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Anyone have advice on setting up an LLC in California

Discussion in 'Asset Protection/Taxes/Legal' started by brumaire, Jan 9, 2013.

  1. brumaire
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    brumaire Banned

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    Is legalzoom a good route? MyCorporation? Doing it myself? Getting an attorney?

    I need it fast
    I need it to be structured so me and my partner split profits 50/50, but if possible I have 60% ownership or something like that. I want to own more
    It's just me and my partner


  2. dknise
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    dknise 210 kph FASTLANE INSIDER Read The Millionaire Fastlane Speedway Pass

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    Let me google that for you

    First unsponsored link.
    Click Limited Liability Corporation
    Click the link to the form required
    Fill out form
    Mail / Email / Complete registration with payment
  3. brumaire
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    brumaire Banned

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    I did google it. I've seen all the links.

    I am asking for advice on courses of action, I understand how to do it. I want to know what fastlaners experiences have been.


    It's always funny when someone is condescending but in reality they are totally off what they are talking about. It betrays the persons eagerness to be rude.
  4. dknise
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    dknise 210 kph FASTLANE INSIDER Read The Millionaire Fastlane Speedway Pass

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    Have you looked at the form to fill out? In Washington it's 2 pages. If you have another company do it for you, they're going to be requesting all of the same information and are going to use that same government form to complete the task, you're just going to be paying them for it.

    You'll have a lot of legal documentation to fill out with the state over time. I'm not sure if California has one, but some states have user logins to go online and manage your company with the state. That's useful in changing membership to an LLC or adding "doing business as" names to your documentation. If you hire someone to do it, you most likely won't have access to those nifty tools.

    IMHO... it's a quick form... just fill it out.
  5. brumaire
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    brumaire Banned

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    For instance, has anyone filed their own and regretted not using an attorney? Anyone have negative experiences with legalzoom?
  6. brumaire
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    brumaire Banned

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    Thank you
  7. MJ DeMarco
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    MJ DeMarco Admin Staff Member FASTLANE INSIDER Read The Millionaire Fastlane Speedway Pass

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    A caution: A California LLC will cost you $800/year just to file returns, and it doesn't matter if that LLC takes a $1M gain, or $1M loss, or does nothing for the year.
    2 people like this.
  8. brumaire
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    brumaire Banned

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    I saw that. Its so crazy. I wonder if I could file in another state or something.

    Pardon my ignorance, this is my first time, the first hour of me doing this ever. I know nothing about incorporation.
  9. brumaire
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    brumaire Banned

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    S corp is the way to go apparently
  10. Twiki
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    Twiki 60 kph FASTLANE INSIDER

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    You should talk to both a lawyer AND and a CPA about this, as the best decision for legal purposes may or may not be the best decision from a tax filing perspective. Like for example, an LLC can file as an S Corp... they are not mutually exclusive in that sense. This subject is way too complicated and dependent on your personal situation to base off of advice from an internet message board --- there's a big chance you will likely end up regretting it.
  11. ewH
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    ewH 40 kph Read The Millionaire Fastlane Speedway Pass

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    Yes, you can file in another state that doesn't require you to be a resident. I did a lot of research on this before I decided to stick with my home state of Kentucky. Most people who choose to file for out of state corps tend to go with the more business and tax friendly states like Nevada, Delaware, etc. Just remember that if you are planning to have some type of physical presence for your business such as a brick and mortar store, you usually still have to file as a foreign business entity in the state you are doing business. Some times this will negate any advantage that you gained by filing out of state since you still have to deal with paperwork and laws locally anyway.

    If your state is LLC friendly and has any tax breaks for residents, it's usually better to just stick with your state. If it's not as clear cut, which I hear California can be tricky, it may be worth filing elsewhere.
  12. The-J
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    The-J 180 kph FASTLANE INSIDER Read The Millionaire Fastlane Speedway Pass

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    Having an attorney can help you if your situation is unique. What kind of business are you running? What are you selling? Where will the business be located? Are you going to be operating on the Internet?

    The attorney can also help you with business license procedures.

    In most cases, you don't need one, though. I didn't need one and I'm not even out of college yet. (Granted, I was running an Internet business based out of Delaware which I happen to be a resident of)
  13. Twiki
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    Twiki 60 kph FASTLANE INSIDER

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    There's a story from Derek Siver's great book "Anything You Want" that I always think about, when it comes to basing legal/accounting decisions based on tips and advice. Derek is the guy who built CDBaby into a multimillion dollar operation. Before he started CDBaby, he had a small business that was partially funded by his father. When Derek got CDBaby going, he needed to create a separate business bank account, so he went to the local bank, and asked how to go about setting this up. The friendly bank teller told him that he could just create the new account as part of his existing business account. "That was easy" as the slogan goes.

    Well, months and years later, after Derek worked and struggled to make CDBaby a massive success, he got a call from his lawyer. Because of the way the accounts were setup according to the friendly bank teller's advice, it turned out that Derek's father owned the company, not him! Oops.
  14. GlobalWealth
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    GlobalWealth 150 kph Speedway Pass

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    There is also now a revenue tax in CA.
  15. ^eagle^
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    ^eagle^ 50 kph Read The Millionaire Fastlane Speedway Pass

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    without knowing what your business is the best out of state filing is new Mexico. The rules are very linient. No annual reports, Low fees, Least maintence. however you will have to hire a registered agent if you do not live there which increases costs. If your state is LLC friendly < Mine in Florida is except for the annual report, the fees are less than filing in new Mexico Plus a registered agent.

