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Robert Pampell

Robert Pampell’s Answers

17 total

  • I'm starting a home e-commerce LLC in New Mexico. Can I use my registered agent's address for the principal place of business?

    I'm filing the articles or organization myself at the New Mexico secretary of state website. My registered agent said I could use their address for the principal place of business and for the mailing address. They said I could even use their addre...

    Robert’s Answer

    If you are a New Mexico resident, you do not need a different registered agent. You can do that yourself. If it makes sense for your business purposes, you can use your home address as both the registered office and your principal address.

    Use that same address for your EIN and your mailing address, if you like.

    I have formed hundreds of NM LLCs, many of which use the type of setup I suggested.

    The one thing I would add – please do an operating agreement for your LLC. Many if not most of the top national LLC attorneys recommend this, even for single member LLCs. This should be prepared by a NM attorney and usually can be done for a very reasonable fee. Other options may exist, but these would need further discussion.

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  • Can you use a New Mexico LLC to hold Real Estate in California?

    I'm purchasing a real estate property in California and I'd to use the privacy protection features offered by New Mexico LLC.

    Robert’s Answer

    Yes, you can do this and I have done this for clients.

    You need to be aware of the doing business requirements in California. Depending upon what kind of property this is, you might be required to register the LLC to do business in CA. If so, this will involve time and expense. Also, if the LLC includes one or more CA residents as members, the LLC may have to CA franchise tax. These are issues that should be addressed by a CA attorney or CPA.

    Regarding the "privacy protection features" you referred to: As you may know, NM does not require disclosure of the identities of the member(s) or manager(s) of the LLC. That is true at the time of formation and later on, as no annual reports are required to be filed. A number of web sites out there would have people believe that one can 'disappear' by setting up a NM LLC. This advantage is overblown in my view. If a plaintiff or other interested person wants to find the member(s) badly enough, there are other ways to do that.

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  • Changing executors in the original LLC Statement of formation

    Hi - i started an LLC in WA state last year. I accidently ended up including both me and my husband's name as members/executors in the articles of incorporation. He has not played in the company. I now want to amend the records to reflect the corr...

    Robert’s Answer

    The previous answer correctly points out that you cannot achieve the result you want here by amending the certificate of formation. You have to do that by amending the operating agreement (in the LLC Act, this is referred to as the "limited liability company agreement").

    If you do not have an operating agreement (or some other document or documents that could be construed to be an operating agreement) signed by all of the members, then all of the members (i.e. you and your husband) will have to consent in writing before he can properly withdraw from the LLC.

    The Secretary of State does not address these kinds of operational matters and thus has no forms to do this. It is not difficult, but there may be other things that need to be addressed, such as accounting and tax issues, depending upon what the company has done since it was formed.

    Probably time to pay a visit to your friendly neighborhood attorney!

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  • What steps and forms do I need to know to transfer ownership and dissolve an LLC. Can I do this or do I need to hire an atty?

    Have an LLC that was formed in 2012 in WA state. It just owns an undeveloped lot on Vashon Island, Washington. We want to dissolve the LLC - no need for it anymore. There have been no income etc so no distribution of capital is required. Simpl...

    Robert’s Answer

    This may be one of those rare instances where it may be feasible to handle it yourself. I rarely advocate this, for reasons pointed out by the other commenters, but it may work here.

    The main problem comes in knowing what questions you need to ask. For example, what kind of deed would you use to transfer the property? A quitclaim deed might be sufficient, but a title company might raise an issue with that when the members later want to sell the property.

    Did the LLC have activities and dealings with third parties that could have created issues or liabilities that are best addressed by an attorney?

    Will there be Real Estate Excise Tax exposure due to the transfer, or can that be avoided? Have you consulted with a tax expert – attorney or CPA – with regard to other possible tax issues in the transfer and dissolution?

    If you feel you can run all of these and other traps successfully, you can find forms for real estate deeds on this web site and others. The Secretary of State has a form for a simple Certificate of Dissolution.

    Good luck, whichever path you choose!

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  • Can an LLC in one state own another LLC in a different state?

    To put all LLCs under one parent LLC (even across multiple states)?

    Robert’s Answer

    Let me try my hand at synthesizing and clarifying the previous answers, all of which make good and valid points.

    As I general matter, no state's law prohibits or significantly restricts the ability of an LLC (or any other business entity, for that matter) to own an LLC in that state. In fact, a law that purported to do so probably would be unconstitutional! Many if not most state LLC statutes are based on some version of the Uniform Act (with many variations), which does prohibit such ownership.

    The parent LLC may or may not be required to register to do business in the 'target state' (i.e. the state where the lower tier LLC is formed). In many states, mere ownership of an entity in that state will not – by itself – constitute doing business in that state. But there may be exceptions to this, and those should be examined. Also, note the tax issues discussed below.

    It is best to document the ownership of the 'target state' LLC by the top tier LLC through the operating agreement of the 'target state' LLC. In some states, that would be the only sure way of doing so, as those states do not require the owners to be stated in the official records. In any case, a well-drafted operating agreement is essential for the vast majority of LLCs. A typical operating agreement would not specifically prohibit an LLC from owning – or being owned by – another LLC. But if the 'target state' LLC is an existing company with other owners, the operating agreement may restrict the ability to change the ownership in favor of the top tier LLC.

