Hello! I just bought my first rehab in Houston. I think I need to establish an LLC before I close. I was going to go through Legal Zoom but:
1) It seems to have a lot of "add-ons" that I'm not sure I need. For example, do I need to purchase "operating agreements, EIN and licenses"?
2) Are there any downsides in simply completing the form on the Secretary of State website?
Apologies for the basic questions. Any help would be much appreciated.
You don't "need" an LLC, but it does provide certain advantages for a minimal cost.
The operating agreement is what determines how the LLC is managed, dissolved, distributions, etc. If you're single member, not a lot of necessary changes. EIN is for bank accounts, tax returns, (insurance, sometimes).
If you just do the form, you can register, but it really depends on your goals and concerns.
Congrats on your new purchase! I opened my LLC for security sake, but as @Ronald Rohde mentioned...it's not necessary. I'm just planning to purchase as many of my properties as I can with the LLC versus my personal name.
Not sure if we're allowed to post links, but I started my LLC a few months ago and I simply followed the steps shown on the how to start an llc site...sounds too good to be true LOL but it worked and I did everything I needed to do to form it while being overseas. Everything on the site was simple and self-explanatory. I am a single member LLC so while I did do an operating agreement with another site (there was a trial period so I completed the form and then cancelled my membership, but may return in the future)...just for formality sake...I didn't feel it was absolutely necessary. I also went ahead and purchased my domain name for a website which is also suggested, but not mandatory. Check out the site..here's the link :
Good luck on your rehab!!
S/N...acquiring an EIN is free and recommended for formality sake, but is also helpful, for example, opening a business account/credit card for your LLC. The EIN is basically the SSN for the business and that will further help keep your business separate from your personal. Not sure what Legal zoom is charging for, but the only thing I paid for was the formation with the sec of state and the domain name for a website. :)
@Kusum Chanrai I think it is easiest for you to just open it yourself and pay the state it's $300 if you are opening it just to work this one property and don't plan on ever adding in partners or selling the entity. If you have loftier goals, I would suggest going through a firm or online site. You will need a registered agent and I believe that needs to be in the state where it is formed. You will need to hire someone for that. Since they basically don't really have to do anything, this should be a very very small annual fee.
I know it has been 9 days since you started this discussion. Do you mind updating us with what you have done in regards to this or if you are still considering options?
@Ryan Blake I am curious how the replies influenced her decision? If I were in her shoes and her budget permitted it, I would use the Legal Zoom option to simplify any future goals to expand her investment portfolio. I'll follow the thread because now I'm interested in knowing her final decision too.
@Jay S. I have used a local attorney, legal zoom, and opened myself. If I am just opening an LLC or an LLC with series LLC verbiage, I would always do it myself. There isn't much to file or record and plenty of info to walk you through it.
If I was creating a corporation, I would use a local attorney to draft the articles of incorporation.