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    debrasue's Avatar
    debrasue Posts: 2, Reputation: 1
    New Member
     
    #1

    Jul 30, 2007, 10:18 AM
    One restaurant to two, what to do?
    I have a sole propietership business, no employees, me and my wife only. We are going to rent the kitchen of a nightclub/bar, we are also going into partnership with someone to buy current pizza shop and change over to our pizza food and name. What do I need to do license wise and tax wise. We will probably need employees, we don't have that many family members! Please help me figure this out. Thank you
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
    Computer Expert and Renaissance Man
     
    #2

    Jul 30, 2007, 10:25 AM
    Get an attorney to setup an LLC or corporation for you and your partners. You don't make clear what your sole proprietership is but I would NOT recommend going into a restaurant business without at least making it an LLC.

    As for licensing, you need to check with the local Health dept for what you may need.
    debrasue's Avatar
    debrasue Posts: 2, Reputation: 1
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    #3

    Jul 31, 2007, 03:44 PM
    Thanks for your help, we own a small pizza shop and the other businesses will be the same . Only one business will we partner.will an LLC cost more, it sounds complicated.
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
    Computer Expert and Renaissance Man
     
    #4

    Jul 31, 2007, 03:47 PM
    Would it be less complicated to lose everything when you are sued because someone burned their tongue on a too hot piece of pizza?

    Yes setting up an LLC will cost a little more, but the risks of not doing so are too great. ANYONE operating a business like yours, however small, needs an attorney and a CPA to help manage the financial and legal aspects.
    jillianleab's Avatar
    jillianleab Posts: 1,194, Reputation: 279
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    #5

    Jul 31, 2007, 04:18 PM
    The SBA will give you assistance as well. Look up your local office and give them a call.
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,305, Reputation: 7692
    Expert
     
    #6

    Jul 31, 2007, 06:08 PM
    Yes with 90 percent or so of the restaurants failing and unless you have a LLC or a corporation, you can lose everything. Your home, your life savings, the other restaurant even. So each should be set up separate for max protection.

    Of course you know you have to have health department inspection and approval before opening, have to have city license and so on.
    GlindaofOz's Avatar
    GlindaofOz Posts: 2,334, Reputation: 354
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    #7

    Jul 31, 2007, 06:46 PM
    Definitely contact your local SBA or look for other offshoots. I live in NJ and I just took a free series of classes on how to start your own business and it covered everything from how to register in your state, how to form a legal entity, marketing, insurance and all the tax stuff. Some states are tough so make sure you know everything before opening the business up.

    And everyone is right - LLC is Limited Liability Company. That means that if like ScottGem said someone burns their tongue on you pizza and sues they can only sue the LLC not the individual partners. Its worth every penny.
    conroypi's Avatar
    conroypi Posts: 11, Reputation: 1
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    #8

    Aug 2, 2007, 12:09 AM
    All of the above... great information. Another option from the LLC is the S Corp. This offers the same benefits as the C Corp without the double taxation, gives the same liability coverage as the C Corp, but my understanding is it is less expensive to create. In addition, I do not know what state you are located in, but if it is California, or a state that litigates like California, there are years and years of S Corp case law, buy the LLC is still fairly new. Previous cases are what make or break a positive outcome. But please understand this... regardless of the business entity you choose, any business or person can be sued at any time. That is why God created insurance. So make sure you get some. Good luck to you, Adina.

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