[BIGINJAPAN]

(09-12-2012 05:24 PM)WestCoast Wrote:  

You mind elaborating o shadow corps? Your description below is the numbers I was running. Not trying to buy a small thing this is a larger move, all cash, no bank loans, established track.

(09-12-2012 05:20 PM)BIGINJAPAN Wrote:  

Bars can make alot of money. Usually you can make your original cash investment back in 3 to 6 months.

As finance guy though it is near impossible to get a loan to buy or start a bar. You have to use seed money from your savings and from family and friends. Once you get going and it is successful be sure to get an operating line of credit and things like that. Do not ever put your savings, house, other assests as collateral. Use the future earnings and equipment if you have to. Do this during the good times and not wait for bad times to have back up credit. Way harder to get approved if the bar is already failing.

Also keep a double set of books from the start. One for you and for the bank.

El mechanico has got it right, shadow corps will save your ass

Well I can only talk about what works in Canada. The laws are fairly similar but they aren't all the same. There are various structures to use, it all depends on if you have partners or going about it on your own.

Sounds like you are going it alone so what I would do is start a holding company that you own outright. Meaning you are 100 percent shareholder. Then start a second company in which the holding company owns all shares. This accomplishes 2 things, it keeps you personally off the hook for any problems and also the tax implications should be a lot lower as corporate income tax is generally lower than personal income. As for the exact structure I am guessing a limited company is the way to go but also maybe a LLC. Very important to talk to a tax lawyer or accountant. I am certain it varies from state to state.

Now in Canada we have a little loophole that exempts all capital gains on a company under $1.5 million. So with my companies I make sure I own 5% in my personal name. Now that exposes me to loses if I ever got married and then divorced or if I got sued for something else. But only 5%, so it is worth the risk. So the benefit is if I ever sell a company I get up to $1.5 million in tax free profit. So be sure to talk about that as well. Also income derived from a company is another tax issue. Dividends are usually taxed at a way lower rate and usually the best way to pay yourself. One other greasy thing I do is write up fake loans from my company to myself personally so I don't have to ever pay taxes. Then just declare default on the loan and whip it off the books down the line.

In any event structure everything first otherwise it is a headache to do it properly after and costs way more. Not only from a liability standpoint but a tax standpoint as well. Especially in AmeriKa, where I see daily they send the SWAT team after people who owe 4 cents.