Can anyone provide your input on LLC via online services vs Attorneys

[yourreviewer]

Hello,
I am looking to incorporate (LLC) for an ebook that I plan to release soon.

1. I have been told that it is a waste of money to incorporate if you are not making much money or if you are releasing your first product. Is this good advise?

2. Some have recommended incorporation via services like Zoom while some have advised against such services and have recommended consulting an attorney. Can anyone recommend any attorney with a reasonable cost?

Thanks

[MichaelHiles]

Whoever told you that it was a waste of money to incorporate if you aren't making money needs to stop giving advice and to dig ditches or something. They've obviously never been sued as a business in court.

Incorporation provides this little thing called PROTECTION OF ASSETS. If you are incorporated, do something stupid, get sued to the moon and lose, your personal assets aren't automatically forfeited. The only thing at risk is the assets of the corporation. There is a way to "pierce the corporate veil" but it requires some serious efforts in the court to do so, and not generally for negligence or basic liability purposes.

You should be able to find a local attorney in most US states to set up an LLC or Incorporate for you for around $500, which seems to be the standard rate across the board for a no-frills sort of setup.

There is a piece of software called LLC Maker that will generate the filing documents necessary for each state for an LLC filing. An LLC is very different than a corp, so if you're not familiar, seek the advice of an attorney.

[yourreviewer]

Originally Posted by MichaelHiles

Whoever told you that it was a waste of money to incorporate if you aren't making money needs to stop giving advice and to dig ditches or something. They've obviously never been sued as a business in court.

Incorporation provides this little thing called PROTECTION OF ASSETS. If you are incorporated, do something stupid, get sued to the moon and lose, your personal assets aren't automatically forfeited. The only thing at risk is the assets of the corporation. There is a way to "pierce the corporate veil" but it requires some serious efforts in the court to do so, and not generally for negligence or basic liability purposes.

You should be able to find a local attorney in most US states to set up an LLC or Incorporate for you for around $500, which seems to be the standard rate across the board for a no-frills sort of setup.

There is a piece of software called LLC Maker that will generate the filing documents necessary for each state for an LLC filing. An LLC is very different than a corp, so if you're not familiar, seek the advice of an attorney.

Thanks for the advise buddy. Do you use any attorneys for your business? If so can you recommend one?

[hamerz]

Hey Guys,

When you say Separation of Assets what most people don't understand is that creating an LLC is separating the Business as an "Entity" from yourself as an "Entity". This is important when you exchange a product, service or result for consideration (payment money or otherwise).

Depending on the State that you live in, filing a LLC can be straight forward and just a couple of hundred dollars.

Keep in mind that this affects how you file you taxes and make sure that you open a bank account in the Businesses name to "prove" that the LLC is a spearate entity from yourself and not just an alias to yourself.

Google setting up a busiess in you state. Many states set up website to help promote starting businesses and help make things easier to understand. Here is one for the State of Missouri: www .business .mo .gov - (sorry I couldn't link it up).

Lawyers with experience with Internet Marketers or Internet Business are helpful.
CPA with experience with Internet Marketers or Internet Business are helpful.

You should also consider spending time with you Small Business Administration or SCORE.

[Marty S]

Incorporating is one of the best things you can do IMHO, in MOST cases. However, incorporating for a single ebook sounds too narrow for growing. Don't name your corporation after your ebook because hopefully your online ventures will grow beyond it.

[bestIMtools]

Take my advice: Incorporate...NOW!
It will save you on taxes (talk to your CPA), and keep you from being personally liable should anything come up in the future. If you're serious about doing business, get your LLC started now.

I filed mine myself for about $130, then I pay $30 a year and that's it. Go to your state's Secretary of State website and do it yourself, no reason to get an attorney, it is too easy to do.

Best of success!

[jasonl70]

The actual process of Incorporating is a simple 1 page document that is very easy to fill out. There is no legal mumbo jumbo, etc (at least there wasn't here in ohio). It takes like 5 minutes to do - don't be suckered into paying any service or person to do it for you.

[RevenueRabbi]

Which state are you in?

[DougBarger]

Hi Your Reviewer,

It's good to ask questions to get feedback from others before deciding on what
course of action you feel most comfortable in taking.

I, for one, like to speak from experience and hopefully if there is something helpful
from what I share that you can use for your own situation, then nothing would satisfy me quite more.

After deciding that incorporation was the route I wished to take with my business,
I decided to go with Legal Zoom.

They are owned by Robert Shapiro and the quality of information they offer
from their site is exceptional in helping an entrepreneur decide what is best for you.

I opted to go the Inc. route and paid a little less than $400.

What really impressed me was the fact that after payment, I was given
a link to my own private back office where I could check at any time
to see the status and the progress that had been made complete
with dates of estimated completion and what particular steps
had already been taken.

