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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

#151

Post by mellavora »

eaenki wrote: post #116
brtkdotse wrote: post #111

Earlier quoted context omitted.

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…

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

Well, it depends. Luxembourg initiated the 1 EUR corp, which lets you incorporate as a SARL (a form of LLC) for a pretty low rate.

However, the law then requires that you have an external auditor of your company's books, which runs 1.5-3K for a one-man operation doing uncomplicated things.

Sole proprietor is easier, and you can do your books yourself, but then the liability is unlimited.

I think you'll find many of the southern EU states are similar, the incorporation may be cheap but the accounting is less so.

Re: How to form a California LLC without a lawyer

#152

Post by grenoire »

_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.

It's €50 right now, but you normally have to spend a bit extra for notary fees to get the share capital notarised.

Re: How to form a California LLC without a lawyer

#153

Post by jlokier »

Xylakant wrote: post #139
davehcker wrote: post #130

Earlier quoted context omitted.

Can someone comment something regarding Germany please?

It depends. For any kind of Limited Liability Company, it cannot be done online, you need to see a notary. Costs and process differ depending on what exactly you want: * Forming a full GmbH will cost around 1000-2000 EUR for lawyer,notary,tax accountant. You strictly speaking don't need lawyer nor tax accountant, but unless you are very familiar with the process, I'd recommend you enlist their services. It will make…

> Keep in mind that moving money in to and out of limited liability companies is not trivial, so you should have sufficient founding capital to cover the initial expected expenses.

Can you not, as an owner or director, loan money to the company to cover initial expenses? In the UK it's common to run a Directors Loan Account.

With the DLA you can lend money to the company to start things up, or pay for things personally and claim expense from the company if that's simpler at first (even company formation fees can be claimed like this) which can then sit in the DLA, or use it to borrow (a limited amount) from the company for a short time to smooth over salary/dividend payment planning.

You have to be careful to account for each transaction between personal and company, but if you understand that it seems not especially complicated, and certainly doesn't need founding capital. With my recent company the founding capital was £1.

Re: How to form a California LLC without a lawyer

#155

Post by mellavora »

anon9001 wrote: post #33
koolba wrote: post #17

Earlier quoted context omitted.

If you live in CA and you’re going to cheat the taxman by not registering locally as a foreign corporation, then you might as well register as an Ohio LLC. $99 initial registration and zero annual fee to maintain it.

Sure, Ohio is nice because it has no fees and no reporting requirements for $99. But why stop there when you can go to Arizona and get the same deal for $50. But seriously, if you want to cheat California, just leave and move to a more business-friendly state and do your business legally. It's 100% not worth it to operate illegally in California, especially for the registration of an entity that's intended to protect…

echo that. Failing to register as a foreign corp operating in CA is going to be seen as tax fraud by the authorities. They don't like that.

CA is an expensive place in many ways. Basing your business operations there is only one of them.

Re: How to form a California LLC without a lawyer

#156

Post by chadash »

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…

My personal experience is that it costs about $180 to setup in my state (you can do it yourself, but i paid about $50 to an online service that helps with the process) and then about $130/year to maintain. The initial process took about 30 minutes (plus a few days waiting) and the yearly "reports" take about 15 minutes. It's pretty friction-less.

Re: How to form a California LLC without a lawyer

#158

Post by jeltz »

dboreham wrote: post #135
brtkdotse wrote: post #111

Earlier quoted context omitted.

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…

I suspect you're receiving filtered information (some people have an agenda to prove how bad the government is). You absolutely don't need a lawyer to incorporate. Businesses are registered with the state, not federally, so you're seeing data pertaining to 50 "countries". The lawyer is primarily to prevent you from making what could be costly mistakes but if you don't care about that... I suspect financial literacy i…

What costly mistakes? I do not know of anyone in my coubtry who would consult a lawyer when registering a company. They might consult some expert in tax planning but never a lawyer.

Re: How to form a California LLC without a lawyer

#159

Post by dragonwriter »

withinboredom wrote: post #120
dragonwriter wrote: post #115

Earlier quoted context omitted.

> having the corporate veil pierced if someone wants to come after you. The creditor wanting to pierce the veil is, unsurprisingly, not a sufficient legal condition for piercing the corporate veil, otherwise corporations and LLCs (not just California and not just single-member) would be worthless. Of course, a sloppily-run LLC is more likely to result in piercing the veil, and a single member LLC that the owner views…

It still doesn't stop someone from suing you personally. Anyone can sue anyone for any reason. You can try to claim "it was the business's fault" but if you're a single member LLC (with no employees) this is very difficult -- but not impossible -- to prove. I'm not a lawyer, but this happened to my dad a couple of times in his life. The first time, he lost control of his business and had to declare bankruptcy. The se…

> It still doesn't stop someone from suing you personally.

It vastly reduces the expected value to them, and thus the incentive, and the expected cost (legal and liability) to you, but no, it's not an absolute shield.

> . You can try to claim "it was the business's fault" but if you're a single member LLC (with no employees) this is very difficult

Well, yes, but the problem with that isn't “single-member LLC” (for which the standard is pretty much the same as any other limited liability entity) but the “you’re” part: a key requirement of maintaining limited liability is that the entity is operated as a distinct thing from the principals. If you view yourself as not distinct from the LLC—that the LLC is something you are and not something you have or operate—that's a pretty good sign that you are thinking about it wrong from the start.

Re: How to form a California LLC without a lawyer

#160

Post by jeltz »

eaenki wrote: post #116
brtkdotse wrote: post #111

Earlier quoted context omitted.

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…

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 Sweden all three are true. It costs less than 200 EUR and you can do it online.
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