Limited Liability Companies (LLCs): Avoiding Disasters, Mistakes and Confusion! (Part Two)
By Darius M. Barazandeh, Attorney at Law M.B.A.
Please see part one for entire article <P>
4) FAILING TO COMPLETE THE ‘BIG 10’ AFTER FORMING THE LLC: It does not matter whether you file the LLC paperwork yourself, hire an attorney or other service these things must be completed. This is one mistake we see over and over again! Most business owners routinely forget to complete the ‘Big 10’ important steps within 30 days of forming the LLC. Here are 7 of the steps:
a) Conduct the First Organizational Meeting of the LLC – This is really important and will allow you to create solid safeguards and ‘often forgotten’ controls. There are about 11 things that should occur at this meeting! b) Obtain Employer’s Identification Number (‘EIN’) from the IRS c) Register Your Business Name with the County Name Registrar d) Register with your State Department of Revenue and Comply with State Sales Tax Rules e) Collect Member Capital Contributions and Transfer Cash or Hard Assets into the LLC (With proper instruction this is simple…if done incorrectly a liability disaster can occur!) f) Obtain the Proper Business Licenses g) Review Insurance Coverage Needs and Limitations
5) FAILURE TO PROPERLY EVALUATE AND CHOOSE YOUR TEAM OF PROFESSIONALS: This is perhaps one of the toughest things for the real estate investor and small business owner to do. Part of the problem is that most of these professionals (e.g., attorneys and accountants) will know more than the average business owner regarding legal and tax issues. Sometimes the big mahogany desk and the plush office will make them seem even smarter! Take it from me, ‘ivory tower’ law and accounting programs really don’t teach you how to run an LLC for maximum tax savings and asset protection. It seems to be a lost art these days! The truth is that the competency of legal and tax services can range from great to very poor! You need to be able to evaluate this for yourself!
The challenge is that most people who contact an attorney or accountant rarely have a true two-sided discussion! After all, it’s nearly impossible to ask the right questions and comprehend all your of options unless you fully understand the choices and variations available. THE ANSWER: EDUCATE YOURSELF FIRST! One thing that I have learned over the years is this: NO ONE WILL CARE AS MUCH ABOUT YOUR BUSINESS AS YOU! It may be sad but accept this today…in fact, RIGHT NOW! Take advantage of top quality home study systems and detailed instruction. Learn about your options and the ‘best practices’ for real estate investors and business owners. Seek out those who want to help and EDUCATE! Then when evaluating an attorney or accountant you can ask them the ‘tough’ questions and see if they can answer or if they squirm! Doesn’t this sound like a better position to be in? You will be better able to choose your team and you can ensure that the person who CARES THE MOST about your business CAN MAKE INFORMED DECISIONS ABOUT THE BUSINESS!
To learn more about the remaining traps, mistakes, and errors, which entity may be best for your business and how to file, create, run, and maintain your own ‘iron clad’ LLC or corporation, please see Mr. Barazandeh’s, Incorporate for Wealth ™ and Wealth Building LLC ™ courses at www.theinformedinvestor.com and www.attorneysecrets.com
I want to wish you all the best in your business and email me if you ever need help: taxenterprises@yahoo.com
About the Author
As a licensed attorney and former business consultant, Mr. Barazandeh brings a high level a professionalism teamed with in-depth legal and business knowledge to the world of real estate coaching and training.
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