LLC Archives - LexLaunch

6 Things You Must Do Every Year To Keep Your LLC Compliant

Tim Denker — Wed, 17 Oct 2018 17:39:29 +0000

A lot goes into running a successful business.

Of course, the recipe is different depending on your industry, market, and offering.

However, one thing all successful LLCs have in common is they remain in compliance – year-in and year-out.

6 Requirements for Keeping Your LLC in Compliance

Fortunately, staying compliant with government regulations doesn’t need to be a herculean challenge.

Provided you understand what’s required, earning your Certificate of Good Standing can become as routine as all of your other annual endeavors.

Here are the six steps you need to take:

1. File Your Annual Reports

Sometimes called your “Statement of Information,” most states require you file some type of annual report – though it might only be necessary to do so every two years in your state.

Check your state’s website for the exact requirements, including the date it must be filed. Missing the deadline could incur penalties as well as the dissolution of your business.

2. Keep Accurate Records of Internal Affairs

Technically, this isn’t a strict requirement for LLCs, like it is for corporations.

Nonetheless, it’s always wise to record Minutes of Meetings and document any other important events, like changes in operations or standards and even business transactions.

3. File Articles of Amendment as Necessary

You may need to file Articles of Amendment if your business has been through a major change. This could include anything from updating the management-style of the business to an address change.

4. Be Sure You Have Permission to Do Business Out of State

If you decide to conduct business in any state besides the one in which you formed your LLC, you must receive permission to do so.

Usually, this means applying to become a Foreign LLC within the state you wish to operate.

The actual name of this form differs from one state to the next, but it’s usually filed with the Secretary of State’s Office. Depending on the type of business you run, you may also need to apply for certain licenses and permits, too.

5. Keep Your Personal and Business Finances Separated

If you’re a small business owner, make sure your personal finances and business finances never overlap. Aside from the headaches this will cause come tax time, this will also make your finances much easier to understand for government officials.

6. File DBAs for Any Other Names You Use

Have you begun doing any business under a name other than your LLC’s official title? If so, you may need to complete a DBA (Doing Business As) or fictitious name registration. This even includes simple variations, such as adding “.com” to the end of your company’s name or shortening/abbreviating one of the words.

Prioritize Your Certificate of Good Standing

If your LLC is successful in every other area, it can be easy to forget about the importance of your Certificate of Good Standing.

Unfortunately, that’s a mistake that could eventually lead to administrative dissolution.

So, now that you understand what’s required to remain compliant, make every effort to prioritize these steps and you’ll have no issues remaining on the government’s good side.

Can I Afford an Attorney for My Startup?

Tim Denker — Tue, 18 Sep 2018 18:02:13 +0000

When you’re starting a new business there are many things to consider. One key decision is if and when to hire an attorney for your startup. It’s understandable, as an entrepreneur, you want to keep extra costs to a minimum. Which is why many unfortunately put off the decision until they’re faced with a potentially serious legal problem.

However, legal help is something you should consider in the beginning of getting your business off the ground. Hiring a lawyer will ensure you’re compliant with the law and resolve potential legal problems before they start. It will end up saving you money and headaches in the long run.

At the most basic level, start-ups need lawyers to help them deal with three groups:

The government: You also need to be sure you are doing business in a way that doesn’t create unnecessary tax liability and that you pay the taxes you owe.
Third parties and the public: It’s essential to make sure you take reasonable steps to control risk in your interactions with customers, suppliers, users, employees, and the general public.
Each other: When multiple people form a company together, it’s best to establish the rights and expectations of the founders upfront in case there are disagreements down the line.

If you’re on a limited budget, which legal priorities should you focus on?

Establishing a business entity of some sort (LLC or corporation) to protect you personally from business liabilities
Establishing the ownership and equity rights of the company if there are multiple founders
Ensuring the business’ intellectual property is protected and owned by the company (especially if it is being developed by independent contractors)
Making sure you are paying attention to the tax consequences of what you do

If you need help with determining the cost for using a small business lawyer, contact LexLaunch to discuss your options. When you’re starting a new business we know every dollar counts.

