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How to form a California LLC without a lawyer

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Re: How to form a California LLC without a lawyer

#141

Post by rendall »

Mutjake wrote: post #123
eaenki wrote: post #116

Earlier quoted context omitted.

That’s not even true. Aside from the U.K. and Estonia, I can’t think of an European country where 1) it costs less than $1K to incorporate 2) you can do it online 3) You can DIY Italy, Germany and SwitzerlanD just to pick 3 I’m familiar with, are nothing like U.K./Estonia On the other hand incorporating a C Corp in Delaware costs between $89 and $399 and you can do it online by yourself

275 € in Finland, when done online (+you’ll need a bank account for the company). AFAIK many people DIY.

I did

Re: How to form a California LLC without a lawyer

#142

Post by codpiece »

brtkdotse wrote: post #111
gojomo wrote: post #58

The article claims as a second benefit of an LLC: > 2. Tax benefits. You can deduct qualified business expenses from the total income of the business. Here’s a simple example: If you spent $1,000 on servers and your website made $10,000, then you’ll only pay taxes on the $9,000 in profit. You don't need an LLC to deduct such expenses. Even sole proprietors can deduct business expenses against business profits.

As a European who also worked a year in the US, it's starling how utterly _byzantine_ everything related to operating a business in the US is. Why in the everloving world would I need a lawyer that should be an extremly simple process? Forming an equivalent to a LLC in the majority of EU is a 5-10 step web form signed online, followed by some waiting and a sub 100€ one-time-fee. Furthermore, financial literacy also s…

In most states, you can fill out a form provided by the commerce division and you'll be up and running for a small fee. In my state, it's about $35 and one sided sheet of paper application (or file online).

Re: How to form a California LLC without a lawyer

#143

Post by la6471 »

The absolute horrible thing about forming a Llc in California is the $800 FTB tax, that you have to pay irrespective of wether you have any income or not. This is really discouraging for any individual who is trying to start a business and is unsure of the outcome in the initial years.

Re: How to form a California LLC without a lawyer

#144

Post by giancarlostoro »

PopeDotNinja wrote: post #113
giancarlostoro wrote: post #79

Earlier quoted context omitted.

> It won’t protect you from lawsuits, This sounds misinformed. The point of an LLC as far as I have always understood it is that if someone sues your company they cannot take your personal assets as collateral but only that which belongs to the company. If someone sues you, you can lose a crappy small LLC or would you rather lose your home as part of a settlement cause somebody is a monster. Feel free to correct me i…

If you’re at the level you’re just starting out, there’s a good chance your home is your biggest asset. Forming an LLC won’t let you borrow money with no collateral, so there’s a good chance your gonna have to expose yourself to personal risk. If you have to put your home up as collateral, an LLC may not give you much. My personal experience was that banks will start treating your LLC as an entity that isn’t an exten…

Well if you sign over your home as collateral that's another story entirely. I think we're discussing something else from what I'm more concerned about, which is in regards to lawsuits.

Re: How to form a California LLC without a lawyer

#146

Post by hellofunk »

gojomo wrote: post #58

The article claims as a second benefit of an LLC: > 2. Tax benefits. You can deduct qualified business expenses from the total income of the business. Here’s a simple example: If you spent $1,000 on servers and your website made $10,000, then you’ll only pay taxes on the $9,000 in profit. You don't need an LLC to deduct such expenses. Even sole proprietors can deduct business expenses against business profits.

> If you spent $1,000 on servers and your website made $10,000, then you’ll only pay taxes on the $9,000 in profit.

I wonder if this is correct. Many places require you to deprecate assets such as computers over many years, so the deductions are not all taken out of your profit the year you buy them.

Sounds like this article is conflating the legalities of setting up a business with the accounting of operating one, two different things.

Re: How to form a California LLC without a lawyer

#147

Post by hellofunk »

_31 wrote: post #131
eaenki wrote: post #116

Earlier quoted context omitted.

That’s not even true. Aside from the U.K. and Estonia, I can’t think of an European country where 1) it costs less than $1K to incorporate 2) you can do it online 3) You can DIY Italy, Germany and SwitzerlanD just to pick 3 I’m familiar with, are nothing like U.K./Estonia On the other hand incorporating a C Corp in Delaware costs between $89 and $399 and you can do it online by yourself

In the Netherlands it was about €75, filled most of the paperwork out online although we did have to go in to the KVK (Chamber of Commerce) to complete the process.

Are you talking about a B.V.?

Re: How to form a California LLC without a lawyer

#148

Post by bennylope »

hellofunk wrote: post #146
gojomo wrote: post #58

The article claims as a second benefit of an LLC: > 2. Tax benefits. You can deduct qualified business expenses from the total income of the business. Here’s a simple example: If you spent $1,000 on servers and your website made $10,000, then you’ll only pay taxes on the $9,000 in profit. You don't need an LLC to deduct such expenses. Even sole proprietors can deduct business expenses against business profits.

> If you spent $1,000 on servers and your website made $10,000, then you’ll only pay taxes on the $9,000 in profit. I wonder if this is correct. Many places require you to deprecate assets such as computers over many years, so the deductions are not all taken out of your profit the year you buy them. Sounds like this article is conflating the legalities of setting up a business with the accounting of operating one, t…

> Many places require you to deprecate assets such as computers over many years, so the deductions are not all taken out of your profit the year you buy them

It's likely that in some accounting regimes you have to to this, but in my own experience with a small business in the US, multiple accountants have simply depreciated assets like our computers immediately. When I originally questioned this our CPA said we could depreciate it over several years but it wasn't necessary in our case (small enough [asset] value and lifetime) and not worth it.

As it stands I imagine if someone is spending $1,000 per year on "servers" these are non-depreciable cloud service expenses.

Re: How to form a California LLC without a lawyer

#150

Post by Consultant32452 »

xur17 wrote: post #16
inoffensivename wrote: post #13

You also need to file a California Form 568 tax return with the Franchise Tax Board and pay the $800 annual tax whether or not you have any income, or you get a big fine that increases every month you don't file... Ask me how I know :)

> pay the $800 annual fee whether or not you have any income Really? In the 2 states I've lived in, there is no annual fee for LLC's. I'm curious what the reasoning behind having a fee that large is.

In my state (not California) I have to file paperwork with the state on a yearly basis to confirm the status of my corporation: still active, any changes to the board, etc. There is a fee associated with this as well, though it's far less than $800. If you fail to do this, they just dissolve your corporation.
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