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LLC and EIN questions

Discussion in 'Business & Tax Advice' started by pooka, Jan 8, 2010.

  1. pooka

    pooka Newbie

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    Im a noob so bear with me.

    What is the best state for opening a llc.
    From some other threads, it seems like new mexico and nevada are good places. What are other good places.

    Also, I heard that if a company from state A is operating in state B, like in my case California, it needs to pay taxes to State B. If this true?

    Also, If i have a out of state llc, can it have bank account in the state?

    Also, im under the age of 18, which is why I beleive that a LLC+EIN would be better than providing my SSN.

    Regarding the EIN, it is like the SSN of companies if i am not mistaken. But can someone clarify this for me?

    Thanks in advance.
     
  2. Grandslam

    Grandslam Senior Member

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    Disclaimer: I am NOT an attorney. This is not legal advice in any way, shape, or form.

    We are marketers, not corporate attorneys. Interview some attorneys and see if their opinions differ. Hint: ask about Wyoming...
     
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  3. bobbys

    bobbys Regular Member

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    Do a search for the book "how to be invisible" by JJ Luna and do a little reading on his website. He reccomends new mexico llc's because there is no state database that holds information on who it's been sold/transferred to beyond the initial formation. He also has links to services that will sell you preformed New Mexico LLC's, which is a little self serving but he's legit and has quite a famous reputation. I've purchased one and applied for a EIN and opened a bank account with one without any issue.

    When you go to the bank just tell the person you speak to that you purchased a business LLC from someone out of state and would now like to open your own account for the LLC. The company on JJ Luna's site will send you the articles of incorporation as well as a receipt proving you purchased the LLC and are now the owner. You will need both. If one bank gives you any problems just thank them for their time and go down the street to another and ask the same question. I was able to open a business account in the LLC's name at my own banking branch.

    This won't help you to..ahem..dodge taxes..as you will need to apply for a EIN by giving your SS number, but it will provide a level of protection from anyone who wishes to bring a frivilous lawsuit against you or find your assests or personal information as they would not be able to match your name to any LLC listed in a state database, especially your own. I was told by a lawyer that someone would have to actually go through the trouble of finding the bank you have the account with and filing a subpoena in your home state for the bank to reveal your personal information, in which case you could hire a lawyer to try to supress and deny the supboena, thus dragging it out even longer and making it extremely hard for anyone to find you.
     
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  4. pooka

    pooka Newbie

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    Ive read the JJ Luna book.
    It was pretty good.

    Right now, it seems like NM is my top pick.
    However though, won't i need to file taxes and stuff with NM and the feds?
    Is it gonna be easy turbotax kinda stuff or will I need to hire a CPA.
    Also, am I gonna have to pay taxes and what not to the CA gov?

    Thanks for the fast responses.
     
  5. Grandslam

    Grandslam Senior Member

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    Disclaimer: I'm not an attorney. This following does not substitute as legal advice.

    Yikes. I wouldn't touch that guy with a 100 foot pole. Wyoming has one of the best liability protection laws in the US. I've talked to some of the best corporate attorneys in the nation. They've never even mentioned New Mexico as a viable option. They'll find your bank account, state database or not. Hint: "charging orders"
     
  6. pooka

    pooka Newbie

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    Can you elaborate more on Wyoming?
     
  7. freaky1718

    freaky1718 Newbie

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    ahhh any bank would still ask you for your ssn and to open a checking account regardless of the ein number you still have to be 18 years or older.
     
  8. Grandslam

    Grandslam Senior Member

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    I'm really not the one to ask - I'm not an attorney, as I've reiterated.

    Google should be your friend on this one I would think. Let me know if you can't find anything.

    Actually, use google to find some attorneys that specialize in corporate entity formation and interview them, after alll, if you're serious you're going to need to find a competent corporate attorney. Don't try to half ass it with legalzoom, you'll have more work later...
     
    Last edited: Jan 8, 2010
  9. publisher

    publisher Junior Member

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    Pay a local attorney his/her hourly rate $200 or so and ask any and all questions you want. You could be out of there in 30 min. or less and get exactly what you're looking for.

    It will be well worth the invesment to get set up right before you even start.

    It goes way beyond the basic question of what's the best state to open an LLC in.
     
