Originally Posted By: Ron Dawes This post was automatically imported from our archived forum.
My son and I passed our Texas inspection exam yesterday and will soon be starting up a part time (for now) inspection business. I am considering forming the company as a Texas LLC. Any words of advice from others who have gone this route or if you did not and used a standard corp or simple sole proprietor form, why? Thanks.
Originally Posted By: Terry Porter This post was automatically imported from our archived forum.
I will be very interested in watching the replies as I am looking at the same thing.
From everything I can find, the only drawback to forming an LLC is the increased initial costs. This industry, like many, seems to deal with a litigious society. Due to that fact there is no way I'm going into it as a sole prop. To much risk allowing someone else the opportunity to take what I've worked hard to get.
Originally Posted By: psmothers This post was automatically imported from our archived forum.
I was in the same boat myself. I went and talked to my CPA first and she told me that basically tax wise, for my condition, that either would be about the same. I then talked to a good friend of mine who is a tax lawyer and also has set up many LLC’s. He told me to go ahead and spend the money and LLC. Many will argue that it really does not give you much more “coverage” then a sole proprietorship. As my lawyer friend advised me “at least it is some coverage.” Remember that this good friend of mine who has nothing to gain either way. He gives me advise but we keep it to that in order to always maintain our friendship over business.
So if you decide to go LLC you have three choices of which path to follow.
1)File your paperwork all by yourself. Your state Secretary Of State's Office has the standard articles of incorporation for you state. By doing this you will only pay the state incorporation fee. In Louisiana it is under $150. My lawyer friend recommended that I do not go this route because the standard Louisiana articles of incorporation have some legal holes in them.
2)Pay a lawyer to do it for you. This by far is the most expensive way. You will have to price it out in your area. The upside is that lawyers usually have very solid articles of incorporation without holes in them. I would say if you can find someone under $500 in your area to do it then do it. Here I was quoted $900 - $1200.
3)Do it online. There are many online sites that are popping up for people to do various simple legal paperwork such as LLC. This is the way I went. I used legalzoom.com. It cost me right at $200 which included my state filing fee. Go with the cheapest package they have. Everything else in it is fluff that you can do cheaper. It took about 25 days to process. You can pay twice as much and have it done twice as fast but I would not waste the money. Whichever way you go do not pay anyone to get you an EIN. (Federal Tax ID Number) You can to that by yourself for free and at no cost. Look here.
http://www.biztaxadvisor.com/federal-tax-id-number.html
Anyway hope that helps. You should also search through the different forums here. I know there has been much talk about this in the past.
-- Foxe Smothers
"Its not a matter of will we rebuilt it is matter of how soon..."
"A hero is no braver than an ordinary man, but he is brave five minutes longer."
- Ralph Waldo Emerson
Originally Posted By: rchoreyii This post was automatically imported from our archived forum.
Forming an LLC helps to protect your personal assets in case you get sued. I have a single onwer LLC here in New mexico. I used The Company Corporation http://www.incorporate.com/ They wer relativly inexpensive, the fee includes them as your agent the first year. Best of all it was pretty easy, as I am not a lawyer and was trying to get the business going and didn’t have time to talk to lawyers and such. Recommend you check their web site out.
Originally Posted By: psmothers This post was automatically imported from our archived forum.
Ron you should change them from your LLC’s registered agent ASAP. Basically they will get the call first if you get sued. Personally I would rather the piece of mind to know that I will get the call myself and not a .com company that might be out of business. Just a thought.
– Foxe Smothers
"Its not a matter of will we rebuilt it is matter of how soon..."
"A hero is no braver than an ordinary man, but he is brave five minutes longer."
- Ralph Waldo Emerson
Originally Posted By: ccoombs This post was automatically imported from our archived forum.
I’ve used The Corporation Company twice. I didn’t use them as the agent because of the annual fee (after the first year).
As it has been explained to me, the main difference between LLC and a corporation is documentation. LLC's don't require annual meetings and are much more "informal" regarding documentation. However, in California, you can't have multiple owners of a company without the same license (example: engineers or architects). If Texas requires HI's to be certified and the same restrictions apply you may want to reconsider. Say one of the owners dies, can their ownership be passed onto a spouse or family trust? I know that shares in a corporation can.
When I used The Corporation Company they also provided lots of books on how to run and maintain the documentation. The books have been very helpful...although I haven't had much time to actually read all of them.