Ask HN: LLC/S-Corp for web dev shop ownership + salaries?
We've talked to CPAs, hit up Avvo.com, and two lawyers, and remain confused.
We anticipate assets (code and products) that we want to co-own. But we also anticipate contributing different time and talents to projects. We can't predict, but we don't expect to split dev time 50/50. And we expect that one of us will bring in more business than the other.
We need a legal entity that will allow us to do this: - split ownership of assets evenly
- split decision-making evenly
- pay each person for time worked on a project, based on hours and a reasonable hourly rate
- pay commission/bonus/something for bringing in business (so if ! deliver a client and he does all work, I still get 10% of that project fee)
Can we form as an LLC, take the S-Corp election, and then pay ourselves an hourly rate (1099?) for work we do and recognize that as a cost-of-business? And then any remaining profits would be either held in the company or paid out as dividends?
Thanks.