Forming an LLC Online – MyCorporation, LegalZoom & IncorporateTime

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Why form an LLC?

Congratulations! You're on the way to creating your own business and you want to form an LLC (limited liability company)! They're great for smaller companies with fewer owners than larger businesses. LLCs are simpler to maintain and are more flexible in terms of economic and management structure.

Here are the main benefits of forming an LLC rather than a corporation:

· You can protect your personal assets, like your home and bank accounts, with the liability protection; sole proprietors have unlimited liability for business debt and creditors can take away your retirement savings and all of your property and even some of your spouse's. In these days of a risky economy and apt-to-sue consumers, you really want to make sure you have protection. Thus, by creating an LLC, you can ensure there is a divide between personal and business assets to avoid having your personal property affected by your business.

· Forming an LLC is also great in the expenses you can avoid. Business expenses, such as your salary, can be deducted from your LLC's profits, even before the members can touch the income. For tax purposes, the LLC is not considered a separate tax entity from its owners; a corporation, on the other hand, is considered separate. Because of this, your business' income ends up with the LLC members, who report their own profits and losses on their individual tax returns. Also, for tax purposes, LLCs with more than one member is considered a partnership. The tax advantage of LLCs over corporations is great because of how flexibly profits are allocated among members. The allocation is up to the LLC owners, whether they wish to divide profits up by percentage of ownership or not.

· Forming an LLC is beneficial in that you are less likely to be audited. Sole proprietors are much more likely get a tax audit because they often file their returns themselves and incorrectly... they usually underreport revenue or overreport deductions. Thus, the IRS has audited more sole proprietor tax filings than corporation ones.

· You establish great credibility with consumers. Forming an LLC gives off a professional air and shows the company is legitimate.

Business Advice: How to Form an LLC

Incorporate Your Business

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The best online options

Check out these three popular methods for creating an LLC (often cheaply!). Look over this list to compare and contrast the differences between these companies and see which one fits your needs best. Good luck with your LLC!

MyCorporation®

MyCorporation® is the well-known provider of online document filing services from the makers of QuickBooks. Backed by the trustworthy finance guys at Intuit, its document filing and financial management experts have helped thousands of small businesses and investors incorporate their companies for almost 10 years. Some of its services include searches and applications for trademarks, copyright registrations, DBA registrations, registered agent services and more (although it emphasizes that it is merely a document filing service and can't provide legal or financial advice). Also, it offers the chance to speak with document filing experts, consultants and accountants. MyCorporation® aims to streamline the document filing process throughout the process of forming your LLC and claims to help save time and money by using them to form an LLC. While lawyers charge $200 to $266 an hour, their lowest document filing service starts at $149. It's beneficial in that you can purchase whatever services and products you want and need and nothing more. Many of their services are free, too. While it mentions you could file all the documents yourself, it also encourages that you use their service.

MyCorporation® will file all the right forms with the right agencies, based on which state you live in, so you don't have to. Each state has different regulations and timeframes for processing documents... it's usually 2-7 weeks. (There is a rush filing service as well, the quickest way for your documents to be filed... your documents are hand-delivered to the Secretary of State's Office to be filed immediately, and your final package is shipped to you through Next Day UPS. It takes about 5-10 business days in all!) Also,

MyCorporation® takes care of the interactions with the agencies and representatives and will let you know what's going on along the way, always by phone and by e-mail when it's appropriate. And if you decide to back out on forming your LLC, you can request a refund (minus the processing fee).

It's easy to form your LLC because you just have to get a hold of the order form on the site. This order form has the details on the state regulations for forming your LLC and processing documents, include how long the process will take. If you need help along the way, MyCorporation® has customer service specialists on hand from Los Angeles, California.

If you need to order business licenses (these are mandatory and the type depends on what kind of business you are forming), then you can order it through MyCorporation.

If the information on the Web site isn't enough, MyCorporation® offers a library with lots of details on how to form your LLC. This way, you can take a look at the different entity types if you're not sure what kind of business you want to start or if you need more information to start.

To start with the process, you go on their Web site, click on the link that says "Form an LLC or Incorporate with MyCorporation," click on the buttom "Form an LLC Today," then fill out the form on the next page that asks for the state you're filing in and whatever services you want to pay for. These include:

· MyCorporation® Filing Services (with the LLCPack® included) - $149

· Shipping and handling (UPS Ground Delivery) - $19

· State Filing Fees: Standard State Filing Fee - $120

MyCorporation® Rush Service - $320

· Annual Report and Statement of Information (including the $29 fee for priority shipping and handling) - $98

· Registered Agent Services (with one year prepaid) - $159

· Obtaining a Federal Employer ID Number - $69

· Elite LLC Kit and Embosser - $100

· Delayed Filing Option - Free

· QuickBooks Simple Start Free Starter Edition (for Microsoft® Windows 2000/XP/Vista) - Free

The required fees include the MyCorporation® service fees, shipping and handling, and the standard filing free, all for $288!

