• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

Starting an LLC

Status
Not open for further replies.

Jason Barber

Thread Starter
Junior Member
Joined
Feb 16, 2006
Professional Status
Certified Residential Appraiser
State
Michigan
I know some of you have formed your own LLC's over the years. I am submitting my Articles of Organization to start my own LLC this week. Do I need to submit an Operating Agreement with the Articles? Can this be done after the fact? Also, I am designating myself as the "registered agent". Anyone have a good reason why I should not desigate myself?

Thanks in advance.

P.S. - I've also looked into Legal Zoom and similar services to file the paperwork for me, but cannot understand the value added for hiring this out. Seems easy enough to just do this on my own.

JAB
 

CindyR

Senior Member
Joined
Oct 26, 2003
Professional Status
Certified Residential Appraiser
State
Arizona
No reason not to be your own registered agent. You'll just have to accept your own legal notices, subpoenas, etc. which hopefully will not happen very often.
 

RemelD

Freshman Member
Joined
Nov 23, 2007
Professional Status
Real Estate Agent or Broker
State
Illinois
Jason,

Forming an LLC is something you can easily do on your own. Here are a few considerations:

  1. To answer your question, you DO NOT need to file the Operating Agreement (OA) with the Articles of Organization. Typically all you need at the time of application is the Articles of Organization and the Designation of Registered Agent.
  2. Before filing, make sure that the company name you want is available (especially if you are filing by paper). You can usually research this on your state's Secretary of State's web site. In many cases, you can also apply for the LLC online. However, be aware that when you file online you may also have to pay an Expedite or Rush fee. This fee can be upwards of $100 in addition to the regular filing fee. Unless you are in a rush to have the LLC formed, you may be better of holding on to the money and filing by paper.
  3. If you will have a single member LLC (i.e. you are the only "owner") then you won't need an OA for estate purposes because the LLC will be governed by your will or trust, if any. However, if you need to apply for a bank loan in the LLC name, the bank may require an OA - even though it is a single member LLC. If the LLC will be a multi-member LLC (i.e. more than one "owner") then you should have an OA to define ownership, disposition, etc.
  4. You can also obtain a Tax ID (or FEIN) on your own. The IRS has a new online system where you can do this on your own. The process takes about 5 minutes and you get your Tax ID and your SS-4 immediately. You aren't required to have a Tax ID unless you are a multi-member LLC OR you will have employees. However, if you want to open a company bank account, your bank will require a FEIN whether you are single member or multi-member. My advice is to go ahead and get it now. There is no fee to obtain or maintain the FEIN. The IRS link to start this process is http://www.irs.gov/businesses/small/article/0,,id=102767,00.html
  5. For tax purposes, the LLC will be considered a sole proprietorship if there is only one member. In this case, you would report your business income and expenses on Schedule C of your individual tax return. The LLC would be considered a partnership if there is more than one member. In this case, the LLC must file a 1065 and issue K-1 statements to its members. These forms are harmless and easy to prepare. The LLC still does not pay any taxes. Instead, each partner reports his/her share of the income/loss on Schedule E of their individual return.
  6. Finally, keep in mind that many states require you to file an annual report during the life of the LLC. This report is typically just a form confirming that the address, partners, registered agent, etc. are still the same. The kicker is that some states require a fee to file the annual report. In Illinois the fee is $250 (which is very steep IMO). However, if you don't file the report annually (and on time), your LLC can be dissolved or lose its good standing. If Michigan requires an annual report, I HIGHLY recommend that you put the report due date in your calendar with reminders.
That's all I can think of right now. If you have any more questions, feel free to post or PM me. Good luck

~Remel
 

Jason Barber

Thread Starter
Junior Member
Joined
Feb 16, 2006
Professional Status
Certified Residential Appraiser
State
Michigan
THANK YOU Remel !!

That is some very good information and exactly what I was looking for. I have already made sure the name is available at both the State and County level.

This will be a single member LLC so I can see where the OA would not be needed to spell out relationships with partners, voting rights and so on...

As far as the opening a business account with my bank. I spoke with them and they told me I DO NOT need a tax ID or FEIN. They only require my SS # along with the Articles of Org. to open an account for a single member LLC.

However, you make a great point for an Operating Agreement if I ever need to apply for a business loan. At this point, I do not need a loan and am planning on initially funding the LLC with $3000 (enough to avoid service charge penalties).

The annual report is another great point you make. Michigan allows you to file this report electronically, so this shouldn't be too difficult (just remembering to do so as you stated). The fee in Michigan is only $25, ten times less than your state !! :Eyecrazy: It is due by Feb 15 each year, so I will be sure to mark my calendar.

Thanks again for your advise. I feel pretty confident at this point. :icon_mrgreen:

JAB
 

PointerAppraisal

Sophomore Member
Joined
Jul 3, 2007
Professional Status
Certified General Appraiser
State
Ohio
The IRS recently started issuing separate id numbers for both the LLC and the owner of sole owner disregarded LLC's.

I received two numbers.

You should consult an attorney in your state. If you run into a lawsuit later, it may be the best thing you did.
 

VolcanoLvr

Senior Member
Joined
Oct 30, 2003
Professional Status
Certified Residential Appraiser
State
Washington
What's the value of being a LLC, vs just a Sole Proprietor?
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks