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Discussion in 'Homesteading Questions' started by seedspreader, Jan 13, 2007.
Has anyone filed (without paying the extra fee to a company) your own LLC paperwork?
Yup--pm me and I'll give you the details.
Yea, its pretty easy, at least in Oklahoma. I needed an LLC when I was rebuilding transmission to pay for my schoolin. I just went to the proper state office and got a simple one page form. I think they called it an "article of incorporation". I filled it out and sent it off with a check for some small amount and they sent me back a pretty looking buisness license. The same form can be used for what ever type of buisness you want to set up. Corporation, LLC, sole proprietorship, partnership, etc..
If you are a one person LLC take note that as far as the IRS is concerned you don't get the pass through tax treatment.
Yep, I did it several years ago. It's very easy here in Oklahoma. For an extra $10 you can copyright your business name. They charge $25 a year to keep your LLC up to date. It's well worth doing. Your state office should have a packet they send out with all the forms and instructions, and it's free, at least it is here. They ask me if I wanted to run my LLC as a C corp, S corp, or as a private individual. Be sure you read up on this info so you know which way you want to register.
Yes, I've been reading up on it. I understand if you are the only member of the llc you are taxed as a sole proprietership. In order to file as anything other than "individual" you have to have an existing c corp or s corp (in other words, a corporation can be a member of a llc, which allows you the benefits of offering retirement plans and other typical fringe benefits of a standard corporation.
Bob, You can be a C corp if you want. Just name your family as your corporate officers. You can have the required meeting at the kitchen table once a year. It's not near as complicated as you'd think. You don't have to register as a sole proprietor, and that is not the best way to go for most LLC's. Find a good CPA and talk it over with him/her. It's well worth the investigating to be sure you get registered the way that will do you the most good. I've always wondered why anyone would spend the money to form a LLC and then register as a sole proprietor, that's the same as doing business in your own name, no protection at all. Depending on what type of business you will be doing you may want to register as a C corp, and possibly register 2 companies. Talk to a good CPA, they will be able to explain the details so you can make an informed decision.
Yes - I did it through my Secretary of State's web site. Took about 20 minutes. Super easy. Still had to file other papers and get a business license, but it's not that hard.
LLC's and LLP's were designed as loopholes for professionals whose regulating bodies would not allow then to be incorporated. This is usually a doctor lawyer CPA broker or consultant..What you selling?? If its a tangable product or service - then you incorporate..... only in the situation of selling your opinion would you use a limited liability shield and then only certain personal assets are protected. As a trained accountant....I would never give advice without knowing details....from my experience...I have never seen a quality job done for less than $3000, if it is less than $1000 it's basically a scam or just a notation on your sign as "inc" just so you seem more legit( it's not worth the paper it's written on as protection.... maybe worse as it attracts the attention of someone interested in litigation). If you are worried about liability see a lawyer and see if your state even honors the incoporation shield which is becoming rare.....There may be a better more sinister and effective way to shield assets thru a trust or number or lease arrangements. If taxaition is your concern a Tax professional could take on your account monthly for a very minimal fee and you would not even need a cpa.
We did for the boarding stable, done through a reputable attorney for a reasonable fee. Way worth it for us.
I have 2 LLCs. One was set up through an attorney for $800. The other one was set up through the Secretary of State's Website for $105. In my experience, the attorney did not provide any extra help or information to warrant the additional $695, but it depends on your state.
What is this and does a small business need it? I'm in the process of starting a baking business out of the home - sending in state paperwork monday and will then have the health inspector come to approve my space.
Perennial-It's a Limited Liability Corporation, and its purpose is to establish your company as an entity independent from you as an individual. That way, if you get sued, only the assets of the company and not yours (like your house) are fair game if a judgement is entered against you. An LLC is only as strong as its separation from your personal assets, so you need to have separate checking, credit, etc. for it to hold water in court. A simple single member LLC is easy to do yourself and when tax time comes, you just claim your LLC's income on a special Schedule form--it's taxed at your personal rate.
You do need an LLC to stay safe in your bakery business. Because you're producing a perishable product being sold to the (highly litigious) general public, your exposure can be high. In addition, you should consider a liability policy with the coverage meeting or exceeding your state's judgement threshold (usually 1-2 million dollars). Liability policies are usually priced according to gross sales (which is an indication of exposure), so don't freak out at the potential cost--mine costs about $500 a year with fairly substantial gross sales.
I have two LLC's, one owns several rental properties and the other owns other side businesses that I do. They both protect my personal assets if I get sued. But, they do not protect my personal assets from Gross Negligence, nothing does, not even a Corporation.
