Follow my progress at starting my first mini-business.
Wednesday, June 17, 2009
Out getting documents signed
As you read this I will be on the train heading into the city to get some business completed. I have to get signatures on the LLC from my 2% partner. Unless she flakes on me, I will spend a few hours trying to get a friend to help me with a logo and some type of catch phrase if possible. The nice thing is I have my wireless broadband card so I can use the internet on the train but its not always the easiest to concentrate on creating comments on here. I also have to spend some time reviewing the documents again so I can explain them to my partner. After that I head back that night and back to routine.
I got my documents from MyLLC today in the mail. I have to get the member to sign which I am doing next week and fill out some paperwork that needs a wet signature. So there is a one time $125 fee for listing the members. There is also $100 dollar for out of state business licence.
I need to change some small materials in the operating agreement that will essentially give me tighter control. The one thing that bugs me is they tell me its a sample operating agreement. I thought the purpose of hiring someone is to have someone create a document that complies with the state laws.
edit: MyLLC is changing the cover page on the operating agreement since it is a usable and robust operating agreement.
I also have to set up a business banking account next week and capitalize the business. I will probably start with $1,000 dollars and if I have to input more I will. I might try and create loans to the business till it is up and running. I haven't decided yet. MyLLC has done quite well so far and will keep you informed.
If you need to set up an LLC here is a link. Yes I get a referral fee but I am trying to be as honest with my experience as possible.
I got a call from MyLLC and they have notified me that they got the paper work back from the Secretary of State and are fedexing the paperwork to me. I also received my EIN already. Great great great work so far. Super fast!
I realized I was talking about a lot of things that I wasn’t sure if my readers understood. Let me walk through some of the filings and the explanation of why I filed what I filed:
LLC
A Limited Liability Company provides shelters your personal assets from those owned or controlled by the business. It also offers some anonymity when you are doing business online. I chose Nevada for its strong privacy, no state income tax and fairly pro-business environment. Besides, my next trip to Vegas, maybe I can write off. In addition I am not running a store front but a virtual business so filing one in my home domicile was not required.
Other structures include the typical Corporation, a Sub-Chapter S corporation, Partnerships and sole proprietors. You will have to do the research yourself on the various reasons you might want one but given that mine is a single product, low overhead that I feel I can run myself, and would never need funding, I think the LLC is a good fit for me.
Registered Agent
A registered agent is a company that will take any type of legal service on your behalf. This included any type of lawsuits or subpoenas, as well as documents from the state, such as filing and tax documents. They also remind you of compliance issues and filing dates. It is important to note, if you do not live in the state you are filing in, you will need a registered agent anyway.
EIN/TIN
This is an employer identification number or also known as a tax identification number. It is like a social security number for your company. You need it to open bank accounts, registered with the local taxing authorities, and if you hire employees to pay excise and employment taxes. Even if I didn’t have an LLC, and was a sole proprietor, I would still get once just to keep my SSN off a bunch of public documents.
DBA
Doing Business As. This is a document you file with the state to identify the name of your business. It is also called a fictitious business name in some states. A DBA has several purposes. Once, it allows you to have multiple businesses under one corporate structure:
It also allows you to receive payment into a single bank account under multiple names. Your bank will most likely require it to open a business banking account. It even allows you to make letter head and business cards.
Operating Agreement
This is filed with your LLC to explain how the company will work. I have not received mine yet but will most likely make a few minor changes if I do not like the indemnification provisions. The operating agreement could even include things like ownership changes, splitting of profits and even little things like, year end.
Certificate of good standing
I know little about these. I just know I didn’t need one. Certain states require it but since mine didn’t. If you have a store front and an LLC in your state, just make sure you don’t need one. Unfiled
There are more documents I need to file, I am just not sure yet. Some of these will be sales tax documents with the states I will accept sales tax in. Others will be a listing of the members and any tax documents I need to think of. I will update you as I figure out which ones they are.
Disclaimer
I am not a lawyer by any means. I am just a small business person sharing my experience. Part of the reason I used the service was, not only for speed, but to make sure things are filed correctly. My whole filing including all the items I listed above was less than 400 dollars, all in. This included the filings as well as state fees and even shipping (pure profit by the way). Don’t let fear of the unknown hold you back.
Moving right along. Not an hour after my order, I received the filled out form for my approval to go to the Secretary of State. They did a search to make sure the name was available, which it looks like it was, got the signature from the registered agent acting on my behalf and said it would be approved with in a week to ten days. There was one mistake on the application which most likely was my fault when I filled the data in on the online form. So far quite pleased with myllc. If you need to set up yours, go ahead and click below:
Many of you might ask why I need a registered agent. Several reasons, because my business will be virtual, I set it up outside my home state so I need someone to take any type of service. Second, even if it was in my home state, I like the privacy of not having my address listed, and I like knowing there is someone to take service between 9 and 5 as required by law.
Finally, after dragging my feet, I got the process started for creating my legal entity. I went with a Nevada based LLC. Since it will be a virtual business, i.e. no store front, I decided on Nevada which had strong privacy and no tax liability outside of sales tax. I looked at a lot of different services including legal zoom, incorporatefast.com, intuit and myllc. I chose MyLLC and I can not be happier so far. The woman who started the company also wrote LLC for Dummies, so there is at least some literature pointing towards expertise.
I got onto their live chat and was lucky to connect with Nicole who is their operations manager. She walked me through the entire process, what I needed, what I didn't need and to make it even better, gave me a coupon code at the end that essentially waved the filing fee.
As the process continues I will keep you updated and let you know any snafus. If it does as well as it has so far I will be quite pleased. If any of you need to start an LLC, here is a link:
