{"id":396,"date":"2020-08-04T20:03:50","date_gmt":"2020-08-05T00:03:50","guid":{"rendered":"http:\/\/www.new.waltercounsel.com\/blog\/?p=396"},"modified":"2024-08-21T12:32:50","modified_gmt":"2024-08-21T16:32:50","slug":"a-simple-diy-guide-to-starting-up-an-llc","status":"publish","type":"post","link":"https:\/\/waltercounsel.com\/?p=396","title":{"rendered":"A Simple DIY Guide to Starting Up an LLC"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><strong>THIS POST HAS BEEN SUPERSEDED.<\/strong><\/p>\n\n\n\n<p class=\"has-luminous-vivid-orange-color has-text-color wp-block-paragraph\"><strong>Please note the \u201csimple\u201d in the title.<\/strong><\/p>\n\n\n\n<p class=\"has-luminous-vivid-orange-color has-text-color wp-block-paragraph\">Look, I know that you want to save money and do it yourself. But this may be penny-wise and pound-foolish; there are nuances and details you may miss. Think about engaging a lawyer.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">There are lots of different types of entities and lots of different states. We\u2019re going to stick to limited liability companies, for now, as most new entities are LLCs. We\u2019re also going to stick to New Jersey, as that\u2019s where I usually sit.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"alignright size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"150\" height=\"150\" src=\"http:\/\/www.new.waltercounsel.com\/blog\/wp-content\/uploads\/2020\/08\/blocks-2bw-150x150-1.jpg\" alt=\"\" class=\"wp-image-397\"\/><\/figure>\n<\/div>\n\n\n<h4 class=\"wp-block-heading\"><strong>From Soup to Nuts<\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">There are five basic steps that should be taken in setting up an LLC:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Name<\/li>\n\n\n\n<li>Formation<\/li>\n\n\n\n<li>Tax ID<\/li>\n\n\n\n<li>Registration<\/li>\n\n\n\n<li>Operating Agreement<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">If you feel uncomfortable doing any of this, consult a lawyer. (That\u2019s what we\u2019re here for.) In any event, I would highly recommend having a lawyer prepare your operating agreement.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"alignright size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"150\" height=\"150\" src=\"https:\/\/waltercounsel.com\/defiant\/wp-content\/uploads\/2020\/09\/blocks-orange.jpg\" alt=\"\" class=\"wp-image-538\"\/><\/figure>\n<\/div>\n\n\n<h4 class=\"wp-block-heading\"><strong>The Name<\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">First you\u2019ll need to pick a name for your LLC.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Your name is something indicates that identifies and distinguishes your goods or services. It\u2019s your brand.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It\u2019s beyond the scope of this post to go too much into the details of trademarks and tradenames. Generally speaking, if you wish to have trademark protection for the name of your LLC, you need to avoid names that are purely generic names, such as Computer, or descriptive names, such as Teledoctor. You can combine these words with other words and probably get protection.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Ok, pick a name.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Then Google it to see if anyone else is using the same or similar name. Even if they are, you may be able to use your pick, if you\u2019re in different markets or supplying different goods and service.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Next, check the name at the <a href=\"http:\/\/www.uspto.gov\/trademarks-application-process\/search-trademark-database\" target=\"_blank\" rel=\"noreferrer noopener\">United States Patent and Trademark Office<\/a>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">These are good starting points. But they may not be enough to fully show whether others are using the same or similar names. So, think about hiring a service to do a more comprehensive search and a lawyer to evaluate the search. These services can search all fifty states\u2019 filing offices, and all sorts of publications, including ones you\u2019ve never heard of.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>The Formation<\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Now, grab your credit card and your web browser and head over to the <a href=\"https:\/\/www.njportal.com\/DOR\/BusinessFormation\/CompanyInformation\/BusinessName\" target=\"_blank\" rel=\"noreferrer noopener\">NJ Business Gateway Services<\/a>. Answer some simple questions, pay your fee and you\u2019re set. You\u2019ve formed an LLC.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>The Tax Identification<\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Next, surf over to the <a href=\"https:\/\/www.irs.gov\/businesses\/small-businesses-self-employed\/apply-for-an-employer-identification-number-ein-online\" target=\"_blank\" rel=\"noreferrer noopener\">Internal Revenue Service<\/a> site and get a tax identification number or EIN. No charge for this. (I guess the IRS actually wants you to pay your taxes.)<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Registration<\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">In New Jersey, you must register your LLC in addition to forming it. Go to the <a href=\"http:\/\/www.nj.gov\/treasury\/revenue\/gettingregistered.shtml\" target=\"_blank\" rel=\"noreferrer noopener\">Online Business Registration Service<\/a> and be prepared to answer a series of questions about the business of your LLC. You\u2019ll also need your EIN and the 10 digit number you received when you formed the LLC. (You can do the registration by snail mail, but why bother?)<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Operating Agreement<\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">If you\u2019re a single member LLC, you don\u2019t need an operating agreement (at least, at first). Otherwise, you do.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The New Jersey statute on limited liability companies provides default provisions on how an LLC is run and the relative rights and powers of its members (owners). More than likely, these provisions will not reflect the understanding of the members or their needs. You need an operating agreement to do this. And though the statute allows for oral agreements, the agreement should be in writing. As Sam Goldwyn said, \u201cA verbal contract isn\u2019t worth the paper it\u2019s written on.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Don\u2019t cut corners. The operating agreement will govern your LLC; it will address capital contributions, distribution of cash flow, voting rights and management. It will tell you what happens when a member dies or when a managing member needs to be removed or replaced. It will limit transfers of membership interest and explain how to admit new members.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">You may be tempted to save money by using online services or finding online forms or by cobbling an agreement together from found forms. This is not a good idea. Spending a little now may save you a lot later.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Any questions? Contact me.<\/p>\n\n\n\n<p class=\"has-text-align-right wp-block-paragraph\">Alan N. Walter<\/p>\n","protected":false},"excerpt":{"rendered":"<p>THIS POST HAS BEEN SUPERSEDED. Please note the \u201csimple\u201d in the title. Look, I know that you want to save money and do it yourself. But this may be penny-wise and pound-foolish; there are nuances and details you may miss. Think about engaging a lawyer. There are lots of different types of entities and lots &#8230; <a title=\"A Simple DIY Guide to Starting Up an LLC\" class=\"read-more\" href=\"https:\/\/waltercounsel.com\/?p=396\" aria-label=\"Read more about A Simple DIY Guide to Starting Up an LLC\">Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10,3,85],"tags":[16],"class_list":["post-396","post","type-post","status-publish","format-standard","hentry","category-contracts","category-corporate","category-startups","tag-llc"],"_links":{"self":[{"href":"https:\/\/waltercounsel.com\/index.php?rest_route=\/wp\/v2\/posts\/396","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/waltercounsel.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/waltercounsel.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/waltercounsel.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/waltercounsel.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=396"}],"version-history":[{"count":4,"href":"https:\/\/waltercounsel.com\/index.php?rest_route=\/wp\/v2\/posts\/396\/revisions"}],"predecessor-version":[{"id":1676,"href":"https:\/\/waltercounsel.com\/index.php?rest_route=\/wp\/v2\/posts\/396\/revisions\/1676"}],"wp:attachment":[{"href":"https:\/\/waltercounsel.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=396"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/waltercounsel.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=396"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/waltercounsel.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=396"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}