Uncategorized Archives - LexLaunch

How does the Corporate Transparency Act Affect My Business?

Tim Denker — Wed, 03 Jan 2024 17:19:11 +0000

Lexlaunch.com has been designed to help small businesses navigate the LLC formation easier, while still getting our clients the legal help they need. So, when FINCEN (basically the IRS criminal enforcement division) decided to require entities to disclose beneficial ownership information, we dove in to help you figure this out.

We’ve summarized, below, what you will need to know about this new reporting requirement for small businesses and are here to help you stay compliant. Please make sure you do stay in compliance, as there are some pretty severe penalties in place if you are not.

Reach out to Denker Law Firm LLC directly to assist with compliance. (816) 434-6610 or tdenker@denkerlawfirm.com. We’ll be working on a more streamlined approach for you once we have access to the filing system.

What is it, and why are they requiring this?

You may, or may not, have heard that the U.S. Treasury Financial Crimes Enforcement Network (FINCEN) has enacted what they call the Corporate Transparency Act. Essentially, they have put into place a reporting requirement due to the fact that individuals will use business entities for illicit activities (i.e. money laundering, terrorism, fraud, etc.).

Their stated goal is to set a federal standard for incorporation practices, protect commerce, help national security and bring the U.S. into compliance with international standards. The Secretary of the Treasury will maintain the information, and they are only to make it available to authorized government authorities.

Ultimately, they want to know who owns what company.

What entities have to report?

All entities formed within a State or registered to do business in the U.S. are required to report, unless they meet one of the exceptions. While there are several exceptions listed, basically it can be summed up to only include:

Those entities already registered with or providing this information to the federal government in some way;
Non-profits
Entities with more than 20 employees, more than $5,000,000 in revenue and are physically located in the U.S (all must apply);
Entities controlled by another exempt entity;
Entities that have been around for more than 1 year, are not engaged in active business, not owned by a foreign person, have not changed ownership in the last 12 months, have not received more than $1,000 in the last 12 months, and does not own another entity (all must apply); or
Entities that get the Secretary of the Treasury, the Attorney General and Homeland Security to agree don’t have to report.

This seems like a lot of exceptions, but generally speaking, if you actively operate a small business in any state in the U.S., you will more than likely need to report.

When do you have to report?

If your entity was formed before January 1, 2024, you will need to file your initial report no later than December 31, 2024.

If you are forming a new entity on or after January 1, 2024, but before January 1, 2025, the report will need to be filed within 90 days from when the new entity was formed.

If you are forming a new entity on or after January 1, 2025, the report will need to be filed within 30 days from when the new entity was formed.

In addition, if there is any change to the ownership of your entity, they do require that you report that within one year from that date in which that change in ownership occurred.

What do I have to report?

Essentially, they want to know basic information about the company, as well as who everyone is that owns at least 25% of the entity or exercises substantial control over the entity. For entities formed after January 1, 2024, the company applicant will also need to be reported (the person that filed the entity with the state).

A beneficial owner cannot be:

a minor child,
a person acting on behalf of another person,
a person who is only an employee of the entity who’s control is only as a result of that employment status,
a person who’s interest is only through an inheritance,
a creditor of the entity (unless the creditor has substantial control or at least a 25% ownership)

What exactly is “substantial control”? FINCEN’s chart that they provide on their site to explain this is below. If you fall into any of these categories, it applies to you.

Substantial Control

Senior Officer

Any individual holding the position or exercising the authority of a:

President
Chief Financial Officer (CFO)
General Counsel (GC)
Chief Executive Officer (CEO)
Chief Operating Officer (COO)

or any other officer, regardless of official title, who performs a similar function as these officers.

Appointment Or Removal Authority

Any individual with the ability to appoint or remove any SENIOR OFFICER or a majority of the board of directors or similar body.

Important Decision-Maker

Any individual who directs, determines, or has substantial influence over important decisions made by the reporting company, including decisions regarding the reporting company’s:

1. Business, such as:

Nature, scope, and attributes of the business.
The selection or termination of business lines or ventures, or geographical focus.
The entry into or termination, or the fulfillment or non-fulfillment, of significant contracts.