Although it had been projected that it would take at least 30 days
to have my own corporation officially and legally incorporated,

I was pleasantly surprised to find that it was actually finished
in 29 days.

As it turned out, I was the new owner of my own corporation just one day
before my thirtieth birthday.

Their overdelivery means I can now boast to the grandkids one day
about how their grandfather formed his own corporation while still in his twenties.

(Walking 10 miles to school barefoot in the snow won't pass the sniff test by that time I imagine.)

All of my communications and experiences with this particular company have
been assuring, prompt, courteous and quick.

I couldn't recommend them more highly and with the extra registered agent service
I purchased, I have an office where people receive paperwork on my behalf and
forward through the mail that which is important.

If you are deciding to incorporate your business and are looking to just get it done
to where you know you can pay and then have it all done for you in a reasonable
amount of time and know you've got the best possible solution and in perfect
standing both for business and legally, then I'd be hard pressed to find a better
recommendation just based on my experience.

While everyone knows we shouldn't dole out or receive legal advice on this forum
or any other, I'm just sharing my experience in an effort to be of service
in sharing an experience that went well in the hopes that yours will go well too.

If you have any further questions regarding this experience, I'd be glad for you to shoot me a pm and no matter which route you decide is the best for your business and situation, I wish you the best.

Doug Barger

[sevenish]

There are many good reasons to incorporate, many of which have nothing to do with *current* revenues.

In any case, most -- if not all -- good online incorporation services ARE run by legal firms. The only difference may be in the way that you initially contact the vendor.

Because I chose to incorporate outside of the state of my residence (I live in NYC and incorporated in Delaware) I used a Delaware firm that was recommended to me by a good friend and colleague who just happen to offer online services as well.

[RevenueRabbi]

Delaware corporation is NOT what a NY corporation wants in most cases...

when you incorporate out of state you need a "right of foreign corporation to do business" in your home state....

In state or Wyoming, IMO.

[sevenish]

Originally Posted by BizBooks

Delaware corporation is NOT what a NY corporation wants in most cases...

Interesting. What is YOUR experience with a corp in New York State? I'd be especially interested in how you managed paying those state corporate taxes during those lean startup years.

when you incorporate out of state you need a "right of foreign corporation to do business" in your home state....

Yes, I'm aware of that having owned an "alien corp" in NY for 8 years. There are several complications to most out-of-state corp situations, however I felt they were beyond the scope of the OP's question.

[CmdrStidd]

Originally Posted by yourreviewer

Thanks for the advise buddy. Do you use any attorneys for your business? If so can you recommend one?

His recommendation would not be any good to you unless you both are in the same state. Attorneys have to be licensed for the state you are in in order for them to be able to practice. If you call your local bar association they can give you a referral and usually the attorney's fees are set at a bare minimum for the first half hour consultation. I know here in Cincinnati, it is only $30 for the 30 minute consultation and then you are billed at that attorneys normal rates.

[AlphaWarrior]

Originally Posted by yourreviewer

Hello,
I am looking to incorporate (LLC) for an ebook that I plan to release soon.

1. I have been told that it is a waste of money to incorporate if you are not making much money or if you are releasing your first product. Is this good advise?

2. Some have recommended incorporation via services like Zoom while some have advised against such services and have recommended consulting an attorney. Can anyone recommend any attorney with a reasonable cost?

Thanks

Yourreviewer, the very best thing you can do is pick up the phone and call several lawyers. Ask them if they handle small business matters and what they charge to talk with you initially - many lawyers do not charge for the initial visit. Do not rely on Zoom or any other internet non-lawyer business. They are not lawyers and if anything goes wrong, you have no recourse and are on your own. (Note: While Shapiro is a lawyer, all of the ads for Zoom point out that Zoom is not a law firm and does not give legal advice.)

There is a difference between a LLC and a Corporation. There is also a difference between a regular corporation and a closely held corporation. Then for tax purposes, there is a "S" and a "C" corporation. If a LLC is not set up properly, you may be taxed as a "C" corporation which may not be the best thing for you.

Also, while most people think that if you incorporate a business, you are off the hook and your assets are protected, that is not necessarly the case. If your ebook causes someone harm, you, as the author, can be sued personally.

Talk with a lawyer, but if you are not going to use a lawyer licensed in your state, then simply look on the internet for the Secretary of State in your state (some states have another office that handles incorporations) and get the forms on line and file the corporation or LLC yourself.

[yourreviewer]

Thank you so much for the wonderful suggestions. I am from Wisconsin. I will take a look at all the options you have suggested.

[artwebster]

I have a feeling that things are very different in the USA if all these opinions are valid.

