Is an LLC a Corporation (What’s the difference?)

As a new business owner, chances are pretty good everyone and their brother has lined up to give you a piece of advice. Don’t form an LLC, you want to form a corporation instead. Corporations are to complex, go with an LLC instead. Sound familiar? While all this advice can be helpful, it can also be confusing. One of the biggest questions new business owners and aspiring business owners email me at sam@mollaeilaw.com and ask is: is an LLC a corporation? The answer is no. An LLC and a corporation are two different types of business entities. It is up to you to look at the pros and cons of an LLC vs a corporation and decide which one is right for your business venture.   LLC vs. Corporation: What’s the Difference? Apart from a sole proprietor, all other business organizations must register as a specific type of business such as a corporation, LLC, or partnership in the state the business is located in. As a new business owner trying to decide which one is right for you can be …

Incorporation Documents

The biggest downside to establishing a business in the United States is the paperwork. There’s a lot of legal documents you are required to have regardless of what type of business structure you decide to set up. As an experienced business lawyer, you can contact me at sam@mollaeilaw.com and I can help you with some of the more confusing paperwork. More importantly, I can make sure you have all your documentation in order.   New Company Document Requirements Regardless of what type of business structure you decide to form, there are four main areas of documentation you need including formation, governance, ownership, and taxation. Keep reading for a break down on some of the key documents you need as well as an explanation of what they are.   Corporation To establish a corporation in the United States, there is one optional and four essential documents you need including the articles of incorporation, bylaws, minutes, shareholder agreements, and shareholder certificates.   Articles of Incorporation Whether you file a general, close, benefit, or non-profit corporation, you will receive a certificate of incorporation …

3 Most Important Benefits of Wyoming LLC (& Why You Shouldn’t…)

“What are the benefits of a Wyoming LLC?” I get this question asked ALL THE TIME (especially from my non-US clients). If you’re a U.S. resident, you should definitely form your LLC in the state where you’re physically located. However, if you’re not physically located in the U.S. and won’t be doing business in the U.S. then you have a choice of where you can form your LLC… in this case, I definitely recommend forming your LLC in Wyoming. Short answer: you should register your LLC in the state where you are doing business (the state where you have physical presence). For example, if you will be operating your business in California, then we should register your LLC in California. However, if you are not planning to have physical presence in the US (meaning that you will be operating solely from OUTSIDE the US), then we should form your LLC in Wyoming, the best and cheapest state for non-US residents. Wyoming LLCs offer the best asset protection laws, no state or capital gain taxes, very low annual fees of $50, anonymous ownership (member names …

S Corp Requirements (What You Shouldn’t Forget Before Forming!)

If you’re looking to start an S Corporation, you should understand the requirements of starting an S Corp. You have a business idea swimming in your head you want to pursue. Great… If you’ve never established and managed a business before you are quickly going to discover there are a lot of steps to take before you can just run with that business idea of yours. For most, S Corporation is the best business type if you’re a self-employed entrepreneur. With an S Corporation, you would be able to avoid self-employment tax which save you usually around 15.3% of your income. If you have a business that generates a nice profit over and above what you would consider reasonable compensation for the services that the owners provide, you may be unnecessarily subjecting the profits to self employment taxes if you are operating as an LLC taxed as a partnership. Wondering what an S Corp is and what requirements there are for your business to form as an S Corp? For example. S Corp can’t have more than 100 shareholders and …

Can I Be My Own Registered Agent? (Pro’s and Con’s)

As a business lawyer, one of the biggest questions people email me and ask is… can I be the Registered Agent of my own business? If you’re looking to start an LLC or S-Corporation, you will need to designate a Registered Agent. A registered agent is your company’s official contact person and is required for every registered business in every state. Most states don’t allow your LLC to serve as its own agent, but you can personally serve if you meet state requirements. It’s best, however, to choose a third party who’s always available to receive important documents. In addition to receiving important mail from the state, Registered Agent services track important tax filings, reporting, and compliance deadlines, ensuring your business meets regulatory requirements. Registered Agent also receive a summons and other court documents. Having a Registered Agent reduces the likelihood of missing important filing deadlines and facilitates service of process to keep you from being served a summons in front of clients and employees. Third-party registered agents are ideal Registered Agents if you want to protect your personal contact …

How to End a Business Partnership [+ Formal Agreement]

A business partnership is like a marriage. When things go well it can make your life so much better, but when it’s time to end you’ll be wishing you had a prenup. Having a partnership dissolution agreement in place in the partnership agreement or written during the dissolution of a partnership does so much for you and your business. Not only does it protect you from liability, it affects your future credit score and keeps your personal and business assets safe. Still, what is a partnership dissolution agreement? How do you write a partnership dissolution agreement? Can you dissolve a partnership without one? I’ll answer these questions and more in the article below. Contact me today at sam@mollaeilaw.com with any other questions you have about how to write and use a partnership dissolution agreement to protect you and your business.   What is Partnership Dissolution? A Partnership Dissolution happens when a partner leaves the business, thus ending the partnership. There are a lot of reasons where a partner might voluntarily leave the business, such as entering into a new business …

Multiple Businesses Under One LLC (Is This Safe? Should You or Not?)

If you have 2 businesses, you’re probably wondering whether you should operate multiple businesses under one LLC… Or after successfully managing one LLC company, you would sometimes want to expand yourself into a second business venture while holding onto the first one. This is especially true if you’ve caught the entrepreneurial bug and have several business ideas floating around in your head. The question becomes… can you operate several businesses under one LLC? The simple answer is yes, you can operate multiple businesses under one LLC. However, just because you can do something doesn’t mean you necessarily should. By operating multiple businesses under one LLC, you expose one business’s liability onto the second business. So be careful about doing this. Before you make a decision, if you have any questions about this, email me sam@mollaeilaw.com to discuss your current business and your future business ideas to determine whether operating multiple businesses under one LLC is right for you.   How to Structure Multiple Businesses Legally, you have three options for structuring multiple businesses. Unfortunately, there isn’t one clear cut option better …