Are there resources to help me set up my LLC myself? Or must I hire a lawyer or accountant?
I have a sole proprietorship now, but for liability reasons, want to go to an LLC. However, being in startup mode, I'd like to limit my expenses also by going the DIY route if possible. Resources?
Very easy to do yourself, in most states. Got to your department of state and ask for the forms and instructions for forming an LLC, they always seem happy to assist from my experience
Over the years I have found that its best to let the professionals do it, therefore below is the name of a company that will set up your corporation for approximately $400. Much cheaper than the average attorney and very efficient.
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In my experience, it makes sense to engage an accountant who understands the tax filing requirements of your state. This will only cost a small amount and will save you from big headaches in the future.
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Irrespective of the type of company you float, a lawyer and a CA are a must.In any case it is better to follow all statutory compliances ab initio.
You can do it all on your own. The best way to do that is through Legalzoom.com.
This might be helpful http://www.sba.gov/content/limited-liability-company-llc
You can do it yourself, as many people have attested to.
HOWEVER - depending on the type of business you run, it may be advisable to get a lawyer. Things like exit strategy, growth and/or partnerships, etc. all should be accounted for before you register. Going back to change corporate bi-laws (or worse, registering a new company) can be a massive pain in the butt. You also don't know what you don't know, and despite learning stuff on your own, you may not be registering yoruself the most tax-efficient and smart way. Even the state/country you register in will affect everything.
Do you know if an LLC is even the best structure for your business?
There are lawyers who can do a great job drafting your papers for you at very reasonable rates. Bootstraping is a great way to get a business going, but there's a difference between being smart with your money and being cheap.
Don't cheap out when it comes to registering your corporation. You will almost always regret it eventually.
Setting up a LLC is very simple. Go to your state's web site and look for the LLC paperwork. If your state provides a Business Center, that is ran by the state you can do everything there. I do this kind of paperwork for my clients. Since I have a corporate law back ground.It will just take a little research on your part. Plus don't forget to do the paper work for the bank when you open a account. Such as a operating agreement, articles of organization. Good luck and if you have questions you can drop me a line.
Are you also your own doctor? Plumber? DIY had it's place for those with skills but If your business has merit and liability then an attorney should be part of your team. Under $1,000 gets you a professional and if your business can't afford that then of course you can file papers yourself and do it on the cheap, but you will get what you pay for.
I'm not sure about the procedures in Washington, but in Virginia, setting up LLCs is easy and cheap. My first LLC set up off line. The Articles of Organization was a simple 1 page form that I filled out in about 5 minutes. I mailed it to the state along with $100. The second one was set up online. Again, it was $100. The renewal fees are $50, but again this is for Virginia. I know some states are expensive.
No you should not set up an LLC yourself! You should hire a lawyer or CPA who specializes in this work, though preferably an attorney.
From my experience, the cost to have an attorney set-up the LLC (including the LLC operating agreement) and review all of the LLC legal issues, vary anywhere from $800 to $2,500 depending on the complexity of the LLC and number of members.
My take is you hire someone to prepare these documents using an attorney in a review type capacity. Here is a brief explanation of the CA and Nevada state LLC rules though I do not discuss the LLC operating agreement which is also required. As I am not an attorney you should consult with an attorney when or if you file your LLC.
CA - the LLC must first qualify/register with the Secretary of State (“SOS”) by filing articles of organization (“Article") and then complete a statement of information. The Article, Form LLC-1 filing fee is $70. The Statement of Information, Form LLC-12 filing fee is $20. This form is the equivalent of an "Annual Report". CA law requires active LLCs to file a LLC-12 within 90 days after filing their articles of organization. Also, LLCs must file subsequent statements of information to renew registration every two years. The penalty for failing to file within 90 days after filing the articles of organization is $250 (which is another reason why you should not do this yourself as mistakes can be expensive).
The LLC must also appoint someone to serve as the “registered agent” or “agent for service of process”. This is a person or business in CA that agrees to be served with papers in the event of a lawsuit. The annual cost for a registered agent is about $100. If you intend to "do business as" (DBA) a name different from your LLC name, then you file a CA DBA in the county where your business is located. This will allow you to open a bank account and accept payment under the different name. If you simply want to do business as your LLC name, then the DBA would not be required.
NV – A NV LLC is established by filing state Articles with the NV SOS office together with a $75 filing fee. After filing the Articles and with the NV SOS's approval, an "initial list of managers or managing members/business license" document is issued by the NV SOS with a $325 filing fee. After the filing of these two documents, at a cost of an additional $50, a NV "Certificate of Qualification" is mailed, which is required by the CA SOS in order to do business in the state of CA. Similar to CA, the LLC must then appoint someone to serve as the “registered agent” or “agent for service of process”. This is a person or business in NV that agrees to be served with papers in the event of a lawsuit. You will also need to pay a $30 "Certification of Document fee" as NV law requires that a certified copy is kept at the LLC's registered address. Remember before transacting intrastate business in CA the LLC must first qualify/register in CA. You do this by completing a Form LLC-12, statement of information and Form LLC-5, Registering a Foreign LLC. The fees are $70 and $20, respectively.
The ramifications for failing to qualify can be severe, at least for a corporation (as I haven't yet reviewed the LLC rules on failure to qualify). As an example, a foreign corporation that fails to qualify to transact intrastate business in California may subject the corporation to a $20-per-day civil penalty, bar it from maintaining any actions in California courts based upon its intrastate business until it has qualified and pay a $250 penalty, and subject it to prosecution for a misdemeanor punishable by a fine of from $500 to$1,000. Failure to qualify may also subject persons who do business on behalf of the foreign corporation to personal liability. Employees and agents may be subject to prosecution for a misdemeanor punishable by a fine of from $50 to $600.
The initial first year state fees assuming you do business in CA and incorporate in NV is $740 ($450 + $90 + $100 + $100) not including any state CA taxes with its $800 minimum requirement.
You can File online with the Secretary of State. But it is always good to consult with a lawyer before doing so. They could help you stay away from paying extra taxes in the future.
CJ...I understand you may not want to hire or pay for a lawyer or accountant..however to many clients and/or others have set up an entity that was not appropriate for their business, short but more so long term. So, I would always recommend that you discuss your business plans (and the business plan) with your accountant - they can ensure you are setting up the right entity, then go and use a less expensive resource like Legal Zoom or another.
There are also services like LegalZoom, Rocket Lawyer and others have offer low cost incorporation services, which ensure your paperwork is in order when you file. You could also seek out a mentor at the local SCORE office that could assist you.
Setting up my LLC here is Missouri took very little time and only costed me about $50. I would just Google "setting up an LLC in [insert state]."
Then I would look for a result from your secretary of state's official website. It is a very simple process and your state website should have all the answers.