All Forum Posts by: Matt Horwitz

Banks are state-regulated, so you can't open an LLC bank account in a state where the LLC was not formed (a domestic LLC) or is not registered to do business (a foreign LLC). Most banks will allow for a "cross branch opening" if they have locations in both MI and FL. These are your larger national banks.

Based on limited info, I don't think it's worth registering your MI LLC as a Foreign LLC in FL just for the bank account. You're talking a $125 filing fee, Registered Agent fee ($100-$150 per year), plus the Annual Report ($138.75 per year). Plus, FL has the one of the highest penalties for late Annual Report ($400), so you better not miss it. So if you think about it, you're paying $240-$290 per year just to have a bank account in FL... plus the mental glucose drain, which is an opportunity cost. I think it's cheaper to fly to MI and open an account. Hope that helps :)

@Barry Cooley, yes, you'll need to include the designator (ending) in your name reservation. You can also use a comma or leave it out. Up to personal preference, but both are acceptable. 

Example: "My House, LLC" or "My House LLC".

@Irina Belkofer, thanks for the kind words! It's only taken me a handful of years to be able to distill it all and simplify ;-) Alabama is among a minority of states where there are quirks on quirks on quirks, as I like to say lol. The association of probate judges has lobbied the Secretary of State quite hard... looking for that extra $50-$60 per LLCs in their county. That's the biggest quirk. 2nd would be the required name reservation. 

@Shebrelle Hunter-Green, reach out to Jeff Cohen (Jeff Cohen Attorney at Law) and/or Brian Daughdrill (Giacoma Roberts & Daughdrill LLC). Hope that helps

@Barry Cooley, here are the steps. Apologies it's a bit long... Alabama does thing a bit differently ;)

1. LLC Name. Search your desired LLC name to make sure it's unique and available to use. Here's the Alabama database search page: http://arc-sos.state.al.us/CGI/CORPNAME.MBR/INPUT. Your LLC name must end with LLC, L.L.C., or Limited Liability Company.

2. Name reservation. Alabama requires you to reserve the name before registering/forming your LLC. You can do this by mail, but it takes a few days. Online is nearly the same cost ($28) and it's an instant approval. Go here: https://www.alabamainteractive.org/sos/welcome.action > Name Reservation Menu > Name Reservation > click “Non-Subscriber” (at the bottom).

3. Registered Agent. Choose a Registered Agent for your LLC. A Registered Agent is a person or company who agrees to accept legal mail on behalf of your LLC in case your business gets sued. Your Registered Agent must have a street address in Alabama (PO Boxes are not allowed). You can list yourself, a friend, or a family member as the LLC's Registered Agent. You can also hire a professional Registered Agent (called a Commercial Registered Agent). Once you make this decision, you'll include this info in your Certificate of Formation.

4. Certificate of Formation. This can only be filed by mail. There is no online filing. Download form and complete 3 copies: http://sos.alabama.gov/sites/default/files/2017-03/sosdf-8.pdf. Send the Certificate of Formation, along with a cover letter (we've made one you can use here), Name Reservation approval, and filing fees to the probate judge's office located in the same county of your LLC. You'll need one check for $100 made payable to "Secretary of State" and one check made payable to "Probate Judge". There are 67 counties in Alabama, and probate judge fees range $50 - $65. You'll need to call your probate judge's office and ask what their "LLC recording fees" are. You can find all phone numbers here. You'll likely need a large envelope to send the following: 3 copies of Certificate of Formation, Name Reservation, 1 check for Secretary of State, and 1 check for Probate Judge. Do not mail the filing to the Secretary of State. Mail to the Probate Judge (ask for mailing address when you call). They'll record your LLC there (at the county), then forward your filing to the Secretary of State. Total turn-around/approval time will be 10-15 days.

5. LLC Operating Agreement. Sign an Operating Agreement, which states who the LLC owners (called members), how much they own, how profits are split, how taxes are paid, how the LLC is managed, and more.

6. Federal Tax ID Number (EIN). Wait for LLC approval from state, then apply for EIN with the IRS. Can all be done online in 10-15 minutes and it is free. Only available M-F, 7am-10pm. https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online

7. LLC bank account. Open an LLC checking account. Call around and shop rates. A lot of banks charge monthly maintenance fees on business accounts, but a few do not. Bring approved Certificate of Formation, Operating Agreement, EIN, and driver's license.

