Business Entity Selection Guide

Summary

The user is seeking advice on choosing the right business entity for a truck parking lot business in Texas and setting up a trust for asset protection and estate planning. The discussion covers LLC formation, conversion from Inc to LLC, managing multiple businesses, and the benefits of keeping businesses separate for liability purposes. The user is also advised on the types of trusts available and their purposes. The conversation also touches on the potential risks associated with the parking and storage lot business and the importance of having adequate insurance coverage.

Full Conversation

Business entity and Setting up a trust
What type of business entity are you considering and what is the purpose of the trust you wish to set up?
Not sure which is best for my business or how to set it up...the trust is to secure my personal assets
What is the nature of your business and in which state are you planning to set it up? This will help in determining the best business entity for you.
Truck parking lot. Texas
What is the estimated value of your personal assets you wish to secure in the trust?

For Texas:
- LLCs provide liability protection.
- Trusts can protect personal assets.
- Contact Texas Secretary of State for business setup: (*) *-*.
How do I ensure the LLC is set up correctly
To ensure your LLC is set up correctly, you should:

- Choose a unique name for your LLC
- File the Certificate of Formation with the Texas Secretary of State
- Create an Operating Agreement
- Obtain an EIN from the IRS.
I inadvertently set up a inc....is it best to convert it to LLC or keep the inc
What is the nature of your incorporated business and why are you considering converting it to an LLC?
It's the same trucking company..which is best for me inc or LLC
What are your main concerns - liability protection, tax benefits, or flexibility in management? This will help determine whether an Inc or LLC is better for you.
tax benefits and liability..really all of them
What is the size of your business in terms of revenue and number of employees? This will help determine the best entity type for tax benefits and liability protection.
It's a new venture it's just me. In the future I might have *-* employees or *
What is your estimated annual revenue? This will help determine the best entity type for tax purposes.
Estimated revenue. *-150k
Based on your revenue and concerns, an LLC might be more suitable. It offers flexibility, liability protection, and potential tax benefits. For conversion, consult with a Texas business attorney.
Ok so am LLC...I have other business that I operated in the past that are seasonal..I think it's a inc....when u have multi business' is it best to keep them separate or make subsidiaries before starting a trust
What is the nature of your seasonal businesses and how are they related to your main business?
It's provides office furniture to the federal government. They are only related by my ownership and the trucks are stored on this lot
What is the estimated annual revenue of your seasonal business? For Texas, it's generally advisable to keep businesses separate for liability purposes. Contact Texas Secretary of State for more details: (*) *-*.
Should they both be combined under one trust account...or will there be multiple trust accounts? $40k
What is the purpose of the trust account(s)? Is it for asset protection, estate planning, or some other reason?
Asset protection and estate planning
What type of assets are you planning to include in the trust for asset protection and estate planning?
Assets from both businesses
What is the estimated value of the assets from both businesses that you plan to include in the trust?
Trucks - $50k
What type of trust are you considering for your asset protection and estate planning?
What are the types of trust?
There are several types of trusts, including:

- Revocable Trusts
- Irrevocable Trusts
- Asset Protection Trusts
- Charitable Trusts
- Special Needs Trusts
- Spendthrift Trusts
- Tax By-Pass Trusts
- Family Trusts.
Trust for business
What is the main purpose of the business trust you are considering? Is it for asset protection, tax benefits, or some other reason?
Asset protection, tax benefits ,estate planning
What is the estimated value of your estate that you plan to include in the trust for estate planning?
The business continuously make revenue, the tangible assets are roughly $80k..
What type of assets are included in the $80k of tangible assets?
* wheeler trucks
What is the estimated value of each * wheeler truck?
* wheeler trck-$80k, land 750k
What is the location of the land you mentioned?
Humble ,Texas
What is the size of the land in Humble, Texas?
* acres
What is the purpose of the land in Humble, Texas? Is it for business or personal use?
Business parking and Storage lot
What are the zoning regulations for the land in Humble, Texas?
Unrestricted
What is the current market value of the land in Humble, Texas?
750k
What is your plan for the land in the future?
Business. Parking and Storage lot
What are the potential risks or liabilities associated with the parking and storage lot business?
?
Potential risks could include property damage, theft, or accidents on the premises. It's important to have adequate insurance coverage to mitigate these risks.
All the above
What type of insurance coverage do you currently have for your business?
GL
What does your General Liability (GL) insurance cover?
General
What is the coverage limit of your General Liability insurance?
$500k
What are the terms of your General Liability insurance policy?