PDA

View Full Version : Need help with licensing-BBQ


jla678
08-14-2012, 07:15 PM
I have not had much luck searching the internet for some answers to my questions so I thought I would try here. My husband and I purchased a BBQ pit to open a mobile vending business. We are looking to do Festivals, farmers markets and then any private events we may acquire. We live in the stat of Florida and have got all the applications to get our Mobile food dispensing vehicle license. Here is the catch- some guys that my husband works with recently purchased a hot dog cart and have been very persistent that he joins their corporation. He finally gave in and has since been listed under their corporation and documented with the state of FL. I have felt very uneasy about this since the first talk of it. I was finally able to get a meeting with one of the guys in the corporation and asked how it benefited them by us joining their corp. his answer was because they would split the profit between the 4 guys listed on the corporation once all start up fees have been paid back to each respected party. I clarified with him that this meant, if my husband and I were doing an event with the BBQ and they were not present, they would still get 3/4 of the profit (split between them). This was the case and something I was really not ok with. I told him that I felt like they needed to be separate and if someone from his team was helping us with our BBQ event, they would get paid out accordingly. He later called me back and said he agreed and "was not thinking outside the box" I thought this would have been common sense.
OK-my question is- Is it a good idea to continue with THIER Corporation or continue as a sole proprietor and be in change our OWN business? Any pros and cons to this?
PLEASE help me understand what we may be getting ourselves into and I appreciate all feedback.

expatpig
08-14-2012, 07:25 PM
Sounds like it benefits them..not you. IMO not a good idea.

bizznessman
08-14-2012, 07:45 PM
It would all depend on what the formation papers of the corporation state. Those papers will spell out the operations of the corporation and how all aspects are handled. The bylaws (sometimes an Operating Agreement is used but this is normally an LLC item) should spell out all binding items for the people involved.

In a corporation all earnings are corporate earnings and there are rules restricting how those earnings can be distributed to officers, etc. The LLC is sort of like a partnership with some corporate liability protections and earnings flow through to each member according to the Operating Agreement.

Our business exists within an LLC. The Limited Liability Company organization allows for limited liability exposure and allows the members to flow the profits through to each member at individual tax rates thereby escaping the much higher corporate tax rates.

I can not advise you on which would be best but I can say that Incorporation is normally used by large entities and LLC's are normally used by small businesses. I can say that if it were me I would research the LLC route. This link would be a good start: http://smallbusiness.costhelper.com/llc.html Contacting your Secretary of State will give you a more accurate idea of the cost. Our cost, in KS, was around $1K.

These links may help you to decide which would be best for your business.
http://www.bankrate.com/brm/news/biz/Biz_ops/20000831.asp
http://www.diffen.com/difference/Inc._vs_LLC

TheBear
08-14-2012, 07:51 PM
Might be worth talking to an accountant and a lawyer to get a better understanding of it all. On the surface it sounds suspect. But I'm not familiar with doing business in Florida.

Above all. Trust your gut!

BBQ BJ
08-15-2012, 05:09 AM
I would absolutely not proceed further without consulting an accountant or lawyer on this. I don't know Fla law but I do know that if you get into a deal like this and sign papers it can get sticky.

daninnewjersey
08-15-2012, 06:12 AM
Sounds like a bad deal which will eventually end up in court. I'd stay away from that one....

BeaglesBBQ
08-15-2012, 10:35 AM
get your own L.L.C.
rely and trust no one but yourselves.

OutlawSwine
08-15-2012, 12:27 PM
Sounds like you are uneasy about it. That is a clear sign to steer away from this situation and go with your own LLC.

mr dirts bbq
08-15-2012, 01:59 PM
i would run, if you are unclear about it and they really seem to be trying to take advantage of you and your hubby, but like the others said consult and attorney and an accountant about this im from ny i have no idea how Florida runs thing like this

Bamabuzzard
08-15-2012, 02:57 PM
Just from the information you provided I don't see what "their corporation" brings to the table with regard to revenue or clientale. Be very careful before signing your name to anything.

bones64
08-15-2012, 09:19 PM
The only ship that won't sail is a partnership! If you can go it alone why share your profits? Bad idea just sayin. Good luck.

Bamabuzzard
08-15-2012, 10:12 PM
The only ship that won't sail is a partnership! If you can go it alone why share your profits? Bad idea just sayin. Good luck.

I have to disagree. It depends on what the partner's can do as one that they couldn't accomplish on their own. You have many businesses that wouldn't of had a snowballs chance to survive if it hadn't been for some form of a partnership with another. Not all partnerships are bad.

FltEng
08-30-2012, 02:58 PM
My personal rule of thumb is NO partnerships with friends, family and or co-workers.