First of all, there is a whole raft of stuff that hasn't been mentioned about the increased daily costs of running a corporation as opposed to being a sole trader.

As a sole trader you are self employed and have a wide range of tax reliefs that are available to you.

As the employee of your own corporation, you have your own personal taxes to pay on your wages and then the corporation has its own taxes to pay.

If there are welfare schemes in place, it is possible that the corporate costs will be far higher than the individual costs.

If the corporation is Limited Liability, there will be rules about the size of the board, the number and style of directors and the necessity for a company secretary (who can often be one of the directors).

Filing corporate returns is an added burden if you do your own personal returns at the same time.

Many people incorporate and have their home as the registered office and also claim tax relief on the parts used by the corporation. This can put your home in jeopardy and can often necessitate the recalculation of any mortgage since many lenders do not accommodate corporate mortgages. If the corporation is sued, your home could actually be lost if it appears as part of the corporate Balance Sheet.

It always makes me uneasy when I see information and advice on something that is absolutely unique to each individual being requested in a forum like this.

Since it is the tax advantages that most people blather on about, why not visit your local tax office and get real (free) information about the tax implications before trying to make a decision?

[Bishop81]

Find the Secretary of State website for your state and you can see all of the information related to forming businesses, submitting articles of incorporation, and absolutely everything else.

In Kansas, they even have it set up where you can form your business online. It just costs $150 for an LLC and you're done.

[MichaelHiles]

Originally Posted by CmdrStidd

His recommendation would not be any good to you unless you both are in the same state. Attorneys have to be licensed for the state you are in in order for them to be able to practice. If you call your local bar association they can give you a referral and usually the attorney's fees are set at a bare minimum for the first half hour consultation. I know here in Cincinnati, it is only $30 for the 30 minute consultation and then you are billed at that attorneys normal rates.

This.

Plus, the attorney I recommend may not be suited for you or your business temperment.

I have an attorney (Cincinnati-based in fact) who is a crack securities expert, particularly in real estate, but also in general business finance. The thing about my attorney is that he is very entrepreneurial - not the risk averse "oh heaven forbid you take a risk..." hand wringing exhibited by MANY attorneys. His brother runs a couple venture funds in NYC and he comes from a line of successful businessowners.

Frankly, I don't want an attorney trying to dissuade me from taking a business risk. ALL BUSINESS IS RISK! PERIOD! If attorneys ran the world, there would be no business. The Trial Lawyer's Association is trying really hard to make that a reality.

They don't teach business in law school.

That's why attorneys think there are 42 billable hours a day.... did I say that out loud?

[Janus]

This CPA has guidance and do-it-yourself kits for every state, see at stephenlnelson.com. Every state has different fees and requirements. There are major difference between a corporation and a LLC, both liability protection and in your options for tax treatment. Not every state allows the formation of single member LLC's but you can choose one that does. Most LLC's also elect to be taxed as a partnership and in general the partners only pay taxes in their state of residence. However you should hear all the above from an attorney or CPA that you know and trust before you decide.

[acherno]

Online services are very tricky, however i used BusinessRocket.net and it was great! They assigned a private conciege to my account and where able to answer any questions that i had! So when it comes to using services like legalzoom or incorporate.com i would stay away from them, but sites such as BusinessRocket.net are very useful!

[GarrieWilson]

Most attorneys will say INC but accountants say LLC.

LLCs are easier to manage, require less paper work, and you don't have to file papers to get a bonus. No anual meetings, etc.

They also protect you just like an INC.

However, if you break the law, the veil will be pierced. Even if you do something stupid or unknowingly.

You should also have "cyber liability" insurance. It wont cover all but can help for certain things.

I was told by multiple people that an INC is only beneficial over an LLC when you reach 100k/year.

I used incorporate.com to setup my LLC. It was easy but cost $1500 for everything. I didnt want to do it myself but it is possible.

Not legal advice...

[Dontrell Lyons]

Originally Posted by jasonl70

The actual process of Incorporating is a simple 1 page document that is very easy to fill out. There is no legal mumbo jumbo, etc (at least there wasn't here in ohio). It takes like 5 minutes to do - don't be suckered into paying any service or person to do it for you.

Yep, that's true. My state (kansas) has a website where i login and fill out a few forms and it creates all the LLC documents for me. It also lists all the LLCs I have registered.

Business is easier than most people think...

[VegasGreg]

Check out the WSO - Free Instructions & Forms - How to Set Up Your Own LLC

It will tell you everything you need to know, and it is free.

One thing I have picked up on is that even if you have an LLC, if you do not separate your personal funds from your business funds you are not really protected from personal liability like most people think. So if you do go with a LLC, make sure you do not co-mingle your personal bank accounts from your business accounts.