We’re here to help you get the personalized legal advice you need at a price that won’t break your budget. We offer personalized small business setup plans at reduced rates from typical hourly fees. Click here to view our plans and pricing.

Forming a Fictitious Business with Your State

Tim Denker — Thu, 16 Aug 2018 00:13:43 +0000

Are you a sole proprietor who has a great idea for the name of your business? Is it different than your name? If so, it’s essential that you understand what a fictitious business is and how to form one in your state*.

What Is a Fictitious Business?

Despite its name, a fictitious business is a genuine entity.

Sole proprietors must register the name of their business under their legal name. This isn’t necessarily a problem for someone who wants to incorporate their name into what they do.

For example, many freelancers don’t require additional branding. They’re happy for their business name to be, “John Smith.”

However, this doesn’t apply to most sole proprietorships. If you’re a lawn care professional, you’ll probably have a better chance of winning new business with, “Smith’s Professional Lawn Care” instead of your legal name.

Any time a sole proprietor uses a name other than the one on their driver’s license, they are using a “fictitious business name,” which requires taking specific steps to form.

How to Form a Fictitious Business in Your State

Fortunately, as you’re about to see, it’s effortless to form a fictitious business. Just follow these three steps.

1. Choose Your Business Name

The first step is easy: choose a name for your business. As long as it doesn’t resemble another entity’s name too closely, you shouldn’t have too many issues here.

2. Print Out Your DBA Form

Next, you need to fill out a DBA form. In most states, you can find your “Doing Business As” form on the Secretary of State’s website. Otherwise, you can pick one up at your county clerk’s office.

DBA forms are relatively straightforward, so you shouldn’t have too many problems here. You’ll also need to pay a filing fee.

3. Complete and File the Form

Where you need to file the paperwork for your fictitious business will depend on your state’s requirements. The easiest way to find which rules pertain to your LLC is to visit the Small Business Administration’s Choose Your Business Name page.

Some states may also require that you publish a notice of your company’s name in your local newspaper, so customers are aware.

Check to be sure you’re filing it with the right agency, as well. Again, in some states, this is done on the county level. In others, you do it with the state and, and in still others, you have to do both. You don’t want to land in trouble just because you forgot one of these requirements.

Furthermore, you may need proof that your LLC is in good standing before forming your fictitious business name.

Take the Time to Form Your Fictitious Business Correctly

Given how easy it is to follow all the legal requirements associated with forming a fictitious business, there’s no reason to skip this simple step, especially when you consider the penalties you’ll incur for doing so.

So, if you’re a sole proprietor with a great name in mind, go through each of the above steps and you’ll be on your way to operating under this new title.

*some states (ie. Kansas) do not allow DBAs/fictitious names

Winding Down an LLC

Tim Denker — Sat, 21 Jul 2018 15:57:08 +0000

Have you decided it’s time to wind down your LLC? It’s a big decision to make. However, if you’re sure it’s the right one, then the next step is understanding what this process requires.

3 Steps You Must Take When Winding Down Your LLC

Despite what many people think, it’s not as easy as just closing your doors and taking down your site. Successfully winding down your LLC requires you take the following steps.

1. Take an Official Vote

The first thing you need to do is hold an official vote with your shareholders, stakeholders, or any other “member” of your LLC. You need to reach an agreement to close your LLC.

Be sure to record this vote either in the minutes of your meeting or document it via a written consent form. Then, secure proof of this vote – and its outcome – in your LLC records book.

2. Complete Your Dissolution Forms

Next, go to your state’s corporations division or secretary of state website to download the Certificate of Dissolution you’ll need to complete. Other names for this document include articles of dissolution and certificate of cancellation.

In some states, you may need to indicate whether or not all of your LLC’s debts and liabilities have been covered and what will happen to any of your remaining assets.

Once you’ve filled out this form, send it in with a cover letter that indicates the name of your company and its LLC number. Include your name, address, and telephone number, too.