2. Finances, such as:

Sale, lease, mortgage, or other transfer of any principal assets.
Major expenditures or investments, insurance of any equity, incurrence of any significant debt, or approval of the operating budget.
Compensation schemes and incentive programs for senior officers.

3. Structure, such as:

Reorganization, dissolution, or merger.
Amendments of any substantial governance documents of the reporting company, including the articles of incorporation or similar formation documents, bylaws, and significant policies or procedures.

Catch-All

Any other form of substantial control over the reporting company. Control exercised in new and unique ways can still be substantial. For example, flexible corporate structures may have different indicators of control than the indicators included here.

What is reported about the entity?

Legal name
Any d/b/a’s
Current street address (no PO Box)
Where it is formed/registered; and
It’s Taxpayer ID number

What is reported about the owners?

Legal name
Date of birth
Residential address (no PO Box)
An identifying number from an acceptable government issued ID, as well as an image of that ID.
- Acceptable forms of ID include a non-expired driver’s license, passport, or non-expired ID issued by a state, local government or Indian Tribe.

How often does beneficial ownership information have to be reported?

Once the initial report is filed, there’s no regularly recurring requirement (i.e. no annual or monthly filing). However, if there is a change to the beneficial ownership of the company, an update will need to be filed.

Some likely triggers for a required update can include:

Any change to the information already reported (i.e. new business name),
A change in beneficial owners,
A change to a beneficial owner’s name, address, or unique identifying number previously provided, or
Your entity becomes an exempt entity.

If I own multiple entities, do I have to file for each one?

Unless an entity is exempt, each entity will have to file its own report.

Possible penalties

If you violate the BOI reporting requirements, you could be subject to penalties of up to $500 per day, as well as criminal penalties of up to 2 years in prison, and a fine of up to $10,000.

This is not something you should ignore.

Contact Denker Law Firm LLC directly for compliance assistance at (816) 434-6610 or tdenker@denkerlawfirm.com. Once we gain access to the filing system, we will implement a more efficient approach for your needs.

The Franchise Registered Agent

Tim Denker — Wed, 18 Dec 2019 02:23:20 +0000

You can’t know everything that is going on. As a Franchisor, you can dictate how the franchisee should run their business, but unless you are physically there it takes considerable time, money and effort to oversee what’s going on. What is important for your brand is that both you and your franchisees are protected.

One overlooked area of protection is not having a Registered Agent service for your franchisees. A registered agent is a person or company who agrees to accept Service of Process on behalf of an LLC or a Corporation. They will receive any legal documents including those pertaining to a lawsuit.

As business attorneys, we have seen the legal pain points clients experience in running their businesses and are always looking to help solve those embarrassing oversights. One way we’ve done so is by starting up a registered agent service. Our registered agent service helps:

Avoid being embarrassed at their business: a sheriff or process server is likely to serve us in our office instead of your franchisees in front of their customers.
No important deadlines missed: when a lawsuit is served the clock starts ticking. We notify clients immediately to help them not miss crucial court deadlines.
Anonymity: in a few states listing our company as the registered agent will keep the owner’s name out of public record.
State Records stay current: we will track that the registered agent state requirements are met to keep the business from being administratively dissolved. We even give notice to businesses to remind them if they have any annual filings coming due.

Recently, we have adapted our system to better serve franchises. Our Franchise Registered Agent service adds:

Dual Notice. Anything the franchisee receives from us the franchisor will also receive. You will know any legal difficulties arising as they arise giving you, the franchisor, a chance to make sure your brand is protected throughout the process.
Easier Company Meeting Minutes. Many business owners don’t realize this, but they are required to (or at least should) be keeping meeting minutes to track the decisions of the business. Minutes help strengthen the identify of the business (helps avoid a creditor piercing the corporate veil), outlines decisions that were made and how they were voted on to protect all business owners going forward. We will provide your franchisees unlimited access to our minute’s platform, and even send out monthly reminders.

Sign up is easy. Our service is available in all 50 states for a fee of $150 per year per business.

The Key to a Strong LLC Operating Agreement for Real Estate Investors

Tim Denker — Fri, 25 Oct 2019 19:25:34 +0000

Owning real estate in the name of an LLC operating agreement for real estate investors is often a savvy, legally-sound method to help insure against liability and asset vulnerability. In other words, when a piece of real property is owned by an LLC – as opposed to an individual person – only the LLC is “on the hook” in the event of damage or injury.

