…on setting up an LLC.
I have a few questions. If anyone either has done it in the past
or is a business lawyer, please email me at
francois.modave@gmail.com
thanks
What state? If it is a single member LLC then you don’t necessarily need a lawyer to set it up. If there are multiple members it can get very complicated very fast.
If a single member, are you doing it for tax benefits? If so, think again. THe IRS has closed that loophole. Single member llc’s are now taxed as normal schedule C individuals.
i agree. for my first LLC i paid a lawyer a nice chunk to faciliate the process. for Moa i set it up myself, and it took all of 10 minutes.
francois, if you have a CPA they may be able to tell you the forms to fill out. or, go to your state’s tax website, and you may find the forms there. it’s not rocket science, basically just get the right forms, mail in your payment (my state was 125 or 150, can’t remember) and you’re on your way.
also check to to make sure the name for your LLC isn’t taken; your state’s tax/gov website should have this information available to you.
Setting up an LLC is no big deal. In Florida just go to the state’s web site a pay the $125 or whatever it is.
So, the deal is this. A friend of mine are starting a business (in TX).
He has a great idea. Limited assets. I have no clue, but I have assets :D.
So, we’re both partnering in. We will easily get a loan at a good rate together. I just want to make sure I understand what the implications are in terms of how much I could owe should things turned bad…
in the case of partnership where you are propping up the business with funds, i recommend you speak with a CPA so you can get a handle on the financials; what it means if you make money, what it means if you don’t. get the best case scenario mapped out, as well as the worst case mapped out PRIOR to registering the business.
additionally, if you’re partnering, you will need a legal contract in place so you don’t get the old fashion screw by your partner (or vise versa). Having a binding legal agreement is in both of your interests for your business relationship, given the agreement will leave little to no room for misunderstanding and provides concise guidance in moving forward in your business strategy.
so, prior to “signing up” for this business, see the CPA and the attorney, then move forward on forming/registering your limited partnership.
Good luck.
So, the deal is this. A friend of mine are starting a business (in TX).
He has a great idea. Limited assets. I have no clue, but I have assets :D.
So, we’re both partnering in. We will easily get a loan at a good rate together. I just want to make sure I understand what the implications are in terms of how much I could owe should things turned bad…
If that is the case then you do need an attorney and a detailed operating agreement.
You will probably want to throw a few bucks at speaking with an attorney.
A few questions (of many) you may want to consider:
A major purpose of creating an entity such as an LLC is found in the name – Limited Liability Co. So take a look at the potential liabilities. With respect to the loan, the bank will likely make you each personally guarantee the obligation, so no help from the entity choice. Since you have the money, the bank will get it out of you if things go south. (You will have a claim against your partner for his “share” but since he has nothing . . .) There are other entity choices available to you (LLC simply being the choice de jour), but the bank will always want to make sure it is going to get its money.
When you think out the other potential liabilities, decide how they will be best addressed and balance that cost against the cost of the entity choice. Another consideration for entity choice is how many other partners/investors do you contemplate? In the future?
How are you going to split the pie? 50-50? Is your partner going to repay some portion of your investment? What is the plan if you have a disagreement on how to get things done? What is the exit strategy?
Entrepreneurs are endlessly optimistic. Consulting with an attorney can help you plan for some common issues that always arise.
So, we’re both partnering in.
Be careful not to use the word “partner”. Each “Partner” is 100% responsible for all partnership obligations. (unless it was formed as a limited partnersip). So promise you won’t use “partner” anymore.
No worries. I’m aware of the differences between partnership, sole prop., LLC etc…I was using the word partner so simplify 
either way, did as everyone suggested. Saw a CPA…will have a meeting with an atty. etc.