Check to see if your state charges a fee for filing it. If they do, you’ll need to send it in with your form. It’s a good idea to use certified mail and request a return receipt, so you’ll know when it was successfully delivered.

3. Cancel Any State Qualifications or Registrations

If your LLC qualified to do business in any other state besides your own, you must withdraw your right to continue doing so. This will also require an official form, usually called one of the following:

Application of Withdrawal
Certificate of Termination of Existence
Certificate of Surrender or Right to Transact Business
Termination of Registration

4. Don’t Forget About Your Tax Obligations

Before you can officially close out your LLC, you need to make sure you comply with the IRS.

This includes:

Filing an annual return for the year in which you’re closing down
Filing your employment tax returns (if you have employees)
Depositing your final federal taxes

Fortunately, the IRS provides a helpful checklist that covers all the essential steps in detail. While each of these may not apply to your business, it’s still a good idea to review them before moving on.

Create a Plan for Winding Down Your LLC

As you can see, closing down your LLC isn’t something you can do overnight. It takes a plan and then it requires careful execution of it. By dedicating the time to coming up with such a plan, you can move on to your next venture without worrying about any loose ends holding you back.

Why Almost Every Business Should Form an LLC

Tim Denker — Wed, 16 May 2018 05:42:42 +0000

If you own a small business, you’ve probably given some thought to what kind of business structure would make the most sense for your unique goals.

Although every company is different, for the vast majority of small businesses, it would make sense to form a Missouri LLC or one in Kansas.

3 Reasons Small Business Owners Should Form an LLC

Deciding to form a Kansas LLC or Missouri LLC may seem like a big decision.

Fortunately, as you’re about to see, this may be one of the easiest ones you ever make where your small business is concerned. There are three extremely compelling reasons why so many other small business owners have already made the choice to form an LLC.

1. More Flexibility Where Taxes Are Concerned

Depending on how many employees you have, you’ll most likely enjoy some impressive tax benefits for forming an LLC.

One of the most important is that it will ensure you avoid paying taxes twice every year.

If you decided to start a C-Corp, you would pay your income taxes and your company would owe taxes, too.

However, the IRS views an LLC similarly the way it treats a sole proprietorship. Therefore, come tax season, you’ll simply report your profits or losses on your personal income tax return. There’s no reason to file a separate return for your LLC.

With that said, if you run your small business with a partner, you may elect to pay your taxes as a traditional partnership. You could also decide to pay your taxes as a corporation would.

So no matter what kind of small business you own, you can start a Kansas LLC or Missouri LLC and enjoy a lot of flexibility in terms of how you’ll pay your taxes.

2. Low Ongoing Requirements

As a small business owner, you wear a lot of hats and juggle even more priorities.

That’s another reason why you should form a Missouri LLC or do so in Kansas: they’re incredibly easy to maintain.

Whether you want to add a partner to your company or even sell interest in it, LLCs are much more accommodating than something like a C-Corp. For example, if you decide to form a C-Corp, you’ll need to keep minutes that pertain to making many board decisions.

3. Starting an LLC Is Simple

Despite all of these benefits, it’s incredibly easy to start a Missouri LLC or Kansas LLC.

To form a Kansas LLC will only cost you $165 in filing fees. The filing process is usually completed within two days.

To form a Missouri LLC is just $105. If you do it online, it’s just $58 and your forms will typically be filed in a single business day.

Even when you add the cost of legal services – always a good idea – it’s still incredibly affordable to secure the benefits of forming an LLC in either state.

In both states, the entire process is a relatively quick one that involves the following basic steps:

Choose a name for your LLC.
Create Articles of Organization.
Assign a Registered Agent.
Pay the aforementioned fees.

Again, the filing required takes no more than 48 hours.

Get Started with Your LLC Today

Given how fast, affordable, and beneficial it is to transform your small business into an LLC, there’s very little reason to put off this important decision.

Of course, if you want to be absolutely sure that you don’t make a single mistake going forward, Lex Launch is here to help. No matter what kind of business you own, we’ll help you start the LLC that makes the most sense for your needs.

