LLC question

23 Replies

I am wondering if I should register for my LLC via the secretary of state, myself or should I just get an attorney to do so for the filing. I eventually will have to get an real estate attorney, but couldn't I save money doing the LLC myself then meet with an attorney to do business with?

Hey Susan! If you are JUST starting off, you can get a dba, but it provides ZERO liability protection, but will save you $$ when starting out, in regards to establishing it.
Having said that, I'm a big believer of getting the LLC if you are going full steam ahead.
Do not pay an attorney to set up an LLC..you are better off driving down the road and tossing about $1k out the window..or...you can always paypal it to me... :)
Yes, just go thru your SOS to get the LLC. MAke sure the name you want is available, then get the LLC which will cost about $375 or so depending on the cost in your state.
Before you get the LLC though, do some basic research and find a company that will serve as a REgistered Agent in SC. The RA is the attorney, entity or person that will receive registered notices etc.
It may seem like a small thing, but the Managing Member of the LLC should not be the RA.
I use Lawyer's Aid Service in TX, and it costs me about $150 a year.
So, research Registered Agent services in SC., then you can contact your SOS to get the LLC.
You will be the MAnaging Member, and then you also have your RA in place as well.
Next...contact the IRS for your EIN #. Employer Identification Number.
You will need your Articles of Organization and your EIN to set up your bank account.

is it possible for a foreigner to register a LLC in the us.Or must he be a us citisen and/or live in us to do so.

In future want to do business in different countries since I find projects to invest in different countries.

Susan,

If you even need an LLC (which you most likely don't but that's another topic) you can file the articles yourself if you carefully follow the instructions from the SOS. If you are trying to save money, you don't need to pay a registered agent, you can be the RA yourself for free. You lose anonymity but not liability protection if you do so.

The savings end there. You still need to pay an attorney to draft a proper operating agreement. Don't trust "fill in the blank" boilerplate stuff.

@Susan Knight I recommend Nolo Books for do it yourself legal help. (Nolo is the brand name, easy to find on Google) They have several books on LLCs including Software to create an LLC Opperating agreement. Also John Hyre has a course /Book. The real estate investors Kiss guide to entities.

Creating an LLC is simple. Knowing how to run it properly so it doesn't get "Pierced" is the important part.

@Hans Langsholt LLCs are created by state law. Different states may have different laws in this regard. However I suspect it is not an issue in most states.

To get an LLC in Maryland, you need a "Resident Agent." This must be someone who lives in Maryland. However the Resident Agent does not have to be an owner of the company and the owners of the LLC are not in the public record.

Originally posted by Ned Carey:

Hans Langsholt LLCs are created by state law. Different states may have different laws in this regard. However I suspect it is not an issue in most states.

To get an LLC in Maryland, you need a "Resident Agent." This must be someone who lives in Maryland. However the Resident Agent does not have to be an owner of the company and the owners of the LLC are not in the public record.

I live in Norway, outside of US. What I want is to have a company sudivision that are registered in US. That also protects me as private person, like LLC. This also so partners know that it is a thrustworthy business/concept. I work through internett and thereby I am not physical in the US.

Also, can a LLC or other company type work in all US or just registered state.

@Hans Langsholt if you create a LLC in one state and want that LLC to do business in second state, you will need to "register the LLC as a foreign entity" in the second state. So, fundamentally, if you want to do business in all 50 states, you have to register will all 50 secretaries of state.

That would be true big job....

So US do not have one system for entire country, strange...

You seem very active Jon Holdman. a question:
If a investor chooses to invest in a project in foreign country. Then he needs to ensure he follows that countries laws, regulations. This will not be the project companies responsibilty to make sure investor follows US laws? As long as their following the country laws and regulatin the project are done in, the responsibility regarding investors home country is the investor responsibility should I think.

Appreciate your answer from a global point, not from inside country point.

Update:
Forming myself.. Checked out legal zoom and it would cost $377.00 with the RA included. I can save the RA fee in SC for $99.00 instead of $159.00 though LZ.
Going to do the LLC the first of the year since it would most likely end Dec 31st to avoid any taxes for the year.

Originally posted by Susan Knight:
Update:
Forming myself.. Checked out legal zoom and it would cost $377.00 with the RA included. I can save the RA fee in SC for $99.00 instead of $159.00 though LZ.
Going to do the LLC the first of the year since it would most likely end Dec 31st to avoid any taxes for the year.

I generally recommend people register for the LLC themselves (it is generally not too difficult) and most of the important stuff is what you do after you form an LLC.

I do not understand what you mean though about avoiding taxes...why would your tax situation change just because you are a member of an LLC?

In Virginia, I set up my last LLC in about 5 minutes (online) and it cost just $100. The first one was done with a simple 1-page sheet, which was filled in by pen. It will cost $50 each year to keep it active.

An LLC in South Carolina is $110.00 and no online filing, it has to be sent in. Also if after you search the site for a filing name you can apply for a name but there is no place on the form to put alternate names if yours is taken or indistinguishable from another LLC.

Susan, hi, don't get in a hurry with this. IMO Zoom is not going to save you money in the long run (maybe not initially either).