8. Annual Report. Unlike most states where the Annual Report is filed with the Secretary of State, in Alabama, the Annual Report is filed with the Department of Revenue. Within 2.5 months of your LLC being formed you need to file the Initial Business Privilege Tax Return (Form BPT-IN). Minimum fee is $100. Then every year (due by April 15th), you need to file the Business Privilege Tax Return (Form PPT). You have to include your federal tax return, Schedule BPT-NWI, and Form BPT-V. A minimum tax of $100 is due, but you may owe more depending on your federal taxable income and your net worth. I certainly recommend you get help from an accountant for this step as well as federal and any local taxes as well.

Hope that helps!

@Chandler Ludwick, you can take title and get financing in your own name, then later quitclaim deed the property to the LLC. I'd speak with a few attorneys in your area for details. They'll speak with you for 5-10 minutes for free by phone usually.

@Raymond O., check out my first reply. No, you don't need an ITIN in order to form an LLC (or get an EIN). You'll need the ITIN eventually, but do the LLC first, then EIN. Although EIN stands for Employer Identification Number, you do not need to be an employer. You certainly do not need to be an employee. If you're going to fly to the states, form the LLC from home in the state where you're going to invest, then open the bank account on your trip. The bank account is the part that causes a lot of friction for foreigners. Simple to knock out in person though.

Hey @Jonathan Biskie, will the property be located in Illinois? @Christopher Phillips makes a good point in not letting the LLC trip you up and prevent you from hitting the streets and looking at properties. On another note, sometimes forming the LLC gives people starting out the confidence to do just that.

@Mark Welp, I would just form another LLC in this case. No need for an existing LLCs to own this new one (at least from what I can tell). Ohio is a great state for LLCs. $99 to form, can use a PO Box for Registered Agent (a very unique quirk to OH), and no Annual Reports! Can't beat that. I'd be curious to hear what your attorney recommends as well.

Hi @Jimmy Warr, this group you mention will likely do the exact same thing that you would. An attorney would also (in terms of the Articles of Organization), except for the Operating Agreement (in most cases). TN LLCs are $300 to setup, then $300 every year. Here are the steps if it helps:

1. LLC Name. Search your desired LLC name to make sure it's unique and available to use. Here's the TN database search page: https://tnbear.tn.gov/Ecommerce/NameAvailability.aspx. LLC designator: your LLC name must end with LLC, L.L.C., or Limited, Company.

2. Registered Agent. Choose a Registered Agent for your LLC. A Registered Agent is a person or company who agrees to accept legal mail on behalf of your LLC in case your business gets sued. Your Registered Agent must have a street address in Tennessee (PO Boxes are not allowed). You can list yourself, your LLC, a friend, or a family member as the LLC's Registered Agent. You can also hire a professional Registered Agent (called a Commercial Registered Agent). Once you make this decision, you'll include this info. in step 3.

3. File Articles of Organization with the TN Secretary of State. Can be filed by mail, but quicker and easier to file online online: https://tnbear.tn.gov/NewBiz/. Filing fee is $300 (unless LLC has more than 6 members). LLCs filed online in TN are instantly approved. You'll receive a stamped and approved Articles of Organization and Acknowledgment Letter in PDF format.

4. LLC Operating Agreement. Sign an Operating Agreement, which states who the LLC owners (called members), how much they own, how profits are split, how taxes are paid, how the LLC is managed, and more.

5. Federal Tax ID Number (EIN). Wait for LLC approval from state, then apply for EIN with the IRS. Can all be done online in 10-15 minutes and it is free. Only available M-F, 7am-10pm. https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online

6. LLC bank account. Open LLC checking account. Call around and shop rates. Most banks charge monthly maintenance fees, but a few do not. Bring stamped and approved Articles of Organization, EIN, and driver's license.

7. Annual Report. This is $300 per year (unless LLC has more than 6 members). It must be paid by the 1st day of the 4th month after the end of your LLC's fiscal year. Most likely you'll use the calendar year (Jan 1 - Dec 31), so yours will be due by April 1st each year. Can be filed by mail or online, but online is easy: https://tnbear.tn.gov/Ecommerce/AnnualReportInstr.aspx. Tennessee favors digital filings. If you file online, you’ll receive a success message and be able to print out your Annual Report to save for your records.

Hope that helps!

@Vic Vega, I also agree with @Irina Belkofer. The added privacy is a HUGE plus for me. Once your name goes on public record, it's digitally "scraped" and spreads like wild fire through the internet. That drives me nuts. Plus, you're using cash (if I read that correctly). Even easier. And the comments about insurance are spot on, but why not go LLC + insurance. That's the route I prefer. You can knock out the LLC. It's not that difficult. Plus, insurance does not cover all cases where you and/or your assets are at risk.