Should Real Estate Agents Form LLCs?

Tim Denker — Fri, 16 Mar 2018 15:45:31 +0000

No matter how much you are killing it in sales in the real estate world, nothing can halt a successful business as quickly as a lawsuit. And because real estate agents are entrepreneurs dependent on production, the risk is even higher than for other types of business owners. It’s important to make sure that your business—and your livelihood—are protected against possible risks. One of the best ways to do this is to form a business entity, such as a limited liability company, or LLC.

How do you know if you need an LLC? Many real estate agents are considered independent contractors, responsible for calculating their own payroll taxes and submitting them to the government. If this is you, then you are treated as a separate business from your employer in the eyes of the government—leaving you susceptible to personal responsibility in the case of a lawsuit.

Unlike a sole proprietorship, where you are essentially viewed as an extension of your business, an LLC gives protection against your personal assets if your business is ever engaged in a suit. This means that if your business is found liable and has a judgment filed against it, or it incurs debt that you can’t repay, your personal assets could remain unaffected. If you are a sole proprietor, all your business and personal assets are at risk.

There are a variety of options when determining which business structure best fits your needs, that’s why it is important to talk with an attorney that has experience setting up LLCs, like the team at LexLaunch.com. Besides establishing legal protection, which is enough in and of itself to create an LLC, there are a variety of other benefits as well. Here are a few:

Business Write-offs. Businesses get to deduct some forms of business expenses from their taxes. As a realtor, you are often responsible for paying for your own marketing, office space, mileage to and from events and showings, and more! If you have an office area in your home, you might be able to deduct some of your mortgage and utility bills as well. It’s important to consult with your CPA to consider the tax savings of setting up an LLC.
Separate Bank Account. It’s important to keep your business and personal banking as separate as possible. If you create an LLC, you can apply for a business bank account, which tends to have more perks than a standard personal banking account. Keeping these accounts separate also makes business accounting and budgeting easier.
Business Loans and Credit Cards. If you own a business, you can apply for loans and credit cards that often times offer better terms than loans and cards for personal use. Benefits include a longer pay-off cycle, reduced APR, and more available credit. You can also ask for multiple cards for additional people who might work for you, such as an assistant.
You hear it everywhere in business these days: “Be your brand.” Forming an LLC allows you to have both a personal and a professional persona. How you are perceived by future clients can mean the difference between building your customer base and losing it. Forming a business gives the impression that you are dedicated, that you are committed, and that you are unique from other realtors associated with the same company.
Here are a few more important reasons for real estate agents to form LLCs, from one of the founders of LexLaunch.com, Tim Denker:

Whether you’re a new agent or you’ve been around for awhile, it’s important not to make decisions regarding business formation on your own. Before deciding on an entity, it is important to consult with professionals who have experience helping small business owners decide the right type of structure for their business, like the attorneys at LexLaunch.Com.

Our attorneys will also help you create the written documentation you need to set up your structure, as well as submit the documentation on your behalf. They can also review any specific documentation, contracts or agreements specific to your other affiliations with larger real estate groups.

Make sure your business and personal assets are protected from risk, call the professionals at https://www.lexlaunch.com/ today at (816) 434-6610 or click here for more information.

Tax Season for LLCs–What You Need to Know

Tim Denker — Wed, 14 Feb 2018 21:13:12 +0000

Tax Season for Missouri LLCs and Kansas LLCs is upon us.

It’s the most wonderful time of the year—tax season is officially here! While you might not agree with the first part of that statement, the second part is not up for debate—when April 15^th hits, will your small business be ready to file? We’ve prepared a few tips to help you prepare your business for tax season this year.

