Forming an LLC

My local REIA has a class for $349 given by an attorney and at the end of the class all paperwork is filed and your LLC is ready to go. It sounds cheap enough and all the bases seem to get covered.

Then there's also LegalZoom, I think it's around the same price.

Any suggestions or recommendations?

--Eric

Edited: 06/26/2010 at 07:55AM

Rich Schroeder

Real Estate Investor · Wisconsin

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Apr 13 '09, 09:01 PM

If you feel comfortable with not using a lawyer, most states have websites where you can purchase LLC's right online. In Wisconsin it is $135 and it took me all of 5 minutes.

Thanks,
Rich

Edited: 06/26/2010 at 07:55AM

Eric Osbourne

· w. mesa, Arizona

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Apr 13 '09, 11:23 PM

It's not that I'm uncomfortable not using a lawyer, I just figured that's the best way to go about it. I just want to make sure that everything is sound and legit. So if I can accomplish this without using a lawyer, I'm down.

I never like spending extra cash if I don't need to. I'll check it out online.

thanks, Rich

Edited: 06/26/2010 at 07:55AM

Jon Holdman

Real Estate Investor · Wheat Ridge, Colorado

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Apr 13 '09, 11:40 PM

Check you secretary of state web site. Here in CO, its $50 and takes about 10 minutes. Then another 90 seconds on the IRS web site to get an EIN.

Edited: 06/26/2010 at 07:55AM

Jon Holdman, Flying Phoenix LLC

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Eric Osbourne

· w. mesa, Arizona

10 posts
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Apr 14 '09, 12:57 AM

I'm getting an LLC for a few reasons:
-to keep my rental properties and personal affairs separate
-to have the llc on the lease as a company rather than just me as an individual
-possible credit lines for useable capital
-So I can draw up a cool logo for professional looking business cards and I can feel like I'm important (just kidding about that one)

I figure if I can get one on the Sec of State website for about $50, why not? I'm no rich man, but I figure it's a good investment. I'll need one eventually, why not start now.

I do agree with you, Charles, on the fact that my state has plenty of cash. They do. I just feel kinda bad about not paying those photo radar tickets they get me with so I gotta give them cash in one form or another (kidding again).

Thanks guys.

Edited: 06/26/2010 at 07:55AM by Eric Osbourne

Will Barnard

Rehabber · Santa Clarita, California

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Apr 14 '09, 01:19 AM

Originally posted by Eric

-to keep my rental properties and personal affairs separate

Just remember Eric that the seperation from business to personal is not absolute. Basically, the LLC protects you personally from the asset, but not the asset from you personally.

Example, if a tenant falls and dies on your property, the LLC is sued and not you (unless you were proven to be negligent or the corporate veil was pireced somehow).
If you kill someone's kid while drunk driving, you and your LLC assets are on the line.

Edited: 06/26/2010 at 07:55AM

Will Barnard, Barnard Enterprises, Inc.
E-Mail: info@barnardenterprises.com
Website: http://www.barnardenterprises.com
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Alan Brymer

Real Estate Investor · Provo, Utah

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Apr 14 '09, 04:43 AM

I've gotten LLC's created with the state for about $60 or so in Utah, BUT you'll want an operating agreement to spell out all the guidelines and bylaws of who does what and how it will operate.

You may be able to find one of those on the internet. I think getting it all done, plus the chance to hammer that attorney with a long list of pre-written questions for $350 sounds like a pretty good deal.

Edited: 06/26/2010 at 07:55AM

Sheila O'Shea

Virtual Assistant · atlanta, Georgia

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Apr 14 '09, 08:41 AM

If it's a single-member LLC--just you and nobody else--I wouldn't even hassle with a lawyer, just hop to the Secretary of State website and set one up online. It's not a complicated process (unless you do something stupid like pick a name that's already been taken by another company that hasn't been gone long enough for the name to free up, but enough about me.)

If you're setting up an LLC with a partner or multiple partners, I would DEFINITELY recommend that you get a lawyer to draw up an Operating Agreement that sets out things like what percentage ownership each member has and what happens in the event of member departing. Otherwise, the state law determines these things, and you may not want that. Note that an Operating Agreement is a separate document from the Articles of Organization (or whatever the equivalent is in your state.)

I Am Not A Lawyer, I Am Only A Paralegal, This Is Not Legal Advice, Just Me And My Loudmouth Opinion, Thank You And Goodnight.

(Oh, hi, I'm new by the way.)

Edited: 06/26/2010 at 07:55AM