    But if your business is more complex you might want to consider other options. simple businesses usually can get by with an LLC but the more complex it gets the more you need to consult an attorney and aCPA.
  16. JasonR
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    JasonR Maverick Staff Member FASTLANE INSIDER Read The Millionaire Fastlane Speedway Pass

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    Revenue tax?
  17. Execution=King
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    Execution=King 90 kph FASTLANE INSIDER Speedway Pass

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    This.

    Also, if you are in California, you have to pay CA corp fees & taxes even if you incorporate in another state; otherwise no one would incorporate in California.

    BTW, LegalZoom is awesome for people whose businesses never amount to much.

    But if your business turns into a screaming success, you can bet that you will have made at least one crushingly expensive mistake as you clicked your way through LegalZoom's checklists.

    One way or another, you are going to pay for a good attorney. Paying now can mean paying much less later.

    A possible intermediate step is to contact your local SCORE office and schedule a free consultation with one of the retired lawyers who's signed up to offer free coaching. If you're in L.A., Score has an office in Glendale office. Give them a call; I bet they'll help you.

    Finally -- don't let random forum smartasses bully you out of getting real legal advice.

    They have no skin in the game.
  18. tamo42
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    tamo42 15 kph FASTLANE INSIDER

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    CA is probably the worst state to incorporate in.
  19. Execution=King
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    Execution=King 90 kph FASTLANE INSIDER Speedway Pass

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    For non-Californians, that might be true.
  20. Execution=King
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    Execution=King 90 kph FASTLANE INSIDER Speedway Pass

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    LOL, check out the ad someone was running in this thread when I just browsed it:
    [​IMG]

    Three spelling errors in the headline alone -- what are the odds this company isn't going to screw up your filing?

    :eusa_clap:
    1 person likes this.
  21. socaldude
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    socaldude 170 kph FASTLANE INSIDER Read The Millionaire Fastlane Speedway Pass

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    As long as you have some sort relationship of business in california you still have to pay some sort of tax, even if you incorporate somewhere elese such as delaware.

    One of the cool things i recently found out about LLCs is that you can have a lot of different exotic forms of ownership. for example ownership that can kick in at different earnings levels etc.
  22. JamesS88
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    JamesS88 40 kph FASTLANE INSIDER Read The Millionaire Fastlane Speedway Pass

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    I believe you, but could you please elaborate? I'm a noob. I've only filed one LLC and it was through LegalZoom.
  23. marc100
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    marc100 15 kph

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    Im going through this now, and Im so confused.
    I just moved to California a month ago and need to set up an LLC.
    If I set up a LLC in Delaware, im still going to have to file with California as a foreign entity and pay the $800 fee to CA, but then Ill ALSO have to pay Delaware $350 + $150 filing fee as an out of state entity conducting business in California.
    And I'll be subject to tax liability in my home state anyways, but now I'll have to do 2 sets of paperwork.

    A California business that incorporates in Nevada will still have to pay California taxes. In addition it will have increased its compliance costs and still have to do 2 sets of paperwork for both states.

    A lawyer: https://www.youtube.com/watch?v=6NbwiPYau7c
    another Lawyer: http://www.pahl-mccay.com/should-california-businesses-incorporate-in-nevada.aspx
  24. tamo42
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    tamo42 15 kph FASTLANE INSIDER

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    Yes, that is true. LLCs are typically taxed as pass-through entities. That means that that all the profits (or losses) will go onto your personal tax return, which will be subject to whatever tax burden you have in your home state.

    In addition, if you are doing business in your home state, then you will have to register as a foreign entity in your home state as well.

    Most of the time, people selling Nevada or Wyoming LLCs are just hawking registered agent services.

    If your business is not actually operating in your home state though (e.g. 100% online or operations are elsewhere), then you would not have to register your LLC as a foreign entity. So there are options.
  25. paqman
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    paqman 20 kph FASTLANE INSIDER Read The Millionaire Fastlane

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    Yes, absolutely. And CA is one of the most aggressive "tax hound dog" states around (at least that is my completely ignorant opinion from my firsthand experience in CA).

    There are other benefits to asset protection that can make incorporating in DE/NV or other states "beneficial"... but check with your CPA and attorney to see if it applies to you. Understand that as a foreign file, you hit it on the head (Primary State Corp Filing + CA State Corp Filing). Some CPA's aren't too worried about this, as the numbers apply on both state's filing forms. But it really depends on your total revenues, expenses, primary source of revenue, demographics, and more.

    I can't say much for LegalZoom, as I always found their pricing to be extraordinarily higher than other comparable services. I personally have used and enjoy the service and support from MyNewCompany (non-affiliate link)

    If you have crappy credit, no assets, etc... Save your money. Once you start making some $$ and don't want to lose it, jump into the INC/LLC arena.
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