Forums: Discussions for entrepreneurs and small business.

Has anyone had any experience using those "do-it-yourself" kits to form their comanies? I was looking online at my sec of state`s website and the forms all look real simple. What benefits are there with using a service or a CPA/Tax attorney. I can see paying $50 for a kit with step-by-step instructions but I am not sure about spend 200-300 bucs for anything else. Your input is appreciated.

J

We used some books from nolo.com to form our LLC here in Texas and it worked great.

We considered using a third party to do the work for us but we wanted to fully understand the details of what we were getting ourselves into. Plus our sec of state`s website was fairly easy to navigate and register.


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Joe Rawlinson
Texadero - Web Marketing and Development
Family Says - Your private family website made easy!

I agree with Texadero.  I have been doing research myself on forming an LLC and things are NOT difficult.  As long as you are able to determine the best business structure for your venture, there really is no need to use one of those expensive services.  Also, there are a lot of good people on this site that would be able to help you determine the best structure for your venture.  There are also many CPAs (I am one) that understand the tax implications of each structure.  People are willing to answer your questions, so just post them!  Good luck!

I agree. You can certainly do the paperwork yourself (should you want to). The bigger issue is making sure that you actually are forming the right type of entity.

I too am a Nolo fan (even though my book competes with about three of theirs haha). Their work is excellent.

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Accounting Made Simple | Sole Proprietor Tax Guide

You can easily do it yourself.  The real issue is what form of business makes the most sense for you.  Forming an LLC might be unnecessary.  Setting up an LLC is simple, closing one down and following the proper legal procedures for taxes and limited liability should also weigh into your decision.  Don`t forget you can buy insurance for many of the risks you`ll face as a business owner. 

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Check out my blog at www.GreenCPA.blogspot.com

Thanks a bunch for all of your input. I do need the protections afforded the LLC (at least) because of the liability of hiring sub contractors to do the bulk of my construction projects. (some projects could total $500k- $1M)

 But, I am not going to hire out the formation I am going to do it myself. It turns out that I can form my exsisting SoleP into the LLC.

But, my question is : does it retain the original start date or is the formation of the LLC become the start date?

1.  I hope you still have (or will get) insurance.  Your LLC will not protect you from all types of liability, for example it won`t protect you if one of your subcontractors steals from a customer.

2.  If you will be a Single Member LLC and you do not elected to be taxed as a C-Corporation or S-Corporation, then you are a disregarded entity as far as the IRS is concerned and thus, accounting wise you will just continue on.  If you elect to be taxed as either a C-Corporation or S-Corporation, then you will be a sole proprietor until either your C-Corporation or S-Corporation takes effect.



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Gina L. Gwozdz, CPA
http://GLGcpa.com
http://TaxTreasures.com

One more thing.  Many small businesses have been forming their own LLCs and so far none of the ones who have become my clients have ever completed ALL of the necessary steps.  I have not read or used the resources that have been in this post, but at a minimum a LLC, from my non-legal knowledge and background, an LLC should have the following:

1.  Proper state Formation
2.  Funding
3.  Operating Agreement
4.  If your operating agreement does not include consent of your business to perform business, then you`ll need a seaparate "written consent"
5.  Run you entity as a SEPARATE business, regardless of how you will be taxed.
6.  Abide by your operating agreement.
7.  If you have elected to be taxed as a C-Corporation or S-Corporation or if you have partners and are therefore taxed as a Partnership, abide by the rules that govern those entities.
8.  If you set up your LLC in one state and are doing business in another state, most states require that you "obtain permission" to do business in their state - look up these rules and abide by them.



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Gina L. Gwozdz, CPA
http://GLGcpa.com
http://TaxTreasures.com

You will need a copy of your state’s LLC  of Organization form and to select a name that is not in use by another.Though not required by the state, an LLC Operating Agreement is necessary for successful functioning of a Limited Liability Company.I recommended Click Industries, Ltd.

http://www.clickandinc.com/