I hired a lawyer and I have a CPA as well, I consulted both of them before I decided on the LLC. The only other level of protection I could add is to have the LLC owned by a Trust instead of me, still doesn't protect a person entirely, but makes it very difficult to find out who owns what.
I paid my attorney $800 for each LLC. but anytime I have a change, such as buying out a partner from the LLC (I had one) he doesn't charge me anything for that paperwork. He also didn't charge me when I added my Drywall company that's owned by one of my LLC's. He did all that paperwork as part of the original $800 fee.
You can have partners in an LLC, at tax time your CPA would do the taxes for the LLC and provide each partner with a K-1 form which is filed with your own taxes so the LLC is taxed at your personal rate.
"...it's not worth the paper it's written on as protection.... maybe worse as it attracts the attention of someone interested in litigation)."
I agree 100%, the benefits of being a sole proprietor is that you remain low key. Say you sell someone a widget and they cut their finger taking it apart, if they bought it from Joes widgets they will probably put a band-aid on it and forget about it. If they bought it from Joes widgets INC, LLC. they will probably assume they can get a half a million out of you
But if Joe's Widgets LLC is owned by Joe's Widgets Trust they'd have a hard time trying to find out who owns the Trust. Unless it looks to be a major lawsuit many lawyers won't even take on the work required to find the owner.
Nothing protects you from you're own stupidity. So the best bet is to do what you can to mitigate any possible problems. You'll always have someone out there willing to try though.
Again, unless they can prove Gross Negligence, if you have a corporation of LLC your personal assets are protected. If that wasn't true then all the people suing IBM for the batteries that start on fire in their laptops could go after the assets of the CEO, which they can't, unless he personally knew that that could happen. Good luck on proving that.
Bob, We are a partnership LLC. This is good for us. You really need to hire a good CPA for trucking. They can tell you if you would benefit from being an LLC. They also know about the legalities of hiring on a 1099. I was telling dh about your truck. He said to check this out. We were told that you absolutely cannot legally hire a driver on a 1099. This could just be our state but we were told it was Federal rules.
Last year our lawyer cost $600, the CPA cost $$300. Between them they saved us $2400. Hire a professional NOW and get it right. It will save you movey in the long run.
In the expedite industry almost all the drivers are indpendent contractors, they have the right to refuse work, determine where the truck goes, they have financial risks (you can structure the contract so they get a % of the gross and pay the fuel), he pays his own workman's comp (or the equivalent in the insurance industry is called self-employed disability insurance), his own drug test, F.A.S.T. application, etc. A big factor is also that we don't do "regularly scheduled deliveries", meaning that the driver could (conceivably) sit out there and NOT get a load, (yes it happens occasionally, but the driver has to learn where to go and where not to go when accepting loads).
If you all ever need to hire an independent driver, (i don't know what you haul, so I can't comment on the fact of what your CPA told you.) you can check out OOIDA (Owner Operator Independent Driver Association @ http://www.ooida.com/ They go into depth on the Independent Driver aspect, if you are interested, and if y'all are O/O's it's a good organization to belong to and support anyways.
I have a CPA that I've used for years, she has been very dependable.
Thanks for the information though, I appreciate it ALL!
We have friends that are in the process of losing a trucking company in a bankruptcy proceeding. Much to their surprise, the protection provided buy their corporate status is negligible. They will exit the proceeding with a payment plan and hundreds of thousands of debt.
Cheryl, go with your accountant on the 1099 issue, unless you are willing to take a big risk. I do business with a guy who became a test case with the IRS on this issue. In the end he prevailed, it took several years of arguments and hearings, to reverse a judgement for $180K. In his case, as a large sheetrock contractor, he could not find employees that were willing to hang board for an hourly rate. The industry here is based on piece rate and 1099s. The IRS got involved when several local hanging crews hadn't bother to pay taxes for years and owed the feds hundreds of thousands. He sucessfully proved that he would be unable to do the volume of business he does with in house employees, and that most qualified potential employees refused to work for anything but piece rate and 1099s. Trucking may be similar, and 1099s may be the norm, but if the IRS decides to put you in the cross hairs, it can really get ugly. Good luck.
From what I know of LLC's which is limited is that the New Mexico LLC has no listed owner. It is what is called bearer share. This means it is the possession of whoever is holding it at the time. It's supposed from what I read to provide greater privacy and better protection from lawsuits. Basically if you're brought in to court all you have to do is pass it off to a trusted person and you can't be sued as your not officially holding it at the time of the proceeding.