LegalZoomTM

LegalZoomTM is another easy and less expensive way to form your LLC. Created by a group of prestigious attorneys and legal experts, including retired judges and law school professors, LegalZoomTM makes it faster and simpler to incorporate your company and start a business, register a trademark, create estate-planning documents, create a will and living trusts, and more! The documents and forms were developed by experienced and trusted legal figures so that they are dependable and as simple to fill out as possible.

Additionally, LegalZoomTM is endorsed by Bill O'Reilly, the popular TV personality, and Laura Ingraham, policital commentator and talk show host

To form an LLC with LegalZoomTM , there are three steps to take:

1. Fill out the online questionnaire. This is simple and shouldn't take too long to complete.

2. Let LegalZoomTM look over your answers so they can prepare the appropriate LLC documents and file them with the Secretary of State

3. Receive your final LLC package in the mail!

The LLC packages you receive through LegalZoomTM vary in items and price, depending on which package you want:

Economy - The basic LLC package

$139.00 (plus state fees)

Includes:

· Basic LLC Package

· Preliminary check of your business name to confirm that it is available

· Preparation and filing of your Articles of Organization

· Customized operating agreement

Standard - The basic LLC package and the most popular options

$249.00 (plus state fees)

Includes:

· Preliminary check of your business name to confirm its availability.

· Preparation and filing of your Articles of Organization

· Customized operating agreement

· The deluxe LLC Kit and Seal

· Over 40 business forms on CD-Rom

Express Gold - the all-inclusive rush package

$369.00 (plus state fees)

Includes:

· A preliminary check of your business name to confirm it is available

· Preparation and filing of your Articles of Organization

· Customized operating agreement

· The deluxe LLC Kit and Seal

· Over 40 business forms on CD-Rom

· Priority Rush service (7-10 business days)

· Tax ID preparation

LegalZoomTM claims that you can save $1,491 by using their services, as a lawyer would charge you around $1,740 for a standard LLC package.

Some of the optional services you can purchase through LegalZoomTM include:

· Preparation of a Federal Tax ID Application - $30 (which is included in the Gold Package)

· Obtaining a Tax ID Number from the IRS - $79 (or $49 with the Gold Package)

· The Registered Agent Fee - $149 per year

· Professional LLCs - $50

· International Packages and Next Day Expedited Order - contact LegalZoomTM for more information and pricing

· Amendments, Foreign Qualification - contact LegalZoomTM for more information and pricing

IncorporateTime

IncorporateTime is strictly an online method to create your LLC. All you have to do is fill out their order form on their Web page and send it on their secure server and, once they receive it, they will process it and send you an order confirmation within 24 hours.

Here are the steps you take on their order form:

  • Choose the state where your LLC will be... that determines the price (around $150). The additional fees you pay include processing of the necessary documentation, the search for name availability.

  • Choose the name of your LLC - The name must contain the words "Limited Liability Company" or "LLC". You choose two choices.

  • Enter your contact information - You are required to put the basic info, including name, home address and corporate address, so they can send you confirmation.

  • Select the type of business it will be Designate the organizational structure - Will it be managed by members (which is most typical) or the manager? The members can designate a manager. You have to enter the names and addresses of the members (up to 3).

  • Register an agent or office - This is required by state. The agent receives the documentation for the corporation. You can often be your own agent; this saves incorporation costs. IncorporateTime can designate one for you if you like, for $99.

  • Choose the services you want - The time for state filing is 15-20 days except when expedited.

Choose from these options:

*Standard State Filing Service

*Expedited State Filing Service - $70 (except in NV, NC, OH, GA, IL: $120). This takes 5-12 business days.

*LLC Kit with a Corporate Seal and Steel Embosser - $65

*To provide & prepare a Federal Tax Identification Document - $25 Choose from these shipping options:

*First Class Mail - Free

*Federal Express Next Day Service - $18

*Federal Express Second Day - $9

  • Enter your billing information.

  • Let them know how you came to hear of IncorporateTime.

  • Enter any special instructions or comments.

How to Protect Your Assets with an LLC

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Comments 24 comments

MrMarmalade profile image

MrMarmalade 8 years ago from Sydney

Hit the nail on the head

Thank you all for an incredible couple of months. I have enjoyed the hubs immensely and learnt a vast amount.Please enjoy to night and have a better 2008 than ever.