One of the keys to fully protecting the LLC and its members from unnecessary exposure to liability is designing an LLC agreement for real estate investors specifically, as this industry carries its own niche issues and unique legalities.

Here at Lex Launch, we not only assist with the filing of formal incorporation documents, but we help our clients create an operating agreement to help limit that unnecessary exposure. With our fair prices and well-educated legal consultants, your real estate investment LLC will be ready to launch in no time.

What is an Operating Agreement?

As the name suggests, an operating agreement is a legal contract between the members of the LLC in which each member agrees to conduct business in a certain way. Under Kansas laws, an operating agreement is not necessarily required in order to form a valid LLC. However, the legal implications of operating without one simply aren’t worth it.

For a real estate investor, an LLC operating agreement may address any of the following categories unique to this business:

A mission statement or clause specifically describing the nature and purpose of the business as dedicated to the ownership, sale and/or transfer of real property. This statement can be as detailed as necessary to include all facets of the LLC’s operating functions, including the right to renovate, enter into a landlord/tenant relationship or executing a mortgage in the name of the LLC.
A directive that all property purchased or acquired by the real estate LLC shall be titled in the name of the company only, and not in the individual name(s) of any member.
A statement referring to the amount of capital contributed by each member – including each member’s correlated ownership stake.
The ways in which distributions of profits shall be divided among members, and the procedure for doing so.
A list of activities the LLC is permitted to engage in to advance its purposes, including borrowing money, engaging in legal proceedings, liquidating assets, and any other activity the membership deems appropriate.
Ways in which the LLC may be terminated or the procedures a member must follow to relinquish their ownership

As you can see, an operating agreement is more than just a simple document. This type of agreement can come into play years later in the event of a dispute between members or with another party – so proper drafting is vital.

Contact Lex Launch Today to Create a Strong LLC Operating Agreement for Real Estate Investors

If you are at the inception of a real estate investment business and want to make sure your LLC has a proper operating agreement, contact Lex Launch today.

We can help you transform your concerns and legal questions into a strong LLC operating agreement for real estate investors appropriate for a Kansas LLC venture. Get started today!

How to Set Up a Real Estate LLC

Tim Denker — Fri, 25 Oct 2019 19:12:04 +0000

If you are a Kansas or Missouri-based entrepreneur in the real estate industry, learning how to properly set up a real estate LLC may seem daunting at first. Fortunately, the legal talent at Lex Launch is familiar with the laws and procedures in place for this process – and we look forward to working with you.

Setting up an LLC properly takes time and careful consideration – particularly for LLCs working in certain niche industries like real estate investing. To ensure your documents are prepared thoroughly and properly, an experienced LLC attorney should be involved from the outset.

Steps for How to Set Up a Real Estate LLC

If you’re like many entrepreneurs we work with, you’re ready to get going – now. We understand. However, taking the time to complete the necessary steps to set up your business is a small investment that could reap dividends in the future in the event of a dispute amongst your membership or with another party (e.g., tenants, buyers, or anyone injured on a property in the LLC name).

1. Make Some Decisions

There are a few basic decisions to make at the outset of this process. First, what will you call your business? Some people choose the obvious name of their product or service, while others prefer something a little more obscure. From there, you’ll need a federal tax ID (available online), separate bank accounts titled in the name of the LLC, and an understanding of who is considered an owner of the real estate investment LLC.

2. File Documents

To formally incorporate an LLC, the business needs Articles of Incorporation. Other documents that are necessary to properly set up an LLC include a thorough operating agreement (geared toward the real estate industry), formal books and records, and a business license. Our office is well-versed in the documents and filing fees associated with forming an LLC and can ensure your business is set up properly from the get-go.

3. Conduct Your Business

Once your LLC is formed, you want to make sure it does not come “un-formed” as a result of missteps in the daily business operation. This means you are keeping LLC assets and cash separate from individual accounts, holding regular meetings, taking minutes, and timely filing and paying taxes with the Division of Revenue. Your operating agreement will address many of the procedures and protocols necessary to keep your LLC running smoothly and legally – and you can always reach out to Lex Launch to answer any questions along the way as well.

