# LLC Setup Checklist



## BLieve (Jan 4, 2009)

I am currently attempting to setup an LLC on my own and I would appreciate it if someone with experience can give me some pointers. At the moment, based off the fact that I am the only investor and only "employee" I believe my steps to take are the following. 

1. File for Business Structure and Name $200
2. File for Certificate of Authority to Collect Tax (No fee)
3. File for Federal Employer Identification Number (No fee) 
-Can someone confirm if I need to file for an EIN if I am the only employee? According to this checklist from the IRS, it doesn't look like I would need to as none of the points listed apply to me.
4. Contact local county clerk to make postings in local newspapers for six consecutive weeks as proof of business registration. 
-What is the best way to go about contacting the local county clerk? And how much would step 4 generally cost?

I believe this is all I need to be concerned about. I appreciate any help I can get with this situation.


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## gapipkin (May 29, 2011)

Its different for each state. What state and county are you located?


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## GN (Aug 1, 2011)

In Florida your steps are correct except that after you file for LLC, THEN you file for an EIN (and get it instantly) then you file for the resale certificate (and get it a few days later unless you go in person and pay the fee) and you don't need to do a newspaper listing. And yes you need an EIN.


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## binki (Jul 16, 2006)

Step one: Start over and file as a c-corp. A much better entity. 

If you want to be an LLC then in the PRC you don't file with the county if you are an LLC. I would get an EIN so you don't have to use or SSN with vendors if they ask for it. The county will find you and bill you for property tax. 

You need a business license and bank account. You will need your articles of agreement to open the bank account. 

you made need to get permits to operate your business and you also may need to be licensed for the type of work you do.


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## GN (Aug 1, 2011)

binki said:


> Step one: Start over and file as a c-corp. A much better entity.


Why would you say it's a better entity for someone just starting out? I asked this question a while back and it went un answered for a while. I kept doing my research and talked to business owners (local) and lawyers and came to the conclusion that LLC is the better way to go if you're just starting out. I weighed all the pros and cons and the LLC barely tipped the scales that is until I found out I could file as an LLC with a S chapter catagory. So that made it the best of both worlds. 

Why do you think going C corp from the beginnig is better than LLC? (and going C corp was the worst route to go after all my research [for a start up])


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## binki (Jul 16, 2006)

GN said:


> Why do you think going C corp from the beginnig is better than LLC? (and going C corp was the worst route to go after all my research [for a start up])


 

C-corps are 

the only recognized non person entity
can have retained earnings
can provide unlimited (virtually) cash and non-cash benefits that are not taxable
can have a fiscal year other than a calendar year
There are others. I would direct you to Ker$tetter Letter® and http://www.taxguru.org/corps/corp.html for more information but let me tell you from experience with both organizations that if you have an LLC and you have a large profit it will flow through to your personal 1040 and you will have to pay income taxes on that amount. 

You can also create a c-corp that has benefits like paying for all non covered medical, something you cannot do with any other entity. 

S-corps are under scrutiny from the IRS because of abuses. 

One benefit of an LLC is that the IRS has not ruled on weather payroll taxes should be calculated on distributions, so it is possible you could not pay payroll taxes on some or all of your income.


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## BLieve (Jan 4, 2009)

I am located in New York. 

The common conclusion here is that LLC is easier and less expensive to set up and the better option for starters. 

GN, can you elaborate on what S Chapter is?


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## tbolla (Sep 4, 2011)

I have set up both entity types and have found the LLC to be much less complicated. Depending on the state, the costs are lower tax wise in most cases.

I found LegalZoom to be a great resource as well.


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## Ludasmith (Sep 1, 2011)

LLC is fine. 

Regarding the FEIN, just go ahead and get it. We have our independent contractors get them for the home care business I work for. I can't remember why it was recommended but they said it is becoming standard practice in that industry with the independent contractors. I figure if it's recommended for someone that isn't even a "business" it'd be recommended for any sort of formal business entity. Your accountant knows it isn't a big deal so don't worry about it complicating anything. 

I've never heard of #4? Are you saying that's how you get your local business license? NC and FL we just go to the city and pay a couple $$.


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## binki (Jul 16, 2006)

Ludasmith said:


> I've never heard of #4? Are you saying that's how you get your local business license? NC and FL we just go to the city and pay a couple $$.


that is normally for dba's and sole prop's. it is a county registration rather that a state entity. 

you would only do that with an llc/llp c/s corp if you did biz as a dba. 

something like Home Cookin', LLC DBA Chicken in a Pot. 

Your business would be Chicken in a Pot, your signage, web site, etc.

The 'Parent' would be Home Cookin'


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## binki (Jul 16, 2006)

tbolla said:


> I have set up both entity types and have found the LLC to be much less complicated. Depending on the state, the costs are lower tax wise in most cases.
> 
> I found LegalZoom to be a great resource as well.


+1 on legalzoom to set it up. 

In CA the tax rate on personal is 9.55% at 48K. There is a minimum tax for Corp or LLC of $800 

So if you made 250K and you are an LLC you will pay $800 plus 9.55%. If you are a ccorp you would pay 8.84%.


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## Neon Bible (Mar 24, 2010)

The c Corp issue really depends on if you have employees and how you structure the biz. You also need to do your unemployment tax and workers comp for payroll/ ss. Legalforms.com has a good deal for $99 biz setup.


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## Ludasmith (Sep 1, 2011)

Shouldn't need FUTA or SUTA if he's the only employee, nor the other goodies.


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