I have an LLC, what's next?


4

I got the docs for my LLC and EIN, is there anything I should fill out or must do after setting up the LLC? The LLC is for a internet startup, offering a service free or charge, but might have ads.

LLC

asked Jan 15 '11 at 07:53
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Jason Glib
96 points

7 Answers


3

My first recommendation would be to set up a separate bank account. I have found it easier to keep track of things by having a separate business bank account away from my personal banking.

There are many other things you can do, but it really depends on what you are trying to accomplish.

answered Jan 15 '11 at 08:03
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Schwartz E
131 points
  • I almost forgot, thanks for the heads up! – Jason Glib 8 years ago

3

  1. Business Bank Account
  2. Seller Permit, in case if you are in retail (if not skip it)
  3. Make sure you file your statement of officers, or agreements with your secretary of state
  4. Get a DBA name if you need it (this is usually done locally)
  5. Get a business licsence locally (city or county level)
  6. Get a Fire Permit, if you have a commercial office
  7. Insurance, specifically workers comp
  8. Payroll - even for yourself this somethimes make sense
  9. Real Merchant Account - Because Paypal SUCKS
  10. MAKE MONEY! GET PAID! SHOOT A RAP VIDEO! AND BUY A FOUR FINGER RING!
answered Jan 16 '11 at 23:24
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Frank
2,079 points

1

Operating agreement is needed for the LLC, no matter what

answered Jan 15 '11 at 08:53
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User6492
1,747 points
  • No, the operating agreement is only needed if you need to establish terms with multiple owners. Single-member LLCs do not need operating agreements. – Henry The Hengineer 8 years ago
  • Not correct in NY- to be validly formed in NY, an operating agreement is needed. – User6492 8 years ago
  • Plus, if it's a single-member LLC without an operating agreement, the risk that the entity would be disregarded, and the owner held liable for anything, is much higher. It's very important to follow corporate formalities. An operating agreement can be even a page or two, but it's important to have one. – User6492 8 years ago
  • How does that kind of risk occur (via which kind of situations)? Even in NY, there are no enforcement mechanisms that punish the lack of an operating agreement. When there is no operating agreement (just as when there are no bylaws for a corporation), the rules default to state standards, which still limit liability, sufficient for most purposes when only one party is involved. An operating agreement, as the name implies, is partly a contract and partly a set of rules governing the entity. Contracts are between more than one individual - rules can be defaulted to state standards. – Henry The Hengineer 8 years ago
  • NY may be a very specific exception, but it'd be good to know where NY corporate law mandates the existence of an operating agreement. Knowing the default rules for liability absent the operating agreement is essential. NY also has an LLC publication requirement, but I've seen LLCs fail to meet this "requirement" without real consequence. – Henry The Hengineer 8 years ago
  • The publication requirement is different- the NY LLC Act specifically provides that an LLC's contracts are enforceable and the like without meeting the publication requirement, and the main consequence of failing to meet the publication requirement, according to the NY LLC Act, is that the LLC cannot sue in NY. See NY LLC Act s. 417 for the requirement to have an operating agreement (and the assertion that a New York LLC is not fully formed without an operating agreement is from elsewhere- I'll check), and provides that the operating agreement can contain provisions limiting liability. – User6492 8 years ago
  • Also, maintaining corporate formalities is a basic requirement of any company seeking limited liability for its owners, so even if there were no statutory requirement of having an operating agreement, it'd still be a good idea, and it can be just a page or two. Why take the risk? – User6492 8 years ago
  • Also, Google "New York LLC requires operating agreement" and plenty of other sources may be of use. The risk of not having an operating agreement would be that a creditor or other adversary could find the owner personally liable for the LLC's debts or other responsibilities, such as judgment amounts from a lawsuit. – User6492 8 years ago
  • The operating agreement varies by state. In Ohio, you have to state in the LLC application that you have an operating agreement. You can't get an LLC approved without it. – Schwartz E 8 years ago

1

Your state needs to determine the true nature of your business so that you are taxed (or not) appropriately. Depending on the US State in which you operate and in which US state you chose to incorporate, the exact procedure will vary; however, the underlying motivation in the State in which you operate is the same.

Your state wants to know whether there is a corporate structure that is required to pay tax on its profits with its investors paying tax on their profits as well, or an entity that passes its profits and losses to its Partners who will each be required to pay tax on their individual tax returns.