Contact Lex Launch Today

Here at Lex Launch, we are able to assist Missouri or Kansas real estate investors with the process of setting up an LLC to engage in investment activities.

If you’d like to discuss the options and how to set up a real estate LLC, visit us online right away.

How to Form an LLC in Kansas

Tim Denker — Wed, 04 Sep 2019 17:19:28 +0000

Congratulations – you’ve decided to formally incorporate your business into an LLC in Kansas. The question is: how do you form an LLC in Kansas?

At Lex Launch, we work to help each client achieve legal security in the most painless and cost-effective way possible. If you’re ready to learn how to form an LLC in Kansas, there are a couple of documents to gather, forms to fill out, and government offices to contact – and we’re here all along the way.

Designing the LLC Structure

The immediate first steps in forming an LLC in Kansas involve you – the business owner – making a few critical decisions. First, you’ll need to decide on the official legal name of your LLC. It can be as simple as carrying on with the name you’ve used all along; or, alternatively, choosing something more obscure and not as obviously associated with your name and/or product.

Then, it’s time to draft a vital document known as the Articles of Organization. The document essentially governs the legal structure of the LLC. At a basic level, the Articles of Organization for a Kansas LLC must address the following points:

The formal LLC name
The address of the registered agent (located in Kansas) available to accept service of process upon the LLC in the event of a legal proceeding.
Whether the LLC will operate as a Professional Association or Professional Corporation

Once the Articles of Organization are drafted, the next important step is creating an operating agreement, which is an important governing and milestone in the LLC creation process.

Prepare an Operating Agreement

Technically speaking, Kansas law does not mandate the preparation of an LLC operating agreement, however, at Lex Launch we will work to ensure a fully enforceable operating agreement is in place at the outset of the LLC formation. The document identifies the leadership roles of the members and directors, as well as states the LLC’s purpose and governing procedures.

Further, a well-drafted operating agreement addresses voting protocol, decision-making procedures, and what will happen in the event one or more members do not agree with a certain action or wish to relinquish their membership. Lastly, a thorough operating agreement will dictate the pathway to dissolving the entity in the event the stated purpose is no longer practicable or other factors require ending the business.

Contact Lex Launch to Learn More About How to Form an LLC in Kansas

If you’re ready to take the next steps to form your LLC in Kansas, we’re here to help!

You can get started with one of the Lex Launch dedicated team members online – and breathe a sigh of relief that your LLC is in good hands.

Creating Your Kansas LLC: What You Need to Know

Tim Denker — Mon, 19 Aug 2019 15:51:34 +0000

Do you have a killer product you’re ready to start selling nationwide? Are you finally ready to take the plunge and purchase that building to open your very own restaurant? Setting up an LLC in Kansas may be your first step.

Whatever your market may be, it’s important to briefly hit pause while you consider the legal business formation. This is a necessary step to insulate yourself personally from the devastation of a lawsuit or creditor claim involving your product or service.

Lex Launch takes the guesswork, hidden fees, and headache out of obtaining an LLC in Kansas. By working with one of the company’s experienced Kansas business attorneys, you will have a solution in a fraction of the time it takes to work with a traditional law office.

3 Steps to Set Up Your Kansas LLC

The concept of a Kansas “Limited Liability Company” is created and governed by Kansas corporate laws. These laws mandate the precise forms and documents necessary to create this type of entity, which protects its member(s) from personal liability if a legal issue were to arise involving the business. LexLaunch is here to help clients navigate the Kansas LLC set up process, including:

1. Start-up Tasks

The process begins by choosing a legal name for the entity (check what’s available through the Kansas Business Center), followed by a request for a federal tax ID from the Internal Revenue Service. You’ll also need to decide who the LLC members will be and which of those members will fulfill leadership roles.

2. Make it Official

Lex Launch will help your business prepare the necessary documentation to formally register you as a Kansas LLC, including Kansas-compliant Articles of Organization, Operating Agreement, etc. You’ll also need to identify your Resident Agent and enroll with the Kansas Department of Revenue for state taxation purposes.

3. Stay Compliant

For a Kansas LLC to do its job, it will need to be well-run and comply with certain business formalities. You’ll need to hold regular meetings, take thorough minutes, file an annual report, and keep books and records in order.

