I picked up the "Articles of Organization for Limited Liability Company From and Instructions" from:
http://www.dat.state.md.us/sdatweb/sdatforms.html
The fee will be $100.00.
Serious money for my tiny firm. The 20% holdback from my fees has been a good idea as it gives me the money needed for expenses like this.
The form looks simple enough.
(1) Name of LLC. (must include "LLC" in the name)
(2) Purpose of the LLC. (One or two sentences describing the business).
(3) Address of the LLC.
(4) Name and address of the "resident agent" who accepts "service of process" for the LLC. (must be a Maryland adult citizen.)
(5) Signature of an adult authorized by the persons forming the LLC. (Kids can form LLC's!)
(6) The "Resident agent" signs.
(7) Return address for any correspondence regarding this filing.
I'll pull the trigger soon. I would like the flexibility of adding customers who are not intimate friends even if I don't plan to expand immediately.
Paraphrasing Louis Pasteur: "Chance favors the prepared mind."
Thursday, April 10, 2008
Tuesday, April 8, 2008
The skinny on LLC's
It appears I need to "file articles of LLC formation or articles of organization with the state government agency in charge of corporations and limited liability companies" with Maryland's secretary of state office's "Corporation Division" or "Corporations Division."
Teh same web site strongly suggested an "Operating Agreement" which describes how the LLCs owners, or members, relate to each other and to the LLC. That'll be pretty easy: ME.
And confirming the reason behind making an LLC:
"With an LLC as the business owner, so says my attorney friend, the "worst case scenario" is liquidation of the LLC and the people who own the LLC lose what they’ve invested in the LLC.
Without an LLC, the business owner’s "worst case scenario" if there’s a "slip and fall" accident is that the owner can lose almost everything they own. In other words, the business owners could lose not only their investment in the business but many other assets as well.
An LLC may need to print new letterhead, business cards, and envelopes that use the new LLC’s name in order to show the world that you’re now operating as a limited liability company. (Not a problem since I have none of these made for First Stop Tech yet.)
Finally, an LLC can save the owners thousands of dollars a year in income or payroll taxes.
As to why one sets up C and S corporations:
"A C corporation, for example, often lets businesses provide rich tax-free fringe benefits to employees including shareholder-employees. And an S corporation often lets a business dramatically reduce the self-employment, social security and Medicare taxes paid on the owner’s profits"
Something to keep in mind if the company someday makes more money than I know what to do with.
Why wouldn’t every business use an LLC or limited liability company?"
Perhaps predictably, there are some costs and headaches associated with operating as an LLC. While the bank account for a sole proprietorship may be free, a limited liability company probably won’t be. The bank may charge $10, $20, or more each month.
An LLC probably needs to file its own tax return if the LLC operates as a partnership, a C corporation or an S corporation. (Not applicable to me, a sole proprietor and filing as such)
Okay, I'm sold.
Let's get it done.
Google "Maryland LLC application....Bang!":
http://www.dat.state.md.us/sdatweb/sdatforms.html
Sources:
http://www.buzzle.com/editorials/12-23-2005-84744.asp
http://www.buzzle.com/editorials/12-23-2005-84745.asp
Teh same web site strongly suggested an "Operating Agreement" which describes how the LLCs owners, or members, relate to each other and to the LLC. That'll be pretty easy: ME.
And confirming the reason behind making an LLC:
"With an LLC as the business owner, so says my attorney friend, the "worst case scenario" is liquidation of the LLC and the people who own the LLC lose what they’ve invested in the LLC.
Without an LLC, the business owner’s "worst case scenario" if there’s a "slip and fall" accident is that the owner can lose almost everything they own. In other words, the business owners could lose not only their investment in the business but many other assets as well.
An LLC may need to print new letterhead, business cards, and envelopes that use the new LLC’s name in order to show the world that you’re now operating as a limited liability company. (Not a problem since I have none of these made for First Stop Tech yet.)
Finally, an LLC can save the owners thousands of dollars a year in income or payroll taxes.