Each state has a time limit for your new company to make a declaration of its nature, that the company is in fact a new entity that does not need to pay back taxes from a time when it operated under a different name. It will want to know that the company is not a sole-proprietorship (or is comprised of only two partners who are married and file a joint tax return who would be equivalent to a sole-proprietorship) that should be filing profits and losses on an individual tax return.It will want to know the mix of managing and investing only partners to determine if the company is distant enough from its partners that it is a taxable entity in and of itself.
You certainly want to comply before the deadline so that you are not classified by your State as a C-Corporation. If it should, the members of your L.L.C. will be taxed twice.

The most important reason for complying with your State's rules and regulations is to show that your company's reason for existence is not a sham that was created for the purpose of hiding its partners otherwise taxable income from the tax collector.

I hope that this answer has you do one of two things to not be in violation of your State's Laws.

Choice 1: You need to call your States Department of Revenue for instructions as to what you must do to comply with your State law and for any required forms that you must complete and submit back to the state to register as a partnership or a sole-proprietorship.

Choice 2: Hire an expert on your State's corporate laws and follow the instructions you are given. That expert, whether an individual or a company can assist in preparing your paperwork for your signature so it can submit your forms to the correct Departments of your State in an expeditious way.

I would chose the second method so that I would have the protection of the experts insurance coverage in the case the expert made a mistake that could potentially be very expensive if the government decided to treat your company as a "Corporate Veil".

There are likely additional tasks that you must complete simultaneously to be in compliance with additional laws particular to your State.

I am a legal resident of Florida and my partners are residents of New York. We decided it was best for us to operate out of a specific NY County where it is easily accessible to my partners. There is a certain archaic law that that Sullivan County ( as do some other counties ) that is so absurd I would have never known had I not purchased the services of a company that specializes in Corporate Law and has experts on every US States' particular requirements for a business beginning operation. I was required by law to have both a weekly and daily newspaper to print a legal notice once per week for six weeks.

Fortunately my hired adviser gave me the name of a publisher in Sullivan County that knew exactly what, where and when to print the notices. You may need to have an application for business license, permits filed with your County and / or or State to begin operations. You will need to check with your Town concerning any zoning laws that may apply to your business. I found that it was less expensive for me to hire a company to do these detail than to do the research ad filing on my own.

For anyone to tell you exactly what your next steps are and to keep you on schedule would require more information than you would want to include in an open Q&A forum than you would care to. I can share with you what I did to be certain every thing was done correctly and quickly and be insured for $50,000 in the case errors were made in any step in the administrative processes of starting business legally. I hired the services of the an incorporation company. You can easily find it with a search engine. I found them to be very helpful and very reasonably priced. I believe that my fee for its research and preparation of documents for my specific scenario of the steps that were required after I received I received my EIN cost just under $159. It may actually have been less than that as I needed some services that had to do with internal business of the L.L.C.

If you have time, you may want recommendations from others for Companies, attorneys, or CPAs that provide these types of post L.L.C. formation services.

Good luck with your new business.

answered Dec 28 '11 at 12:37
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Steven Friedenthal
11 points

0

Make sure you have a separate bank account and don't (ever) commingle personal funds with funds of your LLC. This will also be true for any credit cards your LLC may open. In other words, you need to separate your personal funds and business funds.

Maintain records (booking, accounting) as if your LLC was a completely separate entity. Get yourself an Excel spreadsheet or QuickBooks (if the cost warrants it) to do that.

This will be helpful in case somebody sues you and tries to annul your LLC protection.

Don't forget to file required state forms. In the state where I live, the state requires filing of a form every two years. This is to make sure your LLC is not dissolved administratively.

There are other items mentioned in other posts which may also be done, like licenses, etc.

answered Jan 2 '12 at 09:20
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Vasiliy
323 points

0

Depending where you are, you may need a business license in the city. At least if you want to be fully legally compliant.

answered Jan 15 '11 at 08:17
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Centurion Games
626 points

0

Be sure to fill out any tax forms for your state. Here in oklahoma you have to register with oklahoma tax commission too, they want there share of my money too.

Also setup a budget, I use excel for now, and be sure to mark down all expenses in it. From food and miles driven to things bought for the company. My CPA was telling me that in some cases the difference, to the IRS, between a hobby and a business is a budget and list of expenses, plus its just good practice.

I would also recommend setting up a basic website under your llc name, with and without llc, that way people can be sure you are one in the same. If nothing else setup 301 redirects to where you want it to go so people can find you on at least a quick landing page.

answered Jan 15 '11 at 11:19
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Percent20
322 points

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