Purpose of an LLC

If you’re just starting out (and on a budget) it may seem like formal corporate formation is not really necessary. However, creating an LLC is a small investment that can reap dividends in the long run, particularly if your business experiences a setback or major legal issue.

In the event an LLC finds itself on the receiving end of a lawsuit for damages (i.e., money), individual members will be insulated from personal financial responsibility to correct the problem—meaning, your home and personal savings will be safe. Further, creditors of LLC debt may only seek payment from the business itself – not individual members.

Peace of mind is invaluable when it comes to your business. Call Lex Launch right away to learn about our flat fee Kansas LLC set-up – we look forward to working with you!

How Much is an LLC to Establish?

Tim Denker — Tue, 09 Jul 2019 17:05:00 +0000

Financial considerations are usually top of mind when making the leap into owning your own business and most entrepreneurs know that the first essential step is setting up an LLC. An LLC limits your personal liability because an LLC is legally separate from its owners. LLCs are responsible for their own debts and obligations, and although you can lose the money you have invested in the company, personal assets such as your home and bank account can’t be used to collect on business debts.

So how much does it cost to form an LLC?

Read on to get the lowdown on what fees to expect.

There are many documents and articles that need to be filed to complete the registration process and ensure you are compliant with the law, the IRS, and your local tax authority. According to upcounsel a business attorney can cost anywhere from $150 to $1,000 per hour depending on the size of the firm and cost of living where you are filing. The number of hours is dependent on the complexity of your business as well as many other factors.

They also warn that there are some online legal companies that either blindly instruct you on how to ‘Do It Yourself’ or a “representative of the company is helping you behind the scenes – not a licensed attorney. Which leaves your paperwork prone to more errors”

The good news is that there is an option outside of spending uncontrollable amounts of money on the clock with a high-priced attorney or getting a sub-par experience with an unknown online service. Lex Launch offers 3 levels of LLC formation at a fixed price with a real attorney you have access to.

Filing Fee

The unavoidable state filing fee ranges between $40 and $500 and vary considerably from state to state. For instance, Kentucky charges only $40, while Massachusetts charges $520. Your Secretary of State’s office will be able to provide you with up-to-date fees and requirements for how much an LLC will cost you. The average filing fee for an LLC in the United States is $127.

Additionally, annual fees are required in some states in order to maintain the good standing of your LLC. If you do not pay your annual LLC fee on time, your state may dissolve and shut down your LLC. Annual fees range from $0 to $800, with the average fees coming out to $101.

Beside the state’s filing fees, there are other costs to consider when setting up your LLC. For instance, if you request a certified copy of your Articles of Incorporation, which you may need for tax purposes, it will cost you extra money.

Do you need to hire a Registered Agent?

Imagine this, you are approaching your home after going on a walk with your family, you wave at your neighbors and then realize there is a police car waiting in your driveway. Turns out your business is being served papers – which can sometimes be at no fault of your own. This embarrassing display is completely avoidable when you are running a business and hire the right people.

The Registered Agent is a person or company who agrees to accept Service of Process on behalf of your LLC. Service of Process is delivery of any legal documents pertaining to a lawsuit, such as a subpoena.

There are many benefits to hiring LexLaunch to be your Registered Agent:

Avoid Being Embarrassed at Your Office: The Sheriff or Process Server is likely to serve LexLaunch on your behalf
Anonymity: Your name, home and office address are not listed on the Secretary of State filings (LLC only)
Hassle: You don’t have to deal with all the junk mail
No Important Deadlines Missed: We will notify your local attorney, or find you one we trust

Additionally, by using LexLaunch as your Registered Agent you’ll benefit from saving 10% on future legal fees from participating law firms. You’ll also get the benefit of having access to the LexLaunch conference room for 1-hour to conduct your annual meetings.

Pay for an Operating Agreement or Get one for Free

An Operating Agreement establishes the structure of your company, helps protect your limited liability status, and, perhaps most importantly, create the governing rules of your business.

Depending on how you form your LLC, your Operating Agreement will either cost money or be included in your package. If you decide to go the DIY route you’ll likely need to purchase an Operating Agreement online. Fees generally range from $50 to $200.

Just remember your Operating Agreement should be clear and concise – less fluff, more substance. A professional service, like LexLaunch, has the experience to guide you through the process. It will give you the peace of mind that you have covered all of your bases.

