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yveskleinsky

Bronze Contributor
Speedway Pass
Jul 26, 2007
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Does anyone here use legalzoom.com? ...We are wanting to start up another LLC, (I think we need an LLC- but maybe we need a S-Corp) but I am having a hard time trusting local people to help us form one. Any thoughts on where to go, or maybe questions to ask to determine which entity is right for us?
 

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Diane Kennedy

Bronze Contributor
Aug 31, 2007
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Does anyone here use legalzoom.com? ...We are wanting to start up another LLC, (I think we need an LLC- but maybe we need a S-Corp) but I am having a hard time trusting local people to help us form one. Any thoughts on where to go, or maybe questions to ask to determine which entity is right for us?
I can't even begin to tell you the extra thousands of dollars in fees I've had to charge people who try to go through someone like legalzoom to set up a company...and then get the wrong entity, in the wrong state or fail to do an Operation Agreement, register the stock, make public notice or any of the dozens of things they never tell you about.

If you aren't having your CPA or attorney involved, then STILL get some professional advice. I highly recommend Megan Hughes www.BusinessFirstFormations.com. She's a paralegal with 20 years experience. She can form in any state and knows what she's doing.

Horror story - even with expensive legal work. I just got off the phone with a new client and they had clearly had a top attorney who was too busy to pay attention to what they were doing. He was putting everything into one LLC - even though there were actually 3 businesses - one in Canada, one in NY and one in NV and a bunch of assets (held in Europe.) I can't even imagine what a mess it would have been if they had done it before they called my office. We would have had states and countries fighting for the tax...and probably ended up paying triple tax in some cases. Plus they would have had self-employment tax of 15.3% on the income.

It took an hour just to understand their businesses, and yes, they paid me for my time. But, it saved them LOTS of cost down the road.
 
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yveskleinsky

yveskleinsky

Bronze Contributor
Speedway Pass
Jul 26, 2007
2,233
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Thanks for the heads up. I'll give her a call!

++rep for always being helpful.
 

Corrado79

New Contributor
Sep 24, 2007
86
4
12
Santa Monica, CA
Have to agree with Diane on this one. I use BizFilings.com (used to use Legalzoom, but they have terrible customer service), but I am an attorney. Granted, I am a litigator and not a transactional/corporate attorney, but I have a basic grasp of the important principals and access to answers should I have questions. I wouldn't recommend Legalzoom or BizFilings to someone without such experience/access.

That being said, if you did the research, know what you need and it's relatively simplistic (e.g., S-Corp for your internet biz, LLC for your RE investment, etc.), you might be able to get away with using one of those companies. But like Diane explained, they only take you so far. There are probably other requirements/implications related to your chosen entity structure of which you are unaware. I'd pay extra for competent advice.
 

Cmbilt

New Contributor
Jan 25, 2008
32
2
9
I totally agree with not using legalzoom.com. They were going to charge my company $600 to register our LLC. Instead we talked with an attorney friend and she gave us the process for free (we took her out to lunch for her help). It might be different for different states, but I will underline the process that we did ourselves without the help of a lawyer.

1. Fill out Articles of Organization with Sec. of State. - $100
2. Send letter to newspaper to run add for 2 weeks (Our attorney friend gave us a pre-formed letter and we simply filled in the blanks) - $40
3. Annual registration of your LLC with Sec of State - $30
4. File EIN number with IRS.gov website for tax purposes - free
5. Corporate Financial book - our attorney friend helped us create this so that we have all the proper documents if we ever get audited - I highly recommend this - $60

These are the steps for my state, but it may be different in other states. Hope this helps. I would reccommend doing it yourself, saves alot of money, if you know how.


Tyler Davis
www.cmbilt.com
 

Bilgefisher

Bronze Contributor
Read Millionaire Fastlane
Aug 29, 2007
1,849
287
73
Aurora, Co
I'd like to ask a new question to this thread.

I am looking to purchase my own home soon as part of my plan. I have never made an offer before. When I make a purchase offer, would a standard purchase offer form from legalhomeforms.com be a mistake? Or should I have a specialist draw this up?
 
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yveskleinsky

yveskleinsky

Bronze Contributor
Speedway Pass
Jul 26, 2007
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A title company can help you draw up a PA- generally for a mcuh reduced fee or for free if you close thru them. ...Are you offering a standard offer or are you getting creative? ...The more creative you are going to get, the more eyes you will want to have reviewing the contract.
 

Bilgefisher

Bronze Contributor
Read Millionaire Fastlane
Aug 29, 2007
1,849
287
73
Aurora, Co
A title company can help you draw up a PA- generally for a mcuh reduced fee or for free if you close thru them. ...Are you offering a standard offer or are you getting creative? ...The more creative you are going to get, the more eyes you will want to have reviewing the contract.
Fairly standard. I haven't selected a property yet, but most are 70% FMV or less. I am trying to minimize the amount down. To do this, I feel two options help me greatly. Offer to finance through them, or VA loan.

Example. One property I am looking at is a bank REO through countrywide. Property is for sale at 124k. (Looked in the windows yest.). FMV is 174k. I would like to offer 114k with no money down finance with them. Worst they can tell me is no.
 

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