Forming A Company (LLC?)

Status
Not open for further replies.
Dont take advice about legal and tax issues from people on the internet. Talk to people in your area and get a good lawyer and CPA on your team.

also, be prepared to pay these people - their advice and being able to call on them is worth it. I pay over $1500/yr for my CPA to handle my tax returns (for a few S corps and personal). But I know he is doing it right and advises me on what I need to know.
 
Last edited:


Dont take advice about legal and tax issues from people on the internet. Talk to people in your area and get a good lawyer and CPA on your team.

also, be prepared to pay these people - their advice and being able to call on them is worth it. I pay over $1500/yr for my CPA to handle my tax returns (for a few S corps and personal). But I know he is doing it right and advises me on what I need to know.
In general I'd agree, but there is value in talking to others about what they've done and why they've done it, especially if it makes you think of questions to ask your tax professional.

I've always used an accountant for my business ventures, even since high school.
 
Where in NJ are you? If you're near Morris county, can you make a CPA recommendation for a fellow high schooler?

Jason
From the Central NJ area, but I'm actually living out in St. Louis for the time being.

The accountant I use is actually located in NYC, and is in the same firm that my father's been using for his accounting for 20 years now. You can probably find someone much closer to you, and probably a little bit cheaper, as well. If you need any recommendations, contact some companies from your local chamber of commerce (town or county), and see if they can recommend anyone (or if there are any accounting firms in those).
 
For free legal advice, check if you have a local county bar association. Usually they'll have some sort of referral program where they set you up lawyer for 30-45 minutes for free for a flat $40 fee. This is generally something all the attorney's will have to participate in and usually they can't pimp themselves for business during that time and are compelled to answer all your question in the time.

I've used services like that extensively because I'm a cheap asshole. Good for tax, ip law, small claims, business structure, business tax etc etc.
 
In general I'd agree, but there is value in talking to others about what they've done and why they've done it, especially if it makes you think of questions to ask your tax professional.

Yes its helpful to hear feedback from others but I've seen so much false information posted in threads like these on business forums. Also, LLCs and S-corps are treated differently by every state. Some advice you'll see is not valid in your state because the state laws are different.
 
I know a little about this...

The laws are pretty much the same. Most state laws were enacted following a uniform code. Meaning, the Feds provided a guideline and the individual state assemblies followed suit...

Unless you plan to attract employees with stock options or retain earnings from year-to-year ALWAYS organize as an LLC. Here's why:

1. It offers all the liability protection that a corporation provides,
2. You can select what is called "your IRS tax treatment", meaning that as an LLC you actually dictate to the IRS if they will tax your company as a corporation, S-corp, a sole proprietorship, or a partnership. This is huge and here's why.

If you are what is called a single-member LLC (meaning you are the only "owner") your company will not need to file a separate tax return. All you do is fill out this form and report the income on your personal 1040 (no accountant needed). This is why single-member LLCs are often referred to as "pass-throughs", the income literally passes through the LLC and straight to you. The advantage that this offers over a corporation is that you avoid the expense of filing a separate return for your company and thereby avoid the dreaded "double taxation"...

The other advantage that an LLC has over corporation is the laws require corporate entities to hold official annual shareholder meetings (even if you're the only shareholder) and document the minutes of the meeting. Whereas with an LLC, you only need to file an annual statement. Which, in most states is a one-page form just asking you to re-verify your address (literally sign, date, and mail form to the state).

Setting up an LLC is very simple also, whereas with a corporation you have to issue stock (of course you are also taxed on the number of shares you issue by most states). Since you're on the East Coast, I would seriously consider organizing in Delaware. Since I am in the Midwest, my favorite is (believe it or not) Michigan. Since their economy is in the crapper, Michigan lacks the resources to impose stiff oversight. Hence they are very lax. Here is all you do:
1. Chose a name for your business (make sure no one else is using it already).
2. Fill-out this form
3. Fill out this form
4. Get a bank account (the patriot act requires that the address you provide the bank match the address in your articles of organization AND be a physical address-NOT a P.O. Box).
5. File a "DBA" (in MI, that is done at the state, not county level) dropping the "LLC" from your name. So if you organized as ABC, LLC, Fila DBA as ABC.

DONE. That's all there is to it.

BUT, there are also some more advanced techniques like:
1. anonymous LLC's (wouldn't only the state tax authorities knows your identity)
2. assets specific LLC's (when you organize and LLC around individual assets-this is done for many reasons)
3. multi-layer LLCs (which someone earlier described as a trust)

4. ***IBC/APT***(the mother of all entities: setting this one up will set you back 30k up front and will cost half that to maintain).

Kinda like Black Hat SEO is for the posers in this business, most attorneys will just look at you cockeyed if you bring up the above four. They will literally think "Tony Soprano" if you ask (no lie, I've had it happen more than once).

Skype me if want (username: infideleo). I'm around today.
 
I also want to address the issue that Maximus brought up. You don't have to organize your company in any given state or jurisdiction. Most LLC statutes only require that the resident agent reside within the state in which you organized (this is in the event that you're sued-the meeting or to serve you with the papers). So, so the trick is finding someone that you trust was willing to act as your "resident agent" within your selected jurisdiction...

Fortunately, there are lots (and I mean lots) of companies that do just that. Be sure to also ask if they will sign the annual statement (recall that this just requires a signature and a date).

Google them....
 
Status
Not open for further replies.