Showing posts with label Business Structure. Show all posts
Showing posts with label Business Structure. Show all posts

Friday, August 14, 2020

Setting Up The Surrogacy Agency: The LLC

I am going to cheat on this one and give you an article from I had a business attorney to go through all the in's and outs regarding an LLC and that's what was decided upon. It'a up to you to decide what's best.

The Limited Liability Company, or LLC
BY: Scott Allen

The Limited Liability Company, or LLC, has in recent years become the most popular legal structure for small businesses wishing to incorporate. The exact requirements vary slightly from state to state, but setting up an LLC is a relatively simple process that can usually be done in an hour or less, depending on the complexity of your organizational structure.

Difficulty: Easy
Time Required: 1-4 hours, depending on complexity of company

Here's How:

Obtain a copy of your state's LLC Articles of Organization form from your state's Secretary of State office. When you contact them, also find out if the state in which you are incorporating requires you to post a notice in the newspaper. Also find out any specific rules regarding business names.

Choose a name for your business that complies with your state's rules for LLC business names. The main part of the business name is generally very flexible, but each state has a list of prohibited words, such as "Corporation", "Incorporated", "Insurance", "City", and others. Your legal name must end with an LLC designator, such as "Limited Liability Company", "LLC", etc. Also, the name can not be the same as another LLC on file in the state in which you are filing.

Fill out the LLC Articles of Organization form. This is usually a relatively simple process, as the only things you need to notify the state about regarding your LLC are items such as name, its business purpose, principal office address, the "registered agent" for receiving any legal documents, and the names of the initial members. You do NOT have to specify at this point the ownership distribution or management structure, just the names of the LLC's members.

Publish a notice in your local newspaper of your intention to form an LLC (if required by your state - don't waste the money otherwise). This should be done prior to filing your Articles of Organization. Currently this is only required in Arizona and New York. Check with your state's Secretary of State to be certain.

Submit your Articles of Organization form to your Secretary of State along with the appropriate filing fee. Fees range from $40 to $900, depending on the state. Be careful: some states may have a corporate tax which is separate from the filing fee but must be paid at the time of filng. For example, California has only a $70 filing fee, but an $800 annual tax.

That's it, you're done! At least legally, that is. Now wasn't that easy? While you're done in terms of legal requirements, there's still a very important piece missing: the LLC Operating Agreement. However, the Operating Agreement is not required by the state, and can be created after the legal filings are done. If you are the sole owner of the LLC, you probably don't need one at this point. However, if there is so much as one other owner, it's best to make a written agreement of the terms.

Create an LLC Operating Agreement that spells out the financial and management rights and responsibilities of the LLC members, such as: who contributes what if the LLC needs additional capital, when and how profits from the business will be distributed, under what terms members can leave the LLC, etc. Even (or perhaps especially) among friends and family, leaving these questions unanswered can create strains on both the business and personal relationships down the road. Put it in writing!


Although not legally required, you should probably work out the details of the Operating Agreement well in advance of filing the LLC Articles of Organization. You may find that someone doesn't want to be a part of it once they know the whole deal, or perhaps that you need to bring someone else in. Work it out in advance.

You can hire an attorney for this, but really, unless your organization is fairly complex, you can do this yourself.

Unless you have a compelling reason otherwise, it's generally best for small businesses to incorporate in the state in which it will principally be doing business. There are some tax and organizational advantages to registering in certain states, however. Delaware, Nevada, and recently Wyoming are the most popular for out-of-state corporate registration. Consult with an attorney or research it on the web further if you are in doubt.

Saturday, April 18, 2009

Business Mail Delivery and Address

I want to touch on your MAIL situation. Assuming that you are starting out with a home office, you do not have a business address. You probably don't want your mail to come to your home address either. WHY? Well, first you can look up the address on Google and see exactly where you live. Not that I am suggesting potential clients or surrogates are going to hunt you down but it IS best to protect your home and family from that one in a million person that IS NOT satisfied with your service and decides to tell you in person. (at 3 AM with a rock through your window) What to do? Get a local mail service. Mail Box rental is the way to go. The address is not a PO Box but a full business address and if it is Goggled then all that will come up is the rental address. It will also make it easier for you to mail your packets out or buy stamps. With the price of gas, one stop shopping is the way to go so look for something close to home!

Thursday, March 12, 2009

What is a Tax ID and How to get one

I just love the Internet! Robert Longley has already done the hard part and wrote out all the information needed regarding Federal Tax ID numbers and all I did was cut and paste them here! Thank you Robert!