As to why one sets up C and S corporations:
"A C corporation, for example, often lets businesses provide rich tax-free fringe benefits to employees including shareholder-employees. And an S corporation often lets a business dramatically reduce the self-employment, social security and Medicare taxes paid on the owner’s profits"
Something to keep in mind if the company someday makes more money than I know what to do with.
Why wouldn’t every business use an LLC or limited liability company?"
Perhaps predictably, there are some costs and headaches associated with operating as an LLC. While the bank account for a sole proprietorship may be free, a limited liability company probably won’t be. The bank may charge $10, $20, or more each month.
An LLC probably needs to file its own tax return if the LLC operates as a partnership, a C corporation or an S corporation. (Not applicable to me, a sole proprietor and filing as such)
Okay, I'm sold.
Let's get it done.
Google "Maryland LLC application....Bang!":
http://www.dat.state.md.us/sdatweb/sdatforms.html
Sources:
http://www.buzzle.com/editorials/12-23-2005-84744.asp
http://www.buzzle.com/editorials/12-23-2005-84745.asp
Monday, April 7, 2008
Check It Out
The business checks and endorsement stamp arrived.
The checks are a simple beige.
The stamper works just fine, I've endorsed two checks so far.
The checks came 3 to a page, 600 pages. Not 600 checks. I have 1800 checks.
If I use them all, I'll be well on the way to micro-mogul status.
The 150 checks for 40- dollars at my bank may have actually been for 450 then. Still triple the checks for 10 dollars more is a steal and Wal-Mart threw in a free binder.
So far, I'd recommend them to business owner wannabes.
Still investigating legal protection before I look for more work opportunities for the business.
Small side jobs are coming in faster than I want to handle them anyway.
My second customer has, unprompted, started writing checks to the company name.
I really only have three steady customers. It has to stay that way for now. I need teh legal protection before I expand.
The checks are a simple beige.
The stamper works just fine, I've endorsed two checks so far.
The checks came 3 to a page, 600 pages. Not 600 checks. I have 1800 checks.
If I use them all, I'll be well on the way to micro-mogul status.
The 150 checks for 40- dollars at my bank may have actually been for 450 then. Still triple the checks for 10 dollars more is a steal and Wal-Mart threw in a free binder.
So far, I'd recommend them to business owner wannabes.
Still investigating legal protection before I look for more work opportunities for the business.
Small side jobs are coming in faster than I want to handle them anyway.
My second customer has, unprompted, started writing checks to the company name.
I really only have three steady customers. It has to stay that way for now. I need teh legal protection before I expand.
Tuesday, April 1, 2008
TA Name locked in.
My contact at Personal Property hipped me to the web page:
http://sdatcert3.resiusa.org/UCC-Charter/CharterSearch_f.aspx
Here you can use that L number received from the personal property form and search for the status of your TA name.
The "Active" means First Stop Tech is a proper business in the eyes of Maryland.
I passed this info on to PNC bank so my business account in limbo is locked in.
Now I can get around to the liability protection in earnest.
Establishing a small fund in the bank account for business purposes, I have assigned myself a pay rate of 80% of the hourly rate I charge.
I can give myself a raise once the fund is reasonably flush.
I have purchased some equipment for the business and I can reimburse myself with this money.
This is where the accounting can get confusing and I'll need to educate myself on keeping books. If things get hairy, I've got a pro in mind.
http://sdatcert3.resiusa.org/UCC-Charter/CharterSearch_f.aspx
Here you can use that L number received from the personal property form and search for the status of your TA name.
| (Dept. ID) | Entity Name | Entity Detail | Status | ||
| (L12395521) | FIRST STOP TECH | Personal Property | ACTIVE | ||
The "Active" means First Stop Tech is a proper business in the eyes of Maryland.
I passed this info on to PNC bank so my business account in limbo is locked in.
Now I can get around to the liability protection in earnest.
Establishing a small fund in the bank account for business purposes, I have assigned myself a pay rate of 80% of the hourly rate I charge.
I can give myself a raise once the fund is reasonably flush.
I have purchased some equipment for the business and I can reimburse myself with this money.
This is where the accounting can get confusing and I'll need to educate myself on keeping books. If things get hairy, I've got a pro in mind.
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