I was told to get a LLC so I can use business cards to wholesale instead of getting contracts put into my name. How can I go about getting an LLC?
Go to your state’s secretary of state office and complete the necessary form.
The forms also should be available online, just google search “secretary of state (your state)” to find the website. Once at the correct state website, there should be a tab or area for business services. View all the options and pick the forms area then look for domestic business entities, limited liability company. Download the form, print out it, complete it, and mail it in with the appropriate fee.
Be sure to search the existing business names database on the secretary of state website to see if the name you want is available before you mail the forms. It will save you time because if the name is taken, the office will return your submission unable to complete.
Fees vary, it is $125 for ohio to file
Consult an attorney to see if they can do an articles of incorporation for you for a service fee. They usually have a boiler-plate document they can modify to suit your needs.
Use the charter number the state will give you to obtain an EIN (social security number for your business) and you can open a business checking account at a local bank
Consider that an LLC is usually a pass-through entity for tax purposes so the profits from the business are taxed only once, and not again when you take draw from the company personally. But be aware, your end-of-year tax filings for the LLC probably cannot be done in 5 minutes at your local HR Block office but will require the help of a business accountant.
LLC is definitely the way to go if you need to protect your personal assets.
Before you create a legal entity, ask yourself if you really need one at this time.
Have you ever wholesaled a property before? Are you sure you’re going to make money doing this?
While I am not denying that a separate entity make sense, you might be putting the cart before the horse. You certainly don’t need to have an LLC to use business cards (and the fact that this is your question leads me to believe you’re new to the business).
You can use a business name just by being a sole proprietorship, which does not include any forms or filings. You might have to file a “fictitious name filing” with the county or state, but that is about it.
If you are brand new to the business, use those dollars for marketing and don’t waste it on infrastructure.
My $0.02.
I agree if it is only for business cards but I read the post twice and say that he also wants to put the contracts in the name of a business and not personally.
PaulBroni is definitely right if you just want use business cards for contact information but you will need a business entity if you want to put the titles of properties in another name.
Ok, then I’ll ask again…what’s the big deal about putting a contract in your name personally? Hopefully you would have enough outs in a deal where there’s no real liability involved.
I am just suggesting that the decision to form a legal entity be taken more carefully that just willy-nilly filling out a form and playing “corporation.”
You have to file tax returns, open a new checking account, get an EIN, and a whole host of other “administrivia” that people don’t think about in advance.
I am only offering that, if the OP has not done a deal before, it might be better to use those administrivia dollars to get a deal under her belt before setting up a lot of infrastructure that, frankly, she may never end up needing.
I spoke with Ron LeGrand and he told me pretty much the same thing. You don’t want to use your name if you can avoid it, but worry about DOing a couple deals and getting some $ in your pocket than you can set up an entity if you need to. In other words stop making excuses and go close a deal. (anyone familiar with Ron knows what I mean)
I just finished one of his books and I know exactly what you mean
Put it in your name and you have full personal liability and it can be lost in a personal lawsuit against yourself.
Put it in your business name and you have protection from lawsuit hungry people.
example: If someone filed a law suit against “you” and wins… You can lose all of your private assets.
If your assets are tied up in your LLC, you will have protection because your LLC is a separate entity.
LLC is the way to go…and cost less than 200 bucs
Good Luck :beer
That is not totally correct. The LLC manager(s) and anyone involved with the transaction will get sued personally. Only members who do not take active participation in the business enjoy the shield. In this situation, seate5 is doing all the work and any liability of the LLC will come from his personal actions as the LLC’s agent. The LLC won’t do him any more good than a big insurance policy.
Some other things to consider:
What is the cost to maintain the LLC? It is over $500 in several states plus the cost for the registered agent.
Land trusts are a much cheaper way to get property into an entity’s name without the costs and hassles of an LLC.
Most cases settle for the insurance limits.
Most RE investors who use LLCs have the bulk of their net worth in the LLCs.
LLCs provide no protection to the assets they own.
Boiler plate operating agreements don’t work after a creditor has his judgement.
Just do the transaction and worry about this LLC stuff when you are making real money. The laws change so often you are going to have to update your plan every few years anyway. Wait until it makes senses.