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Post Info TOPIC: Part of the business Plan.. please shoot some holes for me


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Part of the business Plan.. please shoot some holes for me
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I am in the process of getting everything in line to kick off the business.

So far I have an 18 year old that will be my roof guy.  He is a close friend of mine that I coached in football.

I do not want to deal with all the payroll and tax stuff, so this is what I plan on doing.

I will make him a 10% partner of the LLC.

He will receive 10% of the profits and I will receive 90%.

He will receive 1/8 of the bid price for the roof for his labor.

1/4 of the bid price will go to me. 

1/4 will go to chemicals and other parts/needs

1/4 will go towards the business. (minus other over will equal profit)

the other 1/8 will go to who ever "sells" the job. 


So if we do a house for $400.

If my buddy sold the house.

He will end up with $100..

I will end up with $100..

$100 will go towards chemicals and other

$100 will go into the business.


If we are both "partners"...   we both be business owners and have to file our own taxes at the end of the year correct?  I will not have to actually pay him and myself a payroll check with taxes already deducted?

Please feel free to shoot this full of holes.. that is why I am asking.  biggrin


I know some out there will ask why I dont just do the work myself and pay this guy a minimal amount to be the ground guy...   but the reason is..   Im about 6'2 340lbs..  and I have no plans on climbing any ladders anytime soon.



Also, in terms of paying solely on commision.

How is that taxed, or contracted?

If I have a couple of people who want to sell for me, and I offer them an 1/8 of the bid price for a sell..   how does that need to work?

Thanks guys..  


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Seriously bro, if you just buy quickbooks payroll and their accounting software you can wright paychecks and file taxes on it easily. That partnership stuff is for the birds.

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The commissioned salesperson is easy to pay with a 1099 filing. you should call an accountant and get set up. The sooner you do the better off you will be.

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Accuwash LLC

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a sub contractor may work then you only have to give him the 1099 the only problem is that all the equipment use to do the cleanings will have to be his or on his name otherwise you'll get in a big trouble down the road.


I heard about a company that use to pay his employees as subcontractors for more than ten years when the state found out that all the equipment used was property of the company they realized that this guys should had never be paid as subcontractors but as employees...
imaging paying taxes you did'nt pay for ten years Auch!!!!!!!! that's gotta hurt!

be carefull getting an 18 year old guy on the roof he better be responsiblle and good or you know what's gonna happen!!!!




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WDE


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I would scratch the partnership setup unless you are going 50/50 and have what's what and who does what in an agreement.



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WDE wrote:

I would scratch the partnership setup unless you are going 50/50 and have what's what and who does what in an agreement.



you right! if the other guy is gonna do all the risking work how come he is gonna get les %.

no way!!!!!!!!!!!!!!

 



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juarez1981 wrote:

a sub contractor may work then you only have to give him the 1099 the only problem is that all the equipment use to do the cleanings will have to be his or on his name otherwise you'll get in a big trouble down the road.


I heard about a company that use to pay his employees as subcontractors for more than ten years when the state found out that all the equipment used was property of the company they realized that this guys should had never be paid as subcontractors but as employees...
imaging paying taxes you did'nt pay for ten years Auch!!!!!!!! that's gotta hurt!

be carefull getting an 18 year old guy on the roof he better be responsiblle and good or you know what's gonna happen!!!!



That is the problem FED EX is having right now. They have all their drivers listed as contractors instead of employees and now they have got caught. Think UPS turned them in.lol

 



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1099 Subcontractor it the way to go, but there are some specifics you need to follow when hiring them as such. Talk to your accountant.

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I have my son set up as a 25% partner and i do most of the climbing due to I have the experience walking roofs. He is learning and is 23. He will one day be a 50/50 partner though. 10% to a kid probably right out of high school to do all the risky work is not much. I am not saying this is the case but some might percieve this as taking advantage of a kid that doesn't know any better. Also, you might want to check with your liability ins. carrier I bet there are some exclusions about an employee his age.
Just my 2 cents

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garyw wrote:

 

Think UPS turned them in.lol

 

I can guarantee that they did!




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Why give him 10% of a business you are going to grow? That’s nuts. It might sound good right now but can cause problems down the road. As an owner of the company he can plsy games with you down the road especially if you successful or should I say when you are successful.

Don’t do it!!!!!


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I was going to be partners with a guy I know....everything looked and sounded great.So many people in buisness told me don't be a partner, I am glad I listened. As you go along in a partnership noth parties thinking changes....some where one is doing more work then the other. Decissions on what gets paid and what gets purchased can get ugly. I am glad it's just me paying helpers,people need work you don't have to worry about getting some one. Stay by yourself { not counting family like Kendrick svc. } There is no better feeling then knowing the buck stops with you! Not 90% Not 75% ..........100%. Be confident in your ability to make it work with just you at the helm!

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Listen to them and do not do the partner thing. You can work it out. And young guys change their minds a lot.

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garyw wrote:

juarez1981 wrote:

a sub contractor may work then you only have to give him the 1099 the only problem is that all the equipment use to do the cleanings will have to be his or on his name otherwise you'll get in a big trouble down the road.


I heard about a company that use to pay his employees as subcontractors for more than ten years when the state found out that all the equipment used was property of the company they realized that this guys should had never be paid as subcontractors but as employees...
imaging paying taxes you did'nt pay for ten years Auch!!!!!!!! that's gotta hurt!

be carefull getting an 18 year old guy on the roof he better be responsiblle and good or you know what's gonna happen!!!!



That is the problem FED EX is having right now. They have all their drivers listed as contractors instead of employees and now they have got caught. Think UPS turned them in.lol

 




 Thats funny.



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There is a major crackdown on trying to pass employee's off as subs. The goverment wants the payroll taxes that are avoided with a 1099. There are lots of rules to meet to be a legit sub. Check with an accountant. good luck

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Pay your taxes and stop trying to find loop holes. I just don't understand why people waste so much energy on how to do wrong.

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Simply Glass wrote:

Pay your taxes and stop trying to find loop holes. I just don't understand why people waste so much energy on how to do wrong.

Preach It!!


 



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Simply Glass wrote:

Pay your taxes and stop trying to find loop holes. I just don't understand why people waste so much energy on how to do wrong.



They are just following their president's example...................did I say that outloud?

 



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If your friend is smart he will learn the trade himself and receive 100% of his own profits and not 10%.  You wont be able to keep him around at 10% once he learns this trade.  As far as 100$ if you get the job or 100$ if he gets the job sounds like an argument in the making.  50/50 if you insist on the partnership.  Good breakdown in my opinion.

30 percent of each job goes into the business account.

35 percent to you

35 percent to your partner.



-- Edited by Craig Finney on Tuesday 28th of September 2010 09:34:08 PM

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I have done partners in Kitchen exhaust cleaning and no one ends up happy. The next thing you know, your not making enough or he is not happy with the pay......

your on your way to a nice lunch after church with the family and you see someone cleaning a roof...guess who?? And they made 100%

Pay a good ground man good money! By check, legal!

It's not worth ruinning anything. Trust me.


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