Legal Question in Business Law in New Jersey

Re: LLC for horse partnership?

The simple reply is that you should operate through a LLC or similar arrangement. The forms are available on line, but need to be processed off line. Instructions are at the State web site. You will also need a tax ID number from IRS, to be applied for after the entity is formed. Form SS-4 can be completed on line at the IRS web site. While the arrangement may be simple to start with, I strongly recommend using an attorney to assist you, as it is also suggested that some written agreement be made between the initial people to spell out the operation of the entity, and what happens if anyone is unhappy and wants to get out, dies, etc., or you want to take new people into the operation.

Re: LLC for horse partnership?

An LLC is a good approach. What you are actually entering in to is a joint venture. In addition, to forming a business entitly, you and your partners need to sit down with an attorney to draft an agreement. It should set forth each of your roles in "operating" the joint venture including decision making, capitalization, and bringing in new partners. Do it right now so you won't have problems later.

Re: LLC for horse partnership?

Yes, you need a LLC and an attorney-drafted Operating Agreement to spell out the rights and obligations of the parties. Also, you have to be very careful of the IRS "hobby loss" provisions. If your business does not show a profit, it will eventually be deemed a "hobby" for tax purposes and the loses will not be deductible.

I have more information on LLC formation and tax law at www.taxesq.com

I hope this helps!

Ron Cappuccio