Need help with licensing-BBQ

[jla678]

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]

Sounds like it benefits them..not you. IMO not a good idea.

[bizznessman]

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...s/20000831.asp
http://www.diffen.com/difference/Inc._vs_LLC

[TheBear]

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]

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]

Sounds like a bad deal which will eventually end up in court. I'd stay away from that one....

[BeaglesBBQ]

get your own L.L.C.
rely and trust no one but yourselves.

[OutlawSwine]

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]

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]

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]

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]

Originally Posted by bones64

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]

My personal rule of thumb is NO partnerships with friends, family and or co-workers.

[Teamfour]

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]

Originally Posted by jla678

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.