I live in the state of New Jersey and according to www.mycorporation.com it would cost me a total of $271.00 for the following:

New Jersey State LLC Formation Fees $100.00
MyCorporation.com LLC Package $149.00
Shipping and Handling $ 9.00
New Jersey State Expediting Fees $ 13.00
-------------
$271.00

But then they also list Recommended Services:
Elite LLC Kit Upgrade $100.00
Corporate Seal and Embosser only $40
Registered Agent Services $139/year

Optional Services:
Prepare IRS form SS-4 $29.00

Does anyone think I need the extra services?

Please give your opinion or as much information you can on LLC.

Thanks.

Do they prepare your articles of incorporation? If they don't all they are doing just file your papers and you can do this yourself by paying only application fees at the office of the secretary of state in your state. In that case you don't even need their basic package. But you do need to draft articles of incorporation and for that you can use a boiler plate or get some cheap lawyer.

Cheap lawyer - hmm... I dunno, oxymoron. While you can find a cheap lawyer you may not be able to find a lawyer who charges a small fee/hr. :stickout

Good Luck!

Originally posted by mantra

Does anyone think I need the extra services?

Please give your opinion or as much information you can on LLC.

Thanks. The SS-4 is just the application for an employer ID number. You can get it from the IRS over the phone for free (but get up early, the phone number will be busy all day).

You don't need a corporate seal, especially for an LLC.

You probably don't need a registered agent. That just means that you designate them as the entity the state will communicate with in any legal matters regarding your company.

I haven't taken the time to look at their site, but I'd assume the "LLC kit" is just a collection of blank documents you could use for meetings and filings. Not really necessary if you're able to invest a little time into exploring the legal requirements on your own.

All they'll do for the $149 package is take the info you put on the form on their site onto a paper form and mail it to the state.

So if you want to make sure, by researching the requirements, that you're not leaving any information out and that you're filing all the necessary forms (you could probably just check with the NJ secretary of state's office, which probably even has a website with all of that information) you probably wouldn't have to spend anything beyond the $100 state fee.

Your call: how much work do you want to do, and how much do you want to pay someone else to do?

Great, thank you for the information.

Do you know which states allow an LLC to be a one person company? I know most say that it has to be 2 or more.

Thanks.

I know Virginia allows one man LLC's. Also you may just want to drop by Office Dept or Office Max, they have an LLC kit for about $29 that has all of the forms and instructions for the stats that allow LLC's. My kit came with a CD that contained all of the forms.

What would be better for a webhosting company?

LLC or INC?

Originally posted by Synergy
What would be better for a webhosting company?

LLC or INC? Depends on the webhosting company. Verio chose incorporation, as did Rackspace. They both seem to be happy with the decision.

Seriously, it's not the case that either one is better for every webhosting company. That it's a webhosting company isn't relevant anyway. Which company structure is best in any situation depends on the tax situation the owners want, how the ownership will be structured (One person? Two? Five now and four more buying in later?), what state you live in, how long you plan to be in business... no end to the variables involved.

In general an LLC is simpler to set up and will involve fewer formalities during ongoing operation. That's the main advantage. The main advantage of a corporation may be its enduring nature: a corporation is an entity itself. It can be an advantage if you'll be seeking startup funding, or even operational loans.

Many small business owners now (the LLC is a recent construct) choose LLC because of its simplicity. That doesn't mean it's always the best choice, though. The best choice, for that matter, might be none of the above: it might be a sole proprietorship, or a partnership. Or a Limited Liability Partnership.

Originally posted by Synergy
What would be better for a webhosting company?

LLC or INC?

I have seen both. My company is an INC but defined as a Sub S Corporation vs. a C Corporation. From what I understand, being a Sub S Corporation enables the owners to the benefits of being a corporation but tax advantage of pass-thru taxation where all profits & losses are claimed on the owner(s) personal tax returns... plus it gives us anadditional tax advantage of not being taxed as a regular corporation - which you could imagine would be higher.

I believe if my company had the chance to do it all over again, they would choose the LLC struture.

Hope this helps...

Chad

Originally posted by gcjeepster
plus it gives us anadditional tax advantage of not being taxed as a regular corporation - which you could imagine would be higher. Generally, no. The current corporate tax rate is a flat 15%

One advantage of C incorporation, in fact, is that lower corporate tax rate. Still, a common strategy used after incorporation is to pay owners of the corporation some amount of money as expenses and such, make some payments as consultants, and avoid paying dividends which would have the disadvantage of "double taxation" -- they are corporate profit and so are taxed at that corporate rate, then are paid to the owners who pay tax at their individual rates.

In general, the complexities of incorporation bring with them the advantage of additional tax management opportunities. But keeping on top of those complexities can be time consuming or expensive. It's part of the tradeoff.

Jeez where did you guys learn all these from? What major covers it?

Originally posted by Synergy
Jeez where did you guys learn all these from? What major covers it? What major in school? Well, I have a Finance degree, followed by some years working in, managing and running businesses. So I've learned most of what I know through osmosis.

Also you can read this stuff by simply going to www.sba.gov. It will tell you to go to your local state's website for some things. (usually www.state.xx.us, where xx is the state.) If you're not intemidated by this stuff, just read it there... That's what I did.

Neofree

Become a LLC in Delaware, it is much less of a headache. You can be a one person LLC and your company is not limited to one area of business. For example our company does hosting but alos does multimedia design under a different name, but the LLC protects that brand also. Look up Business Fillings Inc, they did it for us. We got a seal but you dont need it, it just confirms certaindocuments.

Is this possible?

ABC company becomes a LLC

then ABC made a subdivision EDF....

Does EDF still need to be registered?

znot according to my info. Its not a seperate company, just a division. Sort of like dba's (doing business as).

Originally posted by gcjeepster


I have seen both. My company is an INC but defined as a Sub S Corporation vs. a C Corporation. From what I understand, being a Sub S Corporation enables the owners to the benefits of being a corporation but tax advantage of pass-thru taxation where all profits & losses are claimed on the owner(s) personal tax returns... plus it gives us anadditional tax advantage of not being taxed as a regular corporation - which you could imagine would be higher.

I believe if my company had the chance to do it all over again, they would choose the LLC struture.

Hope this helps...

Chad

Chad, you defined it well. LLC has some good points. One of the best points of an LLc is that you can move partners in and out quickly without having to much headaches. Also you forgot about the 7.5% we save in Social security payments as an S-Corp.

I Myself am an S-Corp. I write off everything ( even suits ), I also lease a car that I write off completely. One of the most important aspects that you have to consider, is the writing of the minutes.
I would advise anybody, spend 350.00 with an account / lawyer and have them do all the paperwork at the same time you will ahve all your tax questions done.

Mantra, if you need a great accountant in Bergen County PM me and I give you his firms number. This guy can do great work.

-Sqposter / Michael

Try living in Canada and forming an LLC. It is a major hassle.

Originally posted by netsolutions
Try living in Canada and forming an LLC. It is a major hassle. I guess you could say that, since Canada doesn't have a separate LLC construct. But the term is sometimes used to refer to a corporation, and incorporation in Canada is pretty straightforward. You can do it either with the Companies Branch in Ontario, or federally with the Corporations Directorate.

Unless you mean living in Canada and forming an LLC in the US. Yeah, that'd be a hassle.

Originally posted by sqposter


Chad, you defined it well. LLC has some good points. One of the best points of an LLc is that you can move partners in and out quickly without having to much headaches. Also you forgot about the 7.5% we save in Social security payments as an S-Corp.

-Sqposter / Michael

Any easy in/out for partners is ideal UNLESS complete trust can be given to all partners/owners.