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  10. bucaneerx

    bucaneerx Registered Member

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    dude not an attorney but "common and or uncommon knowledge" is that it's either delaware or nevada.
     
  11. pooka

    pooka Newbie

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    What kind of an lawyer should I go see.
    A tax lawyer or a corporate lawyer? (not sure what the proper term is for a lawyer who does company related stuff)
     
  12. billygood

    billygood Senior Member

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    what your first question should really be is:

    What sort of protection do I need ?

    the way I have set up my life is that each venture is it's own company, that company is controlled by another company ( a holding type company ). I do use LLC's and C Corps

    now the big problem is understanding charging orders and dirty tricks against those that win against you.
     
  13. java

    java Guest

    Exactly. Your choice of location depends on what you are trying to accomplish.
     
  14. Grandslam

    Grandslam Senior Member

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    Disclaimer: I'm not an attorney. This should not be substituted as legal advice.

    Do you know how many scam artis- I mean lawyers are making a killing off the "delaware myth"? Delware sucks. Get with the times - laws change if you haven't noticed.

    "Common knowledge is uncommon... Delaware's a no go!"
     
  15. pooka

    pooka Newbie

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    OK then, ill go speak to a tax attorney.
     
  16. ddawg0169

    ddawg0169 Newbie

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    Guy, it sounds like you haven't even attempted at doing some basic research on your own. Your question of what an EIN is could easily be answered by the Googles. Sort of makes it tough to want to help out when you're being Lazybones Mcgoo.

    That being said, check out this thread:
    http://www.blackhatworld.com/blackhat-seo/business-tax-advice/72985-llc-law-has-melted-my-brain.html

    Also, to answer another one of your questions: An LLC is just a pass-through entity, meaning any profits or losses directly pass through to your personal income return. If you setup an LLC in say New Mexico but lived in Cali, Cali will tax your LLC income, not NM. Unless you're selling merchandise in NM, you won't owe them anything...except of course, your soul.

    //not sure about the soul thing. double check on that
     
  17. spdgxp

    spdgxp Newbie

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    As mentioned previously, an LLC is a pass-through entity for taxation purposes. Profits will be taxed as income for you, personally, in the state in which you reside. So your first question is answered in the affirmative.

    You can have an out-of-state corporate account for your business. Banks will vary in what they need for you to make this possible. HSBC, for example, requires you to get permission to do business in the state in which you want to open an account. Other banks may not have this requirement. Shop around, but don't let this be a deciding factor: Banks vary wildly in the level of service they'll offer to you, and this can really make a difference down the line.

    I would be shocked if you can do anything in your own name given that you're under 18. You will almost certainly need a legal guardian to cosign any bank accounts you open. In fact, you'll probably need a legal guardian just to file the paperwork to create a corporate entity.

    Don't halfass starting a company, if you intend to make this a long-term project for you.

    Here's my suggestion. Go here:

    Code:
    http://www.abanet.org/legalservices/lris/directory/home.html
    It's a legal referral service, which means super-cheap access to legal advice; in my city, for example, the cost is $35 for a 30 minute session with a lawyer. Find your state/city and get a legal referral for your area. You typically fill out an online form or give them a call and they'll give you the name of a few lawyers with expertise in what you're looking for. You should be able to get all your questions answered.

    Good luck mate. :)
     
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  18. liquidrage

    liquidrage Junior Member

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    New hampshire, Nevada, and Florida are all good. Google those before you decide.

    They all are really good at protecting companies/entities from b/s lawsuits and Florida and Nevada don't have state tax..I'm not sure about New Hampshire.
     
  19. portalweb

    portalweb Supreme Member Premium Member

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    Wyoming and NM are the good choices for establishing your LLC for your business, only when dealing with Internet-based business only. Retail-based business - Nevada would be the next choice. Hint: Microsoft and Amazon have their LLC businesses operating in Nevada to avoid paying the additional taxes.

    spdgxp's post on LLC/EIN is very good.
     
  20. ecielam

    ecielam Newbie

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    I recently spent a nice amount of money on a lawyer who set up a nice set of LLCs, trusts, and corporates that will segment my potential liabilities and risk. I highly recommend finding a local asset protection atty and hiring them. May not be super cheap, but well worth the money.