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Hello All,
I am seeking information about getting an LLC. I am starting a business with my friend and we want to go the LLC route rather than sole proprietor for liability reasons.
The truth is, I know little about how to obtain an LLC. Some say "go to a lawyer" while others insist that I just fill out a few things online and save some money.
Is anyone here familiar with the LLC procedure?
Right now, I am lining up work for us. I set a minimum dollar total for work contracts that I want to get before I go ahead and borrow money for equipment, legal fees, insurance and other expenses (then i doubled the total for safe measure). After two days of searching, I am at 60% of that number. I expect to make it to 100% by the end of next week. In fact, one job might put me at 200% of my goal!
michelle
05-22-2010, 06:09 AM
Not sure about the LLC thing, but are you getting into woodworking?
are you getting into woodworking?
No, not for now. The market for high end furniture barely exists right now. I had beein cutting my prices so much that it isn't worth pursuing right now. I would also need to invest more heavily in power and hand tools to be more efficient. I still intend to do fine woodworking, but right now I am focusing on seasonal work: asphalt sealcoating.
Sealcoating is a cutthroat business. It is easy to get into, but difficult to grow beyond a specific point. I intend to model my company after one I worked for 6 years ago. If I can accomplish half of what he did, I think I will exceed all of my personal expectations.
I'm also going to have to check with the board mods for advertising. This board could be a really good place to start. Is Cryptic the one to talk to?
That_Guy
05-22-2010, 06:50 AM
You need to apply for your articalls. Also by doing this you will get an ein.
http://www.wisconsin.gov/state/byb/corporation.html.
That_Guy
05-22-2010, 06:53 AM
http://www.irs.gov/faqs/content/0,,id=199973,00.html
This should also help
That_Guy
05-22-2010, 06:54 AM
http://www.irs.gov/faqs/content/0,,id=199973,00.html
This should also help
British_Ben
05-22-2010, 08:18 AM
I'm also going to have to check with the board mods for advertising. This board could be a really good place to start. Is Cryptic the one to talk to?
Yes, Cryptic is the one to talk to.
I keep seeing commercials about this, so I'll throw it up here. I have no experience with it, however.
http://www.legalzoom.com/limited-liability-company/limited-liability-company-overview.html
flyin_blue_egg
05-22-2010, 12:56 PM
don't know much about it, but saw a commercial (yea i know not much help) for the website Ben posted....saw something at the end that their middle of the road price was like $250 and i think the highest one was closer to $300
A LLC is nothing more then a piece of paper they will light on fire in front of you in court unless your insured. Insurance depending on what field your in can be stupid expensive. It was $150ish a month for 300k liabilty a few years back for me running race cars and that probably wouldn't have payed the lawyers bills if I would have needed it.
Old Dog
05-22-2010, 08:20 PM
If you are looking to establish a LLC, you can do it through the Wisconsin Department of Financial Institutions. Their website www.wdfi.org (http://www.wdfi.org/) will walk you through the process. Years ago it cost $135 to set up a LLC, not sure what the current cost is. There is also an annual renewal fee of $25. Once completed, you have created a legal entity of a LLC. A lot of people stop here, but technically, you are also required to have an operating agreement in place for your LLC. This is where an attorney can help. The operating agreement defines ownership of the LLC, purpose for business, etc. If you develop a relationship with a lender, they will likely ask to see your operating agreement. The comment on insurance is a good one. The LLC will limit your liability to the extent of your investment in the LLC, UNLESS there are other circumstances, such as negligence, that would cause you to have a greater liability.
The lowest cost way to create a LLC is to establish the LLC online and then have an attorney put together an operating agreement for you. Your total cost will probably be $350-$400.
A LLC is nothing more then a piece of paper they will light on fire in front of you in court unless your insured. Insurance depending on what field your in can be stupid expensive. It was $150ish a month for 300k liabilty a few years back for me running race cars and that probably wouldn't have payed the lawyers bills if I would have needed it.
I am not going to treat an LLC as an alternative to getting insurance. One comment I heard was that insurance is cheaper when you have an LLC.
I don't think I will be running the same risks as race car driving. The most risky aspect of the job is the hot tar. So far, I was told that I could get 300k liability for about $500 for the year. I insisted on tool theft insurance blanket, but I am waiting to hear back about that. I'm also running a partnership, so things are probably different on many levels.
Reverend Cooper
05-22-2010, 11:30 PM
My personal suggestion having a LLC is getting with a lawyer and making sure it is done properly its even more important with a partner or two.
I'm going to the Small Business Administration later today.
WhatsADSM
05-25-2010, 09:17 AM
A LLC is nothing more then a piece of paper they will light on fire in front of you in court unless your insured. Insurance depending on what field your in can be stupid expensive. It was $150ish a month for 300k liabilty a few years back for me running race cars and that probably wouldn't have payed the lawyers bills if I would have needed it.
^^ This
Just realize that it is NOT going to protect you very well. An LLC is simply another step for someone to get through if they do intend to sue you. However anyone that really wants to, or has a decent case against you will sue you anyways and get past the LLC. So just make sure you are well insured.
Otherwise IMO in terms of getting the LLC I personally would count on spending some cash with a lawyer. Just to make sure that it is done right and you have someone looking over your shoulder.
CATNHAT
05-25-2010, 08:43 PM
I am doing the same thing right now, different industry though. I am working with my brother in law, an attorney, and he has done this before, not a big deal. PM me and I will see if he is avaliable to help you out. He will have to charge you though.
Good luck.
Update: I have my LLC!
Froehlich Asphalt is legit'!
A LLC is nothing more then a piece of paper they will light on fire in front of you in court unless your insured. Insurance depending on what field your in can be stupid expensive. It was $150ish a month for 300k liabilty a few years back for me running race cars and that probably wouldn't have payed the lawyers bills if I would have needed it.
For a 1 million liability program, it will cost me about $150/month and that includes the workers comp. I estimated payroll could be a max of $10,000. Chances are that it will be half of that. Apparently, if I kept my company as a partnership rather than jush have employees, the insurance costs 75% less. I'm thinking a low buy-in might be the answer to this issue, but I really don't know that area too well.
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