Since your original question was asking about registration, I get the impression you are new to form business entities. As Brian pointed out above the difficult part is not the filing of the entity but putting together a good and well designed Operating Agreement. You really should not use a boiler plate OA, they are not sufficient IMO and you'll end up making modifications. You may end up making modifications to a poorly established company that will always have origination issues, sometimes it's better to kill off a poorly originated company and start over!

RE can get complicated due to types of properties, financing, construction issues, different types of sales, use of partners on a single or multiple deal(s), leasing issues that you may be forced to rent out a property instead of flipping it and liability concerns.

Believe me, there is no boiler plate of the face of the earth that addresses all of these issues sufficiently, especially in taking on partners in creative situations.

I really suggest you sit down first and look to your business plan, define the scope of business to be accomplished and then investigate the various bumps in the road and strategies involved, then you can draft an OA that fits your needs rather than filing an LLC and then having tooperate within the confines established, that's just backwards. Spend a good half hour with a good business attorney, (have your plan and questions ready when you walkin), you can still do much of it yourself. :)

@Brian Burke is correct, you can of course be the registered agent of the LLC, but I don't recommend it. Doesn't hurt you, but here is my take.
First, if you are running a lawn care business with a mower in your pickup...who cares..no biggie...
BUT..if you are operating a fairly expansive lease purchase business with a partner and reps and multiple working parts and a larger and larger target on your back...I would recommend having a registered agent, other than you.
Here's why..IMHO...
The registered agent is the agent on file or contact on file should the LLC need to receive notice from a law firm or need to be sent notices such as certified mail for certain notices.
If I'm in Costa Rica for 12 days on the beach, and a firm sends me a notice and no-one is there to sign for it for 2 weeks because I'm hanging at the Ylang Ylang in Montezuma...well...with a registered agent, they can sign for it, and forward the notice to my attorney, which they have record of.
I'll give you all a true story...
YEARS ago...I got a call from my guy in Dallas saying to expect a call from this attorney that called him asking for our address...he asked what she was trying to send...she kept saying..it's an important package and I just need your address!!
He referred her to me...
so..she calls..wants our address...I mess with her and ask her who she is...who she's with etc. I finally tell her..You just need to send that to our Registered Agent..."Fine...who is that?"
"Well...it's on file with the SOS."
"OH!! So we're going to play THAT game huh?!"
Click....she hung up...
I thought..man..she must be a newbie...
I pulled up her info...yep!!! Just got hired by the law firm and was about 4 weeks out of law school...
Never got the "package"...
The point is...if you are in a business or your business is the size that you really need to utilize the LLC for why you got it in the first place, you might as well utilize a firm (not all attorneys will act as RA) or a company that serves that purpose.

I've set up LLC's online and it costs $50. It's as easy as putting on your pants. You also need to get a tax ID number from the IRS. Also an easy process and done online. I wouldn't get a lawyer for this. Make sure you have an operating agreement. You can find this online.

@John Jackson raises some good points as to why you might want to have another person (or firm) be your registered agent. This is a personal decision that every business owner has to make, and different people will choose different methods for different reasons, but I have some additional food for thought.

I'd rather act as my own registered agent in most cases. Why? Use the following example:

1. Once a lawsuit is served, you have a certain number of days to respond to the suit, and that timeline begins upon service.
2. If I hire a registered agent, and they accept service, the response clock starts ticking. If I'm on vacation in Costa Rica as in John's example, I probably won't find out about the suit until I get back, and I might eat up my entire time to respond without even realizing it. I'd rather have my day ruined when I get back!
3. If we assume that the registered agent has pre-existing instructions to deliver the service to my law firm instead of me, then #2 does not apply. However, my law firm will now begin forming some type of response (without my input if I'm on vacation) and running up my legal bill.
4. If I get served upon my return from vacation I get to read the complaint, and determine how I want to respond. I might not want this to go to my law firm. Instead, I might want it to go to my insurance carrier so that they can defend me in the lawsuit under my liability insurance policy's coverage.

In the example above, not only did I save paying for a third party to accept service for me, but I also saved the cost of my attorney preparing a legal defense that is covered by insurance. What do I gain by having a third-party registered agent? I'm not really sure...

I feel bad for attorneys, so I 'm always willing to give them money..WHEE!!!
You are right on the points, so it just depends on the overall gameplan, so not a twig to trip on, but my thought is I don't worry about it, the pieces are in place, and it just adds that one last step of "separation" if you will.

Thanks John, Bill, Rob and Brian. Yes I am weighing everything out first before I jump into an LLC and how to run it. At this point I am a Small entity at this time, and when it gets to be larger I will revamp as well. Basically starting with two rentals and then a buy and sell method is planned. Sure, I will get a lawyer as well and ponder the RA aspect. Which is why I want to so it at the start of the year. With that said I appreciate all the comments, and agree with most. I personally don't want a lawyer to be the RA, but someone close that can handle my small company in a timely manner.

@Brian Burke - I am looking into doing my own LLC paperwork and have searched some businesses here and found that the address listed is easily discoverable that you register with you LLC. I was wondering if you can use a P.O. Box? I wouldn't want my home address readily avialable for anyone to find with a simple search.

You can use the address of a "registered agent"; the UPS store and other mail services do give you a street address - but you will have to find out if that is acceptable where you plan to form. UPS store works where I am located.