Hello my name is Jeremy, I'm new here. Classic not sure if this is the right sub forum to post this question. I'm also aware that this may be a question for a CPA. Regardless I am sure a majority of people on here are heavy equipment owners and owners of their own company. I'm also a new business owner so I am still learning, but very hungry for knowledge. I find real life experiences highly valuable which is why I wanted to ask here first. I just purchased my first machine; a Takeuchi TB240. It's brand new, Takeuchi offers 0% interest up to 60 months. I got approved for the deal, however on the application I had to go as a sole proprietor instead of a business owner. I was told that if I put my LLC on the application it wouldn't help and it may cause for non approval. The reason is because it's a brand new company with zero income. I am curious if anyone knows if I can transfer this machine into my LLC smoothly? Cheers from Washington. Great to be here. -Jeremy Kaizen-Earthworks LLC
Welcome. Great first post. I don’t have an answer, but I’m interested in what folks have to say. Post a picture of your new Tak.
Unless you have multiple owners a single owner LLC is treated the same as sole proprietor by the government. Single member limited liability companies | Internal Revenue Service Review information about the Limited Liability Company (LLC) structure and the entity classification rules related to filing as a single-member limited liability company. www.irs.gov
Saw this post while working on one of my client's tax returns and figured I'd lend a hand! I'm a CPA who specializes in working with general contractors (construction and demolition). The fact that the LLC is brand new is why it wouldn't help with the application. Usually they will ask you to personally guarantee the loan even if the LLC is the primary applicant. If they do offer that, go for it, as that will help build credit under the LLC. For tax purposes, the transfer into your LLC will be very smooth, and will operate as if you purchased it under the LLC from the get-go. (assuming Single Member LLC taxed as a sole proprietorship, S corp would vary but still very smooth) For legal/liability purposes, if it's under your name you are likely personally liable for anything that may happen as a result of operating the equipment. I'm not a lawyer, so you would need to confirm that with your business attorney.
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Welcome to the Forums! Glad to have you. As others have said a brand new LLC is a no-go as far as financing goes unless you personally guarantee the loan. You will more than likely have to sign personal guarantees for the near future in you LLC as well. Single member LLC's are treated as sole proprietors for tax purposes on the Fed level and most states as well. However liability is a different story. You may want to look at renting/leasing the machine to your LLC for liability reasons. Check with your insurance agent and accountant.