Know your tax distinction. First of all, it’s important to know how the IRS sees yours business. This is usually determined when you set up your LLC. An LLC has the unique status of allowing the owners to choose how they will be taxed. As we’ve talked about in previous blogs, these distinctions also require different bookkeeping roles throughout the year. Whether you are a sole proprietor/partnership, an “S” corporation or a “C” corporation it will distinguish what tax rules you need to follow. It’s important to look up your LLC’s tax election and/or check with your CPA to make sure you are following the correct guidelines for your designation. Partnership and “S” corporation requirements (a/k/a flow-through) will have each partner report income, losses, deductions and credits on their personal tax returns based on how much of the business each member owns. “C” corporation requirements treat your business as a separate taxpayer or entity.
Retrieve last year’s tax returns. Unless this is the first time you’ve filed taxes for your business, you will always need the prior year’s return to complete the current year. Dig this out of a drawer or file cabinet, wherever you place your important documents, and review carefully. Last year’s return will list carryover amounts and depreciation schedules.
Get your books in order. Whether you use an accountant, an online system or paper and pencil, make sure your bookkeeping is up to date. Account for all income, including earned interest on savings accounts. Make sure you have reviewed your inventory and totaled the cost of all goods sold. Don’t forget to include all expenses such as mileage, advertising, depreciation, professional fees and insurance. Get a printout of the balance in the company’s income and expense accounts.
Review the operating agreement. Any changes in the way profits and losses are assessed to each member over the past year can change the way taxes are assessed and paid. Make sure to reflect any differences in the new return, and record changes in your meeting minutes.
Schedule a professional review. After collecting the information above, it’s important to have a professional with expertise in small business review your return. This might include an accountant and an attorney who can explain to you the details of what you are filing and to make sure that you are receiving the tax and risk-protection benefits your company needs to remain successful.

At LexLaunch.Com, our legal professionals can give you the peace of mind you deserve when filing taxes for your small business. We can go through each step with you to ensure that you are taking the correct steps to shield your small business from risk for years to come, and we’re more than happy to help you find a great CPA in your area if you haven’t already. Give us a call today at (816) 434-6610 or click here for more information.

New Year, New Business Structure?

Tim Denker — Fri, 26 Jan 2018 17:09:07 +0000

As 2018 gets underway, now is the perfect time to review your current business structure and determine if any changes need to be made in the new year. As your business grows, evolves and changes, it might make sense to change your current structure to something that provides greater risk coverage and more adequately suits your business goals.

When is the best time to make a change? How do you change it? If you change it, can you switch it back later? These are questions that are best answered by an attorney with experience in small business law, like those at LexLaunch.com. Each business structure has different legal and compliance obligations, so make sure you understand the differences before changing your business structure.

Here are common reasons to consider changing the structure of your business:

Have you taken on a business partner?
Have your profits increased or taken a downturn?
Have you expanded your offerings?
Are you looking to purchase real estate for your business?
Did you buy an existing business, or did another owner leave the business?
Did you increase the number of employees at your business?
Have your financial goals changed recently?
Are you reorganizing the operations within your business?
Are you looking for investment opportunities or looking to sell your business in the near future?

Each business structure has different legal and compliance obligations, so it is important to have an attorney explain the differences before you decide to change your business structure. A good attorney will take the time to meet with you and discuss the following before providing guidance:

Pros and cons of changing your business structure
Types of each kind of business structure
Determining a business plan for your new structure
Whether partnership agreements or corporate governance documents are required
Whether new trademarks or business names need to be registered
Review other agreements that are currently in place or will need to be formed with the new structure

You don’t have to wait until you need to change your business structure to talk with a professional. In fact, it’s better to plan for your business needs now and make those changes before you need them. With careful planning with an experienced attorney, you can take advantage of opportunities as they arise. You can also insure that you are personally and professional protected from risk as your business grows. Don’t wait to review your business structure, call the professionals at LexLaunch.com today at (816) 434-6610 or click here for more information.

I used an online service to set up my LLC—do I still need an attorney?

Tim Denker — Fri, 12 Jan 2018 16:47:03 +0000

It’s no secret that we at LexLaunch.com feel that using online legal incorporation services to form your LLC are no match for the expertise that comes with working with a personal attorney. But what if you used an online service before heeding our advice? No matter if you used an online incorporation service years ago or just last month, it’s important to have an attorney independently review your documentation to make sure you are adequately prepared for managing risk to your company and your personal assets for years to come.

