Forming A Company (LLC?)

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trigatch4

trigatch4

BuildAndEarn
Aug 23, 2006
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Now that I'm "on my own" I'm guessing it's a good idea to form a company or LLC to protect myself. Not only that but I'll be doing some consulting so I'll pretty much NEED a company under which to operate.

This weekend I'll be gathering all the research, sources, ideas, etc... needed to form a company and see what is the right move to make - posting a little guide on my blog for anyone in the same position.

So before I get started... do you have any insight, advice, links or thoughts about forming a company around your Internet Ventures and/or consulting business?
 


I've been thinking about this stuff too. On the list,first thing after the holidays ,is finding myself a good CPA. I'm hoping that person will be able to advise me more on the corporation, LLC stuff.
 
Forming a corp/LLC is great for writing things off. Having a great CPA is good thing to look into as well as they can usually save you more money than they cost you in the end. Best of luck to you
 
DomainRealty said:
In NJ, it costs $125 and can be done all electronically via the state business web site.

Jason
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Jason,

Is there anything I should be aware of when forming an NJ LLC? I'm starting the process shortly - How long did it take for everything to become "official"?

Also, what is the link to the pages detailing how to set up an LLC? Found it a week ago, but lost it, and have been trying to find it since.

Thanks!
 
Pay a local lawyer $200-300 and he'll setup everything (Paper work, notarization etc..). The only requirement from you is a signature and check.

Formed my S-Corporation back in 2005 and have had it since, even without transacting business in motion.
 
I formed my Inc. through LegalZoom and couldn't be happier. $500-$600 or so and they do ALL of the legwork. It literally took me 20 minutes to fill everything out.
 
trigatch4 said:
So before I get started... do you have any insight, advice, links or thoughts about forming a company around your Internet Ventures and/or consulting business?
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If you're gonna do this it's important to do it the right way. Definitely talk to a good CPA before doing anything. There are minor differences in entity types that can make a big difference to your business.

I'm not tax expert so be sure to go over this stuff w/ a CPA or attny, but here are my 2 cents from experience - If you're only looking for liability protection, then an LLC is fine. If you want tax benefits AND liability protection, then you should look into a Corp. I have both for different reasons.
 
I agree that legalzoom.com is great, but I didn't pay as much as $500-600. I just got the basic package. Already had my EIN so I didn't need them to fill that out for me, and I wasn't in a hurry so I didn't need the express processing/shipping. If you're not in a rush that can save you some cash, but it will take around 25-30 days to go through the process and ship your stuff to you.
 
Legalzoom.com is great for LLC and S Corps. But, if you plan on having a complicated corporate structure including a trust which actually owns the LLC, reccomended. You may need to consult an attorney. The more layers between you and getting sued protects your assets even further. Why take a chance.
 
Legalzoom.com can be good for many things including forming LLC and S corps. I would reccomend forming a trust that actually owns the LLC. It is another layer of protection, as well as being more easily willable. This can also be done through Legalzoom
 
johu said:
Jason,

Is there anything I should be aware of when forming an NJ LLC? I'm starting the process shortly - How long did it take for everything to become "official"?

Also, what is the link to the pages detailing how to set up an LLC? Found it a week ago, but lost it, and have been trying to find it since.

Thanks!
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Nothing that I can think of offhand stands out--I filed as a minor and just had to list a non-minor on the board (as a 0% shareholder :D ). It took about 15-25 days for my certificate to come in the mail, as well as my EIN papers, but you're official next business day. One thing is that you can only use a PO box WHERE THEY TELL YOU YOU CAN...I learned the hard way.

I can't recall the link, sorry :(

maximus: mind sharing the reasons? might help to relate it to my situation.
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When filing as a LLC, you get no tax benefits (aside from the filing fee being a business expense). You do get an EIN under which I personally place all my affiliate accounts, etc. etc. The tax bracket and all still apply under your individual name.

Jason
 
Hey Tri,

I set up the LLC through LegalZoom 1.5 years ago without consulting anyone. I had a site that started making decent money so I figured I needed liability protection (in hindsight, I didn't need it but I was inexperienced at the time). I created the LLC on my own and still own a few sites under that name. It really does nothing for me and if I could do it all over again, I would not have gotten it.

When I started making an income in aff marketing that was beyond my living expenses, my CPA gave me all the pros and cons of an S-Corp. (According to my CPA) there are many tax benefits if your income exceeds your liabilities. This has proved true and I'm happy with the S-Corp.

To summarize, if I could do it all over again I would skip the LLC and just have gotten an S-Crop. It offers liability protection + tax benefits.

(Keep in mind, I am not a tax expert and am only talking about my personal experience in the matter. I do highly recommend you talk to a CPA if your income is above your living expenses.)

By the way, I stopped by your blog the other day for the first time and read a few interesting things. I'll be back to read the whole thing later today.


trigatch4 said:
maximus: mind sharing the reasons? might help to relate it to my situation.
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For what it's worth, even as a sole proprietor, you can write off business expenses.

The purpose of forming a LIMITED LIABILITY corporation is to protect yourself from personal legal liability - the company itself is the entity that has legal responsibility to its debts.

Until you're making 6 figures of profit, or you're planning on hiring someone, there's really no need to establish yourself as anything but a sole prop.
 
For what it's worth, even as a sole proprietor, you can write off business expenses.
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My bad ;) It does help in an audit, from what I have heard, to have a legitimate business to write off for.

Under a LLC, THE COMPANY ITSELF IS STILL LIABLE. The LLC is just a firewall between your PERSONAL assets and COMPANY assets. Essentially, anything under your SSN is YOURS, and anything under the EIN/TIN of the LLC is COMPANY assets. Generally, of course.

Jason
 
DaveEMG said:
Until you're making 6 figures of profit, or you're planning on hiring someone, there's really no need to establish yourself as anything but a sole prop.
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I'm bringing on a partner, so I figure that a registered business structure is best to deal with partnerships.

Maximus - What are the differences in accounting fees that you paid when you were an LLC, versus S-corp. I'm going to give my accountant a call next week to talk details of each structure, but I'm trying to get an idea of what others charge.
 
Accounting fees b/w an LLC and S-Corp for me were about the same.

Other problems I ran into with the LLC is the $800 mandatory annual California registration fee. I also had a partner with my LLC and it did help with cleanly separating bank accounts and expenses. Although you have to ask yourself if it's worth the $500-600 set up fee (legalzoom) and then the minimum $800 state fee (might be free in some states like NV).

If you're going to talk to your accountant next week, be sure to get details of all the things you can via S-Crop re: the best way to pay yourself a salary, defering income, etc.


johu said:
Maximus - What are the differences in accounting fees that you paid when you were an LLC, versus S-corp. I'm going to give my accountant a call next week to talk details of each structure, but I'm trying to get an idea of what others charge.
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