Start Your LLC Today!
Thank you for reading this post, don't forget to subscribe!As most entrepreneurs know, starting a new business comes with many small challenges.
If you’re serious about making the right move from the start, the first thing you’ll want to overcome is Formation of your business entity.
Most of the real estate investors I know (myself included) have properties in LLC names.aka – limited liability company) and there are a few reasons for this:
- Can an LLC protect your personal property Business related lawsuits.
- owned by an LLC tax benefits which allows for “pass-through taxation” (whereas some other types of corporations re-taxed this,
- an llc offers instant credibility for many of your customers.
When I first tried to become familiar with the different types of legal business entities available and what each was designed to do, I found this book to be an excellent overview of them. If you need an education in this area, this was a great resource that helped me put the pieces together (just make sure you consume plenty of caffeine before starting).
Disclaimer: This blog post cannot tell you which legal entity is best for your business. I’m not a lawyer or an accountant, and I don’t know exactly what you want to achieve with your business. The instructions I give are just one way to do it, but there are many other ways. Different types of businesses have different rules and tax implications, so it’s important to speak with an attorney before making any decisions.
How to Register Your LLC
Forming your corporation or LLC may seem like a complicated legal process, but it is quite simple, and you can do it in minutes.
with online service like Northwest Registered Agent, you can avoid the mind-numbing minutiae of finding the right forms for your state, filling them out correctly, and sending them to the right place. You can do this for much less money than what a lawyer would charge for the same service.
Of course, a lawyer can give you the best technical advice and make sure everything is in place to suit your situation. Still, if your budget is low (as I was in the beginning), a service like Rocket Lawyer is probably your next best option.
As with anything, when it comes to incorporating your business, There’s More Than One Way to Skin a Cat, i’m not telling you need use a service like Northwest Registered Agent, it is simply a medium that creates a process easy and cheap, If this tutorial sounds like something you might do – feel free to give it a try!
if you want to use travel mailbox Or openphone, Don’t worry; You can learn more about them here:
Comment: If you have the budget and want to hire an attorney to look over your specifics and make sure you’re doing the right thing, Anderson Business Advisors can help.
Connected: Death, Lawsuits & Taxes: Important Tips To Protect Your Real Estate Assets
Should You Form a Corporation or LLC?
If you are not well-versed in corporate law, you may feel lost in all the legal jargon of incorporating your business.
He is alright I felt the same way in the beginning. It can be a little intimidating when you’re not sure what type of legal entity to form, how to form, and what the advantages and disadvantages of each option are. Since I’m not a lawyer, I’m in no position to tell you what to do, But I can tell you what I did and why.
When I started my real estate investing business, I registered a new LLC (Limited Liability Company) in the state where I was buying properties. There were many reasons for this, but the main ones were:
I was the sole owner of the company.
With no other owners involved, many aspects of my business have been simple by design since day one. With only one owner, it becomes easier to sign documents, control the company, keep records, do your accounting etc. It also allows me to avoid preparing a separate tax return for the business each year. I include a Schedule C with my personal tax return and call it good.
An LLC allows for “pass-through taxation”.
With an LLC, I Only Pay Taxes Once On a personal level, and this applies only to the net profit that I personally receive. I’ve found that this is a very simple method, and the less often I have to bear the burden of taxes, the better.
There are other considerations as well. watch this video my corporation (another service that can help you get involved), which does a good job of summarizing some of the biggest issues to consider…
As you can see, it’s not a bad idea to consult with your accountant and/or attorney to decide what is best suited for your situation.
Where should you join?
One more question,
“In Which State Should I Register My Corporation or LLC?”
this is a valid question Because most states have many similarities, but none are exactly alike. Some states have different tax laws, filing fees, and other factors that can play a role.
It’s also worth considering which state you’ll be doing business in, as in many cases, registering your business entity there will be most beneficial. Here’s another video that might help explain…
Again, since I’m not a lawyer or accountant, I’m in no position to advise you on what to do, but just speaking for myselfI chose to register my LLC in the state where I lived, which was the state where I planned to do most of my business.
Tax ID Number and Corporate Documents
Once your new business entity is registered in the state of your choice, the next step is to obtain your Tax Identification Number (aka – Employer Identification Number or EIN). you can do it to free By this application form on the IRS website.
This video will show you step by step how it is done.
If your business is a single-member LLC (like mine is), you can also use your Social Security number as your tax identification number, but maintain this business entity completely separate from your personal finances, It’s not a bad idea to register for a different EIN anyway.
An LLC needs to have “Articles of Organization” (again, this is created when you register your LLC with the state) as well as “operating agreement,
If at any point you need to create an operating agreement for your LLC (note: this will likely be required the first time you close a deal with a title company or apply for a loan in your business name), this The video explains an easy way to do it…
If you want to create your operating agreement through the method mentioned above, you can start from here,
Put it all together
Forming a Corporate Entity As I mentioned earlier Not there A necessity to get started.
However, if you want to set up a serious business that will last for years and protect you from personal liability, I think it’s important to set it up as a corporation or LLC. When you buy and sell assets under your personal name, you are essentially investing All your personal assets are at risk In the event of a lawsuit, and this is not a position you want to voluntarily put yourself in.
Given how easy it is to check this box, there’s no reason to be intimidated. If you need help dealing with these activities, companies like Northwest Registered Agent Will make it easy.