LaMothe Services, LLC

At some point your business will need one of these
The government form you're feverishly filling out has a blank demanding your business's "Federal Tax ID Number" or "Employer Identification Number (EIN)." Unfortunately, you don't have one. What is a federal tax ID number, does your business even need one, and how do you get it?
Q. What is a federal tax ID number?

A. A federal tax identification number (also know as an employer identification number or EIN), is a number assigned solely to your business by the IRS. Your tax ID number is used to identify your business to several federal agencies responsible for the regulation of business.

Q. Does my business need a federal tax ID number?

A. Any business offering products or services that are taxed in any way must get a federal tax ID number.

If your state taxes personal services, or if you are required to collect sales taxes on your sales, you need a federal tax ID number. All the government forms you will be required to file for your business will require either a Social Security number or a tax ID number.
It's safe to say that any business that has employees and/or pays any kind of taxes will need a federal tax ID.

To set up a federal tax ID number (also called an Employer Identification Number, or EIN), contact your nearest Local IRS Field Office, or call the IRS Business and Specialty Tax Hotline at 800-829-4933.

The form you'll need to fill out is IRS From SS-4 and you can download it directly from the SBA Web site.

If your business does not have employees, the IRS recommends you label the top of the form SS-4 "For Identification Purposes Only."

Tuesday, March 10, 2009

Choosing a Structure for Your Business~More Options

I thought it would be a good idea here to tell you about corporations. Here you can see the pros and the cons. Feel free to investigate on your own using the Internet! There is so much information and you can make an inform choice!

Choosing a Structure for Your Business
Small business owners should consider the advantages of both a corporation and a Limited Liability Company (LLC) when forming a new company. Selecting the right structure can help you maximize your chances for success. Though corporations and LLCs can both help protect personal assets from business debts, they differ in the following respects:

Advantages of a Corporation

May issue shares of stock to attract investors
Corporate income splitting may help lower overall tax liability

Advantages of an LLC

Has no limit to the number of owners
Owners can report profit and loss on their individual tax returns
Not required to hold annual meetings or record minutes

Disadvantages of a Corporation

Double taxation of corporate profits and shareholder dividends
Must hold annual meetings and record minutes
S Corporations have restrictions on number of owners

Disadvantages of an LLC

Cannot engage in corporate income splitting to lower tax liability
Cannot issue stock

Note: LLC owners can elect for the IRS to tax the LLC as a sole proprietorship, partnership, C Corporation, or S Corporation. Owners make this election through the IRS after the company forms with the state.

Sharon LaMothe
LaMothe Services, LLC

Sunday, March 8, 2009

More about the LLC

How You Can Benefit from a Corporation or LLC
Regardless of their size, all businesses can benefit from incorporating. Typically, the reason most people form a legal business structure is to safeguard their personal assets. Incorporating or forming a Limited Liability Company (LLC) helps you conduct your business free from worry that you might lose personal savings or possessions because of a business liability.

Advantages of Forming a Corporation or LLC
Personal asset protection. Both corporations and LLCs allow owners to protect their personal assets. In a properly structured and managed company, owners should have limited liability for business debts and obligations.

Improved credibility. Adding "Inc." or "LLC" after your business name can add instant authority. Consumers, vendors, and partners may prefer to do business with an incorporated company.

Nationwide availability. All 50 states and the District of Columbia now recognize both corporations and LLCs.

Name protection. In most states, other businesses may not file your exact corporate or LLC name in the same state.

Ensured continuity. Corporations and LLCs exist perpetually, even if ownership or management changes. Sole proprietorships and partnerships end if an owner dies or leaves the business.

Tax flexibility and savings. Corporations are taxed at a lower rate than individuals. Though profit and loss typically pass through an LLC and get reported on the personal income tax returns of owners, an LLC can also elect to be taxed as a corporation. Likewise, a corporation can avoid double taxation of corporate profits and dividends by electing Subchapter S tax status.

Deductible expenses. Both corporations and LLCs may deduct normal business expenses, like salaries, before they allocate income to owners.

Not Ready to Incorporate Yet?
Try our Business Startup Wizard to learn what others in your state and industry have done.

Download our Free 10-Step Business Formation Guide.

Get more details about forming a corporation or LLC in our Small Business Resources, or check out another service.

Sharon LaMothe
LaMothe Services, LLC