How can I find the best (and economical) online service for setting up an LLC?
Thanks :mrgreen:
Dretke,
Let me start with the disclaimer.
I’m not an attorney and I would advise anyone setting up entities to seek out competent legal advice as well as competent tax advice. The two go hand in hand.
I’ve been told you can get a copy of the “Articles Of Organization” for LLC’s at the Secretary of State website. www.sos.state.tx.us :deal
You also need to have some “regulations” for your LLC, and I doubt you can get those for free. The regulations set out the rules of operation for the members. They also discuss what happens in the event the members don’t get along. :argue
You might try www.nolo.com for those. They might have a software package or something. I have never used this site either.
Then you have to pay the SOS a filing fee. I believe it’s $200.
Keep in mind that these “free” forms are going to be very generic. The old adage, “you get what you pay for” comes to mind here.
Hope this helps.
Stacy
I signed up for my LLC through Legalzoom.com I have not yet received the final documents but am currently in the process of letting them do everything. I also considered icorp.com but decided legal zoom was best for me.
Kristi
Are you a single member LLC? I’m really waivering on what to do. I currently own 1 property but I want more. I also have a beeswax candle making business that I’m working on with a partner. Does anyone know if I formed an LLC if I could have my REI and my candle company under it? Is it really necessary? Right now I just have a general partnership with the candles.
I am a single member LLC. When you set it up you have to state the purpose of your business and develop bylaws. I would think this would make it hard to do two businesses under one LLC but I don’t really know. I think an LLC or something like it is necessary for personal liability protection from all of the advice that I’ve gotten. Especially is you’re going to be having multiple properties and doing more business as an REI.
Kristi Shappee
Home Solutions
Dretke,
You’ve got a lot to think about before going forward.
Yes, it is possible to have your candle business and REI business under one LLC. It all depends on how you write your Articles Of Organization. If you did that then you’d be a two member LLC because of your candle partner. However, your candle partner would also have an interest in all your RE investments. Is that what you want?
Some questions to ask yourself are:
- what are your long term plans for the candle business?
- what are your long term plans for your REI business?
- do you want your candle partner involved in your RE business?
- does he/she even want to be involved in RE?
Some additional things to consider is the profit potential of your candle business. If an LLC makes over $150,000 per year then it pays an additional franchise tax. So an LLC may not even be appropriate for your candle business.
Also, single member LLC’s are taxed as a sole proprietorship, by default, unless they choose to be taxed as a corporation. An LLC with 2 or more members is taxed, by default, as a partnership unless it chooses to be taxed as a corporation.
As I alluded to in my first post, the cheapest route does not equal the best route. From the little I know of your circumstances, I doubt that you will get the level of service you need from an online form preparation company.
Again, I’m not an attorney or accountant and would advise you to seek out professional advice. Just trying to help clear some things up.
Hope this helps.
Stacy
Thanks Stacy. You answered my questions. Actually my partner has no interest in REI. We get along great but she doesn’t want anything to do with my real estate business. I’ve even tried to get her to go with me to my REI meetings . I really hadn’t considered an LLC until recently ( I only own 1 property). I didn’t know if an LLC could serve as an “umbrella” so to speak. I guess I’ll just keep things the way they are for now. :thumbsup
There is a software program at Office Max or Office Depot that is called the Corporate Secretary. Great program.
Bill Bronchick also has about the best program I have seen on Corporate Structures. You might check to see if Tim has the materials here.
I have use that program to set up myself.
Terry
I set my LLC up online and it took two hours. I received a .pdf file of the acceptance letter, etc.
On the form, there is an area to place additional articles or sections to your LLC. I used an LLC agreement we have here at my accounting firm and copied the sections (they’re pretty much standard language) that covered capital contributions, distributions, profit/loss sharing ratios, death of a partner, withdrawals, etc.
One thing to note is that single member LLCs are disregarded entities for Federal Tax purposes. The LLC income is reported on your Schedule C on your 1040. So, if you’re setting up one for yourself and no other partners, the online LLC with the SOS is the way to go. Just remember that Texas is a community property state and that wives will own 50% of your interests potentially. But this will happen anyway, regardless of additional partners, etc.
I used business filings from the amex card to set up my LLC as well as two corporations, they are not pricy and did a good job.
justin,
Generally a true statement. However, a single member LLC can elect to be treated as a corporation. Unless the LLC is organized as a C-Corp, the LLC is a pass through entity regardless of the number of members.