No matter what you’re buying, selling, or trading, your company is unique. You want the ability to shape your rules to fit the goals and hopes of your business. An LLC Operating Agreement allows you to do so.

Federal Tax ID Number (EIN)

You’ll need to obtain a Federal Tax ID Number (EIN) in order to open your business bank accounts. This EIN will also be used for filing taxes, obtaining finances and getting credit cards. Obtaining a Federal Tax ID Number is a free service provided by the IRS.

Be sure to wait until your LLC is approved prior to obtaining your Federal Tax ID Number. If you’ve already obtained an EIN from the IRS before forming your LLC, then that EIN is not attached to your LLC and is attached to you personally, as a Sole Proprietorship. You can cancel your EIN here if you did this by mistake.

If you hire a lawyer, it might be included in their fees, but some will charge extra. Fees could be $50 to $100 depending on their hourly rate.

Some online incorporation websites charge a fee of $50-$100, but LexLaunch includes this service in all of their packages.

A good place to start if you have additional questions is LexLaunch.com. Our mission is to provide professional, ethical and cost-effective legal services to our clients. Contact us for a consultation today!

Series LLC Real Estate Basics

Tim Denker — Wed, 17 Apr 2019 21:29:01 +0000

Whether you’re a current or future real estate investor, you’re likely interested in understanding the best way to organize and protect your properties. Look no further than the Series LLC for your real estate assets.

Many turn to traditional LLCs to manage real estate investments and haven’t heard of the Series version, but a Series LLC for real estate is one of the most effective entities an investor can form and offers many benefits to your real estate business. When you take advantage of this structure, you’ll not only be able to streamline and build your real estate empire, but you’ll also receive the benefits of lawsuit prevention and asset protection.

What is the Series LLC

The Series LLC is similar to traditional LLCs, however, instead of being one big company, the Series LLC is a network of LLCs. It uses a parent-child structure. Your parent company is its own LLC, and it can have as many “children,” or Series, as you have assets to place under the larger umbrella. Each asset will have its own LLC, complete with liability protections and many more benefits

Benefits of the Series LLC

The benefits of a Series LLC are many.

Scalability

With the Series LLC, incorporating new assets is made simple. When you add real estate to your portfolio all you need to do next is a small amount of paperwork and have your attorney add it into the structure. One structure, Infinite assets.

Tax Benefits and Cost Savings

A Series LLC allows for pass-through taxation. Meaning you can avoid substantial corporate taxes and get to file profits on your personal return. For most people, this is quite cost-effective.

Additional savings are apparent when you consider how much it would cost to have each asset in its own traditional LLC and their annual fees. With the Series version, you’re getting an infinite amount of LLCs for the price of one.

Asset Protection Made Simple

A Series LLC offers the most powerful liability protection of any entity one could form. The reason for this is simple: each “Series” holding its own asset keeps it isolated from everything else you own.

How the Series LLC Prevents Lawsuits

You may think that you don’t need any additional protection from lawsuits because you run an ethical business, have insurance, and try to treat your tenants and customers well. Unfortunately, many Americans face a lawsuit at some point in their lives and the reasons landlords are sued varies greatly. Insurance can’t bail you out and neither will your good reputation. Lawsuits don’t even have to be valid or logical to cost you a big chunk of your hard-earned money. To avoid this, you want as much protection as you can get…and the Series LLC can have your back. In addition to being a less attractive target, the Series LLC’s isolation of assets means that if you are sued, only that individual asset is on the line.

How Do I Set Up My Series LLC?

Setting up the Series LLC isn’t difficult, but it needs to be done correctly. Investing in an asset protection plan is one of the best moves you can make as an investor, but if you don’t do it correctly, you won’t get the full benefits of asset protection. One mistake and the plan you’ve put into place could end up being completely ineffective. That’s where LexLaunch can help. It’s never too early to establish or strengthen your asset protection plan.

Don’t leave yourself vulnerable! We’re here to help you set up your Series LLC and everything else you need for a bulletproof asset protection plan. Our experts are here to advise you on what methods will work best for your individual situation. Take action and set up your Series LLC consultation with LexLaunch today.