Teamfour
08-30-2012, 03:11 PM
Personally, part of the fun of the endeavor you are beginning is running your own business. You will have enough to worry about without having to adhere to corporate agreements and the such. Form your own LLC, get your feet wet, and have fun running your own show. If you are really successful, then you can demand some bucks if the corporation wants to bring you in under their umbrella at a later date.

TailGateJoecom
09-05-2012, 01:15 AM
I have not had much luck searching the internet for some answers to my questions so I thought I would try here. My husband and I purchased a BBQ pit to open a mobile vending business. We are looking to do Festivals, farmers markets and then any private events we may acquire. We live in the stat of Florida and have got all the applications to get our Mobile food dispensing vehicle license. Here is the catch- some guys that my husband works with recently purchased a hot dog cart and have been very persistent that he joins their corporation. He finally gave in and has since been listed under their corporation and documented with the state of FL. I have felt very uneasy about this since the first talk of it. I was finally able to get a meeting with one of the guys in the corporation and asked how it benefited them by us joining their corp. his answer was because they would split the profit between the 4 guys listed on the corporation once all start up fees have been paid back to each respected party. I clarified with him that this meant, if my husband and I were doing an event with the BBQ and they were not present, they would still get 3/4 of the profit (split between them). This was the case and something I was really not ok with. I told him that I felt like they needed to be separate and if someone from his team was helping us with our BBQ event, they would get paid out accordingly. He later called me back and said he agreed and "was not thinking outside the box" I thought this would have been common sense.
OK-my question is- Is it a good idea to continue with THIER Corporation or continue as a sole proprietor and be in change our OWN business? Any pros and cons to this?
PLEASE help me understand what we may be getting ourselves into and I appreciate all feedback.

Forget what the benefit to THEM is, ask yourself what the benefit to YOU is. I can't think of any. In fact, this sounds like a crazy idea, no disrespect. By enjoining yourself with them in a corporation, you are exposing yourself to any liability that you can not control. Say that hot dog cart comes loose heading down 95 and takes out a few cars and kills someone, you and your husband's business and livelihood are now liable as part of the corporation.

Also, the split sounds funny, so you and your husband will work on your cart and get 25%, (meaning you are free help) while there are 3 other guys splitting time on only 1 hot dog cart each getting 25%? Is that how it is gonna work?

Another thing, there are 4 people each equal, but without a doubt there will not be an equal distribution of work. Someone will be lazy, and someone will be the easy going hard worker who will get used, it is just human nature.

wyocurt
09-05-2012, 02:42 AM
Sounds as if you are helping them more than them you. My asvice is to run the other way on this deal. I have tried bussiness with friends, family, and others andfind that my only true partner is my wife. RUN AND DON'T LOOK BACK.

landarc
09-05-2012, 02:22 PM
As a person who was in a small corporation for years, and I still view it as a positive, here is how I see it.

1. We each had different skill sets, and those sets complemented each of us. One of us was older and had a great deal of management experience, I was better with technology and money, the third guy was a marketing whiz. Between the three of us, we were stronger as a group than individuals.

2. Three people can simply do more work than one or two. Yes, you would be splitting with them, but, they would be splitting with you as well. You seem to be under the assumption that you are most certainly going to be flowing the bulk of the profit. Are you sure of this? Hot dog carts can be amazingly profitable.

3. If there are 5 of you, and either you or your husband cannot work, or you get a vend that is much larger than two can handle, the other partners are available and have a vested interest to assist you. This can be a real asset.

4. LLC's are a great option, and for a food business, they are even better. But, a corporation that is making money can be truly a asset to you as well. Only an attorney familiar with your exact situation can advise you. Mine suggested that the C-corp was the way to go, but, we were not doing food.

Now, the negative side, a corporation is very much like a marriage, except that there are usually more than two people. You must trust your partners, and you clearly do not. Either you need to do more discovery, or you already know you cannot trust them, that is a recipe for disaster. I trusted my partners back then, I trust them now, and I do mean, that I can hand them my check book with trust that they will not do me wrong.

HBMTN
09-05-2012, 10:29 PM
Mine set up an S Corp for me $1000 and no partners. I will admit that it would be nice to have a partner sometimes, but I can not see it being profitable under my current situation if partners were getting a hand out.

Under your situation if your partners wanted a take of your barbecue gig then you and your husband should be paid as employees for your time working the event and then any profit made at the event is split between partners. By the time the 2 of you get paid $10 an hour each for ordering food, making all arrangements, prepping, cooking and clean up your partners will have to go to the bank and get a loan just to make payroll LOL