as an S corp.
So you can choose to classify your LLC and get taxed as an S corp or a C corp, et cetera.
That’s how you marry up the tax classifications with your business structure.
So when it comes down to it, all businesses are LLCs, so you should go get an LLC.
Best States to Incorporate In
There are four states that you really should choose when developing in a corporation. Let me see if I get these right.
One of them is Wyoming, Nevada, Delaware, and, I believe, Alaska. Right.
Those are the most favorite places you can get your corporation at very reduced prices and so on and so forth, with Wyoming being the best, right? So you should look into it.
Now that doesn’t mean if you’re in Michigan like I am, you can’t go get an LLC in Michigan.
However, I would really suggest you go get Delaware, Nevada, Wyoming, and Alaska, I believe are the four.
Wyoming being the best out of all of those four.
So you should actually really consider getting an LLC in one of those four states, with Wyoming being the best.
More on LLC vs S Corp
But LLCs can choose to be an S corp or C corp again, and they could choose to have that classifications.
And here’s where the best part comes, right.
When you get an LLC, and you choose to become an S corp, not only can you get your distribution as an LLC member, you can also have an employee… you could be an employee and get a salary from the company.
Remember I told you a little earlier I’m going to show you how you can actually get paid a salary from your LLC.
Now, this is going to be good because you can actually if you choose an S corp, you can then become a paid employee of your LLC.
And that’s just choosing that S corp tax classification.
You could get your salary and your distribution.
Both of those are taxed differently on your personal income taxes.
Just because you’re a member or employee of the corporation, you are still subject to that protection that an LLC gives you as a member.
So they can’t sue you.
Even though you’re an employee of the company, even though you’re a member of the company, they can’t sue you if something goes wrong.
That’s one of the great things.
Plus the tax benefits of the S corp and C corp, right.
It’s Easy to Create an LLC
This is amazing because you don’t have to be a citizen in the United States to get an LLC.
Anybody in the world can form an LLC right here in America.
It makes you anonymous.
So you can totally disappear completely from it.
Not only that, you can form a tax structure that gives you a holding company, and then you can have sub-LLCs down below you, which will not only help your taxes.
It could help you get cheaper insurance.
It could help you with so many things.
Plus the benefits of it, and this is its biggest benefit, is credit..
You form an LLC.
Getting an EIN Number
You can apply for an EIN number, which is basically a social security number for your business. It’s the same number of digits.
It’s just the digits are separated in different ways, but it’s an EIN number, Employment Information Number, I believe it’s called.
But you can apply for that. And then, once you have your corporate structure, and your minutes and all that good stuff, and all your paperwork, you can apply for a DUNS & Bradstreet number.
And it’s very simple.
If you go to the free Facebook 7 Figure Moving Academy, I give you a way to get… an example of a PDF, an eight-page PDF, that will teach you how to get your DUNS & Bradstreet number, which then will help you get a PAYDEX Score, which is sort of like your FICO Score for your personal credit rating.
PAYDEX and Duns & Bradstreet Number
PAYDEX is a personal credit score system for corporations.
And to do that, you need to have a DUNS & Bradstreet number first.
So you can build up a credit report and so on, and report your tradelines to that.
Here’s the thing, each corporation you form can easily get a 100K to one mill in credit, depending on the length of your business and so on and so forth.
You will need to start off with personal credit.
You will need to fix your personal credit if you have a poor score, but there are ways around that where you don’t even need a personal credit check to build up tradelines on your DUNS & Bradstreet to do that.
Within three to six months, you could have a 100K in credit available to you for every LLC that you form.
Building a Bulletproof Corporate Structure
I’m going to go over the kind of a structure that you could form up.
First of all, you want a holding company.
Below that, then you can have different LLCs.
So you can actually form an LLC here, which is a holding company that then has these subcategories.
Each of them all getting a 100K in credit or more.
You could do more.
Each having their own entities.
For instance, you’ve got your holding company, then you go over here, and you get a personnel company, which basically is an HR company.
You can go and get a personnel company that hires people.
Then those people that they hire, you can lease those people out to your moving company.
This will save you tax money, and will save you on insurance like Workman’s Comp.
Because under this, you could classify your guys as general labor.
And then that general labor that is going over here and working for your moving company, which is a completely different LLC.
That LLC pays this LLC a little bit of a fee for those people, and then those people are paid by this company here.
And then they’re considered general labor, which can save you a lot of money on Workman’s Comp.
Guys, go get an LLC.
Go get a Wyoming LLC.
Go find a company or an attorney in that area.
They’re probably going to charge you probably six, 700 bucks to do it, but it’s well worth it. It’s a great investment to do it.
Just go and get an agent out there.
Don’t use your personal name.
You could actually have an address and everything like that, a Wyoming address for your business. It’s a great way to do it but definitely do that.
Again, make sure that you talk to an attorney, an accountant, or CPA to set up this structure and get your final advice.
But guys, hopefully, this gives you a good idea of what an LLC and S corp is, really, truly, and for you.
Hopefully, that’s helpful.
Guys, I like you.
I love you.
Go and do something great today.