Incorporating your business is not an easy process, nor is there a “one size fits all” packet of incorporation documents to file. There are often secondary requirements that extend beyond what is offered on online sites. Also, regulations for formation are always changing and vary from state to state. If you miss a vital update, your application might be faulty or incomplete, leaving you open to personal and professional risk in the future. Reviewing the disclaimers on these online sites is enough to make the most confident applicant a little wary.

If you’ve already used an online legal service to incorporate your business, it might be a good idea to have an attorney with knowledge of business incorporation, such as the lawyers at LexLaunch.com, to review all documents created when you began your business. An attorney will be able provide direction as to the viability of your legal setup structure, as well as:

Ensure that the correct documentation was filed for your state
Guide you through the tasks required following incorporation, such as naming a board, issuing stock, and/or completing any further publication requirements
Anticipate possible legal issues that might arise in the future (such as intellectual property ownership or fundraising) and advise you on next steps to reduce risk
Give you cost estimates for future legal needs so that you can budget accordingly
Provide peace of mind that you “did it right” and that you have taken the steps needed to reduce risks

Every new business is unique, and a lawyer can help tailor legal work to your specific situation. Asking an attorney to review the documents created by an online legal service gives you an extra layer of confidence and protection when disagreements and challenges arise in the future.

If you’ve used a “one size fits all” service for incorporating your business, get the peace of mind you deserve by scheduling an appointment with an attorney that has experience in setting up new companies, like the lawyers at LexLaunch.com. Give us a call today at (816) 434-6610 or click here for more information.

Top 5 New Year’s Resolutions for Your Small Business

Tim Denker — Wed, 27 Dec 2017 23:30:16 +0000

As we head into 2018, it’s a great time to focus on your small business and set goals for the upcoming year. The professionals at LexLaunch.com have 5 New Year’s Resolutions that can keep your company in good legal standing and reduce risk during the new year.

Incorporate your business. This is always our #1 resolution for any small business. Taking the time to formally incorporate your company provides risk protection and possible tax benefits as well as protecting your personal assets. It also gives your business added credibility to new and potential customers. LexLaunch.com provides simple solutions with real attorneys to make this process quick and easy for any business owner.
Update your records. If you have already formed an LLC, it’s a good idea to make sure the appropriate address is on file with your state and make sure your annual minutes are up to date. It’s also a good idea to review your bylaws, your operating agreement and any partnership agreements pertaining to the ownership of the business. The professionals at LexLaunch.com can create a checklist of items to review and help answer any questions you might have during the review process.
Meet with your advisors. While meeting with an attorney once a year for a business review is important, you should consider meeting with other professionals as well. You might schedule an appointment with your accountant, financial advisor or any other business consultants that can help you gain a clear picture of the state of your business. These professionals can also update you on the latest business trends and any new regulations that could affect your company.
Develop a business plan. Once you’ve met with your advisors, it’s time to make a formal plan for the year. A business plan puts your goals and projections on paper and allows you the ability to track and measure your progress throughout the year. It will help you focus throughout the year and see how far you’ve come. Schedule quarterly reviews of your plan in your new 2018 calendar.
Settle your disputes. If there are any unresolved issues carrying over from the previous year, try to resolve them in 2018. Outstanding grievances can take your focus and energy away from growing your business. If you cannot resolve the matter on your own, meeting with an attorney that specializes in small businesses can help you decide the next best steps to clearing any outstanding differences and clearing the path for a more positive new year.

While there are many more resolutions that you might want to add to your list for 2018, these 5 suggestions can help reduce your risk and put your business on the path to success. The professionals at LexLaunch.com thank you for your support this year and wish you all the best for a great 2018! If you’re ready to plan for the upcoming year, make an appointment to speak to a legal representative to learn more about how you can decrease risks and protect your business in 2018. Call the professionals at LexLaunch.com today at (816) 434-6610 or click here for more information.