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How to not get screwed in signing an LLC.

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LunchMoney

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I truly hope this was placed in the right category, and if not, I'm sure it may be moved.

So, one day a few weeks ago a partner and I probe into a local market, take a poll with a local community, and we come up with the fantastic idea of opening a 24/7 gym near my house.

Me, an avid gym-goer for a decade with a sense for business and entrepreneurship. She, an owner operator of five locations hours from her home, built successfully (per my research) from the ground up.

We negotiate and plan, pin down the location, essentials, inventory, everything.

Though I've known my partner for years growing up, and know that she has an outstanding business and community reputation, I have to look out for my own hide at the end of the day. Not wanting to miss any details, I sit down and type "LLC" into The Fastlane Forum and...zero, zilch, nada.

I was appalled. I couldn't believe it. Thus, I spent a few hours searching LLC on Google and reading whatever tips, tricks, and samples I could find. Then I discussed multiple scenarios with somewhat of an older more experienced mentor.

Currently, I'm waiting on renovations for my location to finish and then launching pre-sales in a few weeks. Tax ID, city business license, everything with our bank has been taken care of.

I'd like to hear some of your experiences, dos and don'ts of taking on an LLC.

I wouldn't know where to tell you to begin. Company percentages, who brings more value, investments of time, and of course all the negative things that could affect the LLC itself and it's reputation in the local community (or nationally if you grow).

Thank You As Always.
 

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AgainstAllOdds

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I'll summarize what everyone else will say: You should speak to a lawyer or an accountant to make sure everything's in order.

But overall, creating an LLC is a pretty straightforward process. The operating agreement between you and your partner will be the most difficult and where you should put the most thought.
 

BrooklynHustle

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Agreed. It is extremely straightforward
I'll summarize what everyone else will say: You should speak to a lawyer or an accountant to make sure everything's in order.

But overall, creating an LLC is a pretty straightforward process. The operating agreement between you and your partner will be the most difficult and where you should put the most thought.
,
 
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LunchMoney

LunchMoney

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I'll summarize what everyone else will say: You should speak to a lawyer or an accountant to make sure everything's in order.

But overall, creating an LLC is a pretty straightforward process. The operating agreement between you and your partner will be the most difficult and where you should put the most thought.
True. And I agree it is pretty straightforward.

I've already spoken with mine, and signed.

I suppose in recently watching The Founder, I wanted everything covered and to make sure there wasn't something I didn't see.
Maybe I should give myself more credit :):thumbsup:
 

mikey3times

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Though I've known my partner for years growing up, and know that she has an outstanding business and community reputation, I have to look out for my own hide at the end of the day.
Exactly. As the guys above said, the LLC is pretty straightforward. You need to search the form for "Partner" instead of "LLC." Here are some:

Reservations about my new business partner. How much value should I give my concerns?

Need Advice with Partner

Did you start your first company with a business-partner?

Back Stabbed by Partner

Going into business with a friend or family is something to think about long and hard.
 
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LunchMoney

LunchMoney

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CareCPA

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If you've already signed your operating agreement, then it's a little late to do your research. You should have made sure all the "what ifs" were covered before you signed.
For example, if your partner dies, do you get buyback rights? Or are you stuck with a new partner that you can't stand? Or 30 new partners if their interest is allowed to be split among all their heirs?
Do any major decisions require both partners? Or just majority ownership? Does one person even have majority ownership or will you be in a continual stalemate if you disagree on things?
There are a plethora of questions to figure out before you sign. Fingers crossed you did your due diligence

...
Though I've known my partner for years growing up, and know that she has an outstanding business and community reputation, I have to look out for my own hide at the end of the day. Not wanting to miss any details, I sit down and type "LLC" into The Fastlane Forum and...zero, zilch, nada.
...
This surprises me. I just did a write-up on various business entities recently. Are you sure you're searching correctly?
 

JAJT

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If you do a title-only search, you get zero results.

I'm assuming this is a bug (maybe it has a 4+ character requirement on title searches?)

If you do a search for "llc" without the title checkmark, you get 48 pages of 20 results per page for about 1,000 results:

upload_2017-10-2_9-17-35.png
 
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LunchMoney

LunchMoney

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If you've already signed your operating agreement, then it's a little late to do your research. You should have made sure all the "what ifs" were covered before you signed.
For example, if your partner dies, do you get buyback rights? Or are you stuck with a new partner that you can't stand? Or 30 new partners if their interest is allowed to be split among all their heirs?
Do any major decisions require both partners? Or just majority ownership? Does one person even have majority ownership or will you be in a continual stalemate if you disagree on things?
There are a plethora of questions to figure out before you sign. Fingers crossed you did your due diligence


This surprises me. I just did a write-up on various business entities recently. Are you sure you're searching correctly?

I took care of the due diligence. Wouldn't have signed otherwise of course, I was just hoping to find some serious insight on my favorite forum! :)
 

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