Newbie questions on LLC for a small home based business

[jm888c]

Background:
* I am married and am living in NV
* I am out of work and hope to find a full time job within the year.
* I want to start a LLC so that I can sell online software services and get programming contract jobs. It will be a home based business.
* The projected income for the 1st year is ~$200 per month from the online software services and $0 from programming contracts (in this economy).

Goals:
* protect personal/family asset
* maximize tax advantages
* keep paperwork to the minimal
* keep expense to the minimal; willing to spend more when more revenue comes in.
* keep the structure and setup simple to maintain at first.
* The structure should be flexible enough that I can implement fancy strategy, with experts' help, when more revenue comes in.

Questions:
1. Should the LLC be a single member (i.e. me only) or multi-member (i.e. me and my wife)? One consideration is the loan/lease payment to avoid self-employment tax. Can someone verify that a couple forming a LLC would still be treated as a partnership for the LLC's tax status?

2. Is it a good idea to have your married wife as a member of the LLC? Some people say that you are just putting your wife at risk... one more way for her to get sued, by being a member of a LLC.

3. For a single member LLC, is it better to do member managed or manager managed LLC?

4. For operating agreement, is it really worth the $ to put a lawyer to draft it for me? Or is it just about the same as getting one from a book or off the Internet?

5. Do I need to file the operating agreement with the NV state?

6. Do I need to have the registered office (resident agent) do record maintenance? Is it OK to have a binder of those required statements at my home (principal place of business?)?

7. There are so many services that resident agents and online sites are selling. Which services are really essential? It seems silly to start up a new business with no steady income but with several hundreds monthly expense.

Thanks so much!

 

[Micheal_thomas]

That's a nice post. Thank you for sharing.The business plan acts as business guide for those who want to go into any form of online money making business.A business plan assists you to make major decisions concerning your business therefore there are no set information that is included. Business objectives that you set out to achieve and the prospective customers your business is targeting will settle on the information that you have in your plan

 

[Munchieman]

Hello from Nevada!

Hello JM,
I am also from Nevada. I'll answer as much of this as I can. I have set up many LLCs, but each is different.
There is a website Guru . Com (I'm not yet able to post links) I use the services on that site a lot.

Questions:
1) I think this is a question for an accountant. Have you filed for you EIN yet? Last time I did that, it gives you the option to choose how you are taxed. LLC's are pass-through entities, so the profit or loss is seen on your personal taxes. I'm not sure how you plan on avoiding the Self Employment tax unless you are going to pay yourself a wage. Then, the LLC will have to pay Payroll taxes in about the same amount as the Self Employment tax. If your LLC experiences a LOSS for the year, then that loss is passed on to your personal taxes.

2) I'm not sure how that would be one more way for her to be sued. If the LLC is sued, they will probably try to sue her too regardless if she is a member or not. I think the real question for you is this, is she at risk of being sued, and having her potential ownership in the LLC taken?

3) I have been asking this question for years! If there are only 1 or 2 members in the LLC, it probably doesn't make any difference. If you were going to have a great deal of members, then you would want to take the Manager option.

4) Most small companies can use the boiler plate OAs. I have some that you can use. Don't know how to get them to you on this forum though.

5) No. The Operating Agreement is kept with your corporate records. The only things you will probably have to file with the Secretary of State are your Articles of Organization to set up the LLC, The initial list of members/manager, and the annual list of members/managers.

6) Get a binder for your LLC. Put your Articles of Organization, List of Officers, and other CORPORATE documents in it. It should be kept at the address you set as your resident agent. If you are a home based business, then keep it at home, with yourself as the resident agent, and your home address as the registered agent address. The only thing a resident agent is required to do is receive Process Service if your company is sued. If you have any official meetings, you want to keep the minutes of the meeting in this binder as well. Meetings and minutes are not required in an LLC like they are for a Corp, but its good practice anyways.

7) You don't need any of those services that are out there. Follow the basic steps, and make sure you keep everything up to date.
1) Annual list. SO many people think that once they file, they are done. The state wants their $125 EVERY year!
2) Get an accountant. If you are good, and you use the website I gave you at the beginning, you will make more than $200 a month!
3) Get your EIN. It's quick and easy from the IRS website. You'll have it in seconds.
4) Build business credit. This begins with a DUNs number from Dun and Bradstreet. After that, start with an Office Depot card. Pay your bills before they are due.
I added the last step because I always plan to be successful. You'll need credit once you are successful!
I'm not an attorney. The attorneys on this board could probably give some better answers to these questions, especially questions 2 and 3.
If there is a way to contact in Private, I can send you a boiler plate OA. I'm not big on putting email addresses out publicly.
Brian