Research Analyst profile image

Research Analyst 8 years ago

Great info!


drazhardaud profile image

drazhardaud 8 years ago

cool stuff....why i always last to know..


windowsdirectory profile image

windowsdirectory 8 years ago from Singapore

Am I fortunate that I live in Singapore. At first, I thought our commecial is drag and complex. Now looking at simple forming an LLC in the United State is more comlicated. Different forms for different States, different compliance time and practice.

This is dragging, leaving a business person no time to focus on business 100%


In The Doghouse profile image

In The Doghouse 8 years ago from California

Glass Visage,

This is a wonderful Hub! Amazing information for anyone interested in an LLC. I will definitely bookmark for reference! Thanks.


Julie-Ann Amos profile image

Julie-Ann Amos 8 years ago from Gloucestershire, UK

Nice hub - I have linked one of mine on a similar topic to it or you


T.J profile image

T.J 7 years ago

That's excellent info!!! Thanks


bkoadmin profile image

bkoadmin 7 years ago from California

This hub is very useful, especially with details of the companies. Thank you for doing the homework for us.


glassvisage profile image

glassvisage 7 years ago from Northern California Author

Thanks everyone! You can thank HubPage's Flagship Hub program for encouraging me to make this Hub! :)


MICHAEL M. 7 years ago

MYCORPORATION.COM - FREE INCORPORATIONS & LLCS IN DECEMBER. MyCorporation.com is offering free incorporations for the entire month of December now...check it out. I wonder if they can afford to do that because they're backed by Intuit. Having them be owned by Intuit helped me to trust their offering. I think Intuit offers other free products, like a version of quickbooks and maybe now the federal part of turboTax (not sure about that). Anyway, it might be helpful to know that if you didn't catch it in time, they're free through december now.


glassvisage profile image

glassvisage 7 years ago from Northern California Author

That's awesome! Thanks Michael!


johnr54 profile image

johnr54 7 years ago from Texas

Good overview. I've been looking at the need to set up an LLC, and it's pretty clear from your hub that there's plenty of help to get it done cost effectively, so I guess that objection is gone.


Alain 7 years ago

Wonderful and very informative. Thanks very much


James 7 years ago

thanks for the good read. I bought Limited Liability Cmpanies for Dummies, and I saw the light. Ended up using MyLLC.com They helped me file a California LLC, and follow up with me periodically to ensure Im good.


Carol the Writer profile image

Carol the Writer 6 years ago from Houston, Texas

Very good information! Make sure that after you set up your LLC, you operate it like a business. Have a few meetings. Take minutes. If you loan your LLC money, have a written record. Very good hub. I like your asset protection video. - Carol


glassvisage profile image

glassvisage 6 years ago from Northern California Author

Thanks Carol and everyone! :D


Neil Ashworth profile image

Neil Ashworth 6 years ago from Ireland

Thanks for sharing your thoughts and knowledge on this topic...


form a california llc 6 years ago

A limited liability company is a business organization, or business structure, that is very very much like a corporation, but allows its owners more flexibility. Creating an LLC with an online incorporation company is most suitable for a smaller business in which the number of owners is limited


glassvisage profile image

glassvisage 6 years ago from Northern California Author

Thank you for the comments and the input!


Laura 6 years ago

This is a great article, I just saw this after looking at http://www.sonicworth.com/ they have a list of legal service providers too, but a lot of them are the same that you listed.


David78 profile image

David78 5 years ago from Mill Creek, WA

awesome stuff, thanks for the 411!!


MrTrustStore profile image

MrTrustStore 5 years ago from Los Angeles, CA

LLCs are great but they also cost money. You have to set them up (and pay for that usually) and then you need to pay a minimum tax of $800/year in California and you also need to file tax returns, which means paying a tax preparer. People should think about the hassle and costs associated with LLCs before setting them up. Of course many times they are needed but sometimes they are not. Also if you are a single member LLC that is one thing but if there is more than one owner, people need to be concerned about future fights. And that is where hiring an attorney to help you set one up can become priceless. Food for thought for those who rely upon the LegalZooms of the world...


Dorsi profile image

Dorsi 5 years ago from The San Francisco Bay Area

Thanks for this hub. It was exactly what I was looking for. I am getting ready to form and LLC and wanted to do it myself. You have done a great job on giving options for this. Thanks again! Tweeted and Facebooked!!


glassvisage profile image

glassvisage 5 years ago from Northern California Author

Thanks Dorsi!

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