What Exactly is a Series LLC in Missouri & How to Get Started

Tim Denker — Fri, 12 Apr 2019 20:34:31 +0000

You may be wondering, “what is a series LLC in Missouri?” The Missouri series LLC, enacted in 2013, is a relatively new concept. This structure provides individuals flexibility and asset protection at a fraction of the cost of traditional asset protection strategies.

In Missouri, a Series LLC consists of a limited liability company, known as a “master” or “parent” LLC and any number of “series.” Each series is treated as if it were a separate LLC. It may have separate members, rights, powers, and duties. Most importantly, the assets, debts, liabilities, and obligations of each series may remain separate from those of the other series. You’ll need to maintain separate books and records for each series in order to ensure isolation of the assets and liabilities of each series.

How to get started

Select a name for your Missouri Series LLC

In Missouri, you are required to follow both traditional and series LLC rules when naming your business. The name must include the phrase “limited liability company,” or one of its abbreviations (LLC or L.L.C.). It also needs to include the name of the Series, contains the word “Series” and the entire name of the Limited Liability Company. Keep in mind restricted words (ie. Bank, Attorney, University) may require additional paperwork.

Choose a Registered Agent

Next, you’ll need to nominate a registered agent for your Missouri series LLC. This is a person or business that agrees to send and receive legal papers on behalf of your series LLC. The registered agent needs to be a resident of Missouri or a corporation authorized to transact business in Missouri. We provide this service for a low annual fee and can ensure you don’t miss any important legal deadlines.

File Articles of Organization

To register your LLC, you will need to file the Articles of Organization with the State of Missouri. This process should be done with the help of a legal advisor. They can make sure that the Articles of Organization are completed correctly.

Operating Agreement

In Missouri, all LLCs must have an operating agreement. An operating agreement is a legal document outlining the ownership and operating procedures of an LLC. Your series LLC operating agreement must be carefully written, and the parent LLC as well as each series LLC must have their own operating agreement. Therefore, it is recommended to work with an attorney when creating your Missouri series LLC operating agreement.

Obtain an EIN

The Employer Identification Number (EIN), or Federal Tax Identification Number, is used to identify a business entity. Each of the series in your series LLC may require an EIN. An EIN is required to open a business bank account, for tax purposes and to hire employees.

It is vital to follow each of these steps carefully when forming your Series LLC in Missouri. LexLaunch can help you navigate the process simply and without breaking your budget. We’re here to help you get the personalized legal advice you need when forming your Missouri Series LLC. Contact us today to get started!

You’ve Heard About the Series LLC in Missouri. Here’s Why You May Want One.

Tim Denker — Mon, 25 Feb 2019 16:45:22 +0000

There has been a lot of hype surrounding the new Series LLC laws in Missouri, but what is it and is it right for your business? In basic terms, a Series LLC creates an umbrella that shelters any number of independently operating LLCs (the “Series”) under one “Parent” LLC. However, this is a relatively new form of business ownership and deserves a closer look. Here’s how your business might benefit from a Series LLC in Missouri.

Reduced Start-Up Costs

When forming a Series LLC in Missouri only one filing fee is required. An attorney can set up the parent LLC and multiple series at less cost than setting up multiple LLCs. Once the Parent LLC is formed, the Series is easily added without limit which can greatly reduce your formation costs particularly if you have quite a few assets to protect.

Greater Protection of Assets

Speaking of protection, the assets of each individual Series can be protected from judgments against assets within other Series. For example, a real estate developer could put individual properties each into a separate Series. If there is a lawsuit is brought against one of the properties, the others can be protected.

Less Complex than Corporation/Subsidiary Structure

A series LLC in Missouri doesn’t have the same complexities of taxes, structure, and formalities as a corporation with subsidiaries. Each Series can have different ownership interests, different allocations of profit and loss and different management structure. Each can elect to be taxed differently from the other Series.

Only one tax return

As mentioned above, only the parent LLC is required to file a tax return. If the parent LLC and each Series elect to consolidate into one as a single taxpayer. However, several tax and legal implications could arise. So you will need to work with professionals who are experienced with this type of return.

Although all of these benefits sound great to keep in mind that the decision to form a Series LLC takes careful consideration. If you’re contemplating forming a Series LLC in Missouri contact LexLaunch to talk through your options and get started protecting your assets today!