    Regarding tax issues, if the 'target state' LLC is going to elect to be taxed as an S corp, it could not have the parent LLC as an owner (with one minor, technical exception). The parent LLC on the other hand, even if electing to be an S corp, would not be restricted as to owning a lower tier (subsidiary) entity. For federal income tax purposes, single member LLCs are not taxed separately from their owner(s) (the term is 'disregarded entity') – unless they elect to taxed as corporation, including an S corporation. Regarding state tax matters, it is quite true that LLC ownership by out of state persons or business entities may subject the out-of-staters to tax in the 'target state'

    As stated in some of the other answers, this is a very complex, technical are; it is very easy to make a mistake. A transaction such as you are proposing should never be attempted without the involvement of an experienced business attorney and tax adviser.

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  • As a consultant, do I need a business license in every location that I client might be?

    If I am licensed as a consultant in Kent, Washington, can I (1) market to and (2) assist clients in other cities or states without having licenses in those areas? I would be operating in Kent, but not limiting business to that.

    Robert’s Answer

    • Selected as best answer

    I agree with the previous answer, but I would add the following. Certain trades, such as contractors, may have to get a local business license in different localities in which they are engaged on jobs. That sort of thing may or may not apply to you. You can check on local business license requirements by browsing the Access Washington web site. I believe there is a link somewhere in the WA Business License page.

    Regarding other states, you would need to concern yourself with whether your activities there constitute "doing business" under the laws of the other state(s). These laws vary from state to state and the respective statutes (usually corporation or LLC statutes) contain a partial list of exceptions; other exceptions and clarifications may have been made in court cases in the other state(s).

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  • I own a MO LLC. I now live in NM do I need to register the MO LLC as a foreign LLC in NM?

    The business is a service business and I talk to clients on the phone. The clients I talk to are potentially all over the world.

    Robert’s Answer

    The question whether you need to register the foreign LLC in NM may depend on whether you are only "transacting business in interstate commerce." Truck drivers hauling interstate loads, for example, are sometimes exempt under this exception. Without examining the specific facts pertaining to your business conducted through the LLC, it is hard to say whether you will have to register. As suggested in the previous answer, you probably will want to resolve any doubt in favor of registering.
    Also, you could be exempted from registration under the LLC Act and still have to register with other agencies such as the Taxation & Revenue department.

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  • Establish a new LLC, or create DBA?

    I own an LLC in NM that is a tools, parts and equipment sales company. All my sales are on a pick up and deliver basis. I'm wanting to, hopefully, increase sales a little by selling the smaller (easy to ship) inventory I carry through an onlin...

    Robert’s Answer

    Hello, I would agree with and expand on the previous answers as follows. The sole proprietorship is the simplest of all forms of business enterprise. It's just you (and perhaps your spouse) going into business for yourself. The sole proprietor is the owner and sole manager of the business and is responsible for all debts, claims and obligations of the business. A sole proprietorship has "pass-through" taxation. The business itself does not file a tax return; rather, the income and deductible expenses of the business "pass through" and are reported on the owner's personal tax return. The sole proprietor lists the profit or loss information for the business on Schedule C which is then attached and filed with the owner's Form 1040. Actually, even as a sole proprietor, you can keep a separate set of books for accounting purposes.

    I do not believe New Mexico has state-level DBA registration, although some cities/counties have something similar. A statewide trade name registration is possible.

    An LLC, of course, is a separate legal entity. You did not say whether your existing LLC or your potential new one are single member LLCs. If so, you can be a disregarded entity for federal income tax purposes, or you can elect to be taxed as a corporation (most likely an S corp). Electing S corp status or not is a complex question that must be addressed by a qualified CPA or tax attorney. A multiple member LLC is taxed as a partnership by default, but can also elect corporation tax treatment.

    Another consideration for single member LLCs (as opposed to those with multiple members) is that they may not offer effective protection of the assets (including the inventory) owned by the company, in the event of a claim against the sole member. See, for example, ... Recent Updates. If set up and run correctly, however, the LLC offers protection of the owner's assets from judgments against the LLC, in much the same way as a corporation.

    Finally, echoing some of the other comments, I would strongly advise against setting up the LLC yourself. I have never seen a DIY LLC that was done correctly, and you can find similar comments from business lawyers on the web.

    Good luck with your business expansion!

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  • What rights do shareholders and options holders have to inspect cap table for Washington corporations?

    RCW 23B.16.020 says that stockholders have the right to inspect and copy records of the company and lists a bunch of records. The cap table is not specifically listed. Is it considered one of the records of the company and do shareholders have the...

    Robert’s Answer

    By "cap table" I assume you mean a capitalization table listing each class of security of the corporation and, for each such class, the number of shares authorized and outstanding, as well as the book value of the shares. For some purposes, the amount of long term debt is included in a cap table. The market value of the outstanding stock, however, would not necessarily be included, and often is difficult to determine in the case of a non-public corporation.

    To my knowledge, a cap table is not a record required to be maintained by the corporation and, therefore, would not have to be produced upon shareholder request. Having said that, the company balance sheet (per RCW 23B.16.200) is such a record. Most if not all of the information typically contained in a cap table might be derived from the balance sheet if it is prepared according to GAAP accounting.

    Also, if you have not already done so, you could request a copy of a cap table if one exists, or at least a listing of the information you would need for your purposes. Of course, if you are not a shareholder, the company might be hesitant to provide that.

    The information you mentioned by reference to the Delaware statute might or might not be contained in shareholder meeting minutes or consents, as well as excerpts of directors' meetings, which are obtainable under the Act. Even so, you would have to determine which minutes and/or consents to request.

    I doubt that an option holder would have similar rights, but that could be researched by your attorney.

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  • Concerns using home address to register LLC

    If I use my home address to register LLC in WA, does my house count as corporate asset instead of personal asset? Or in other words, is it possible that I may lose my house if my corporate get sued and lost the case?

    Robert’s Answer

    Hello - Yes, the previous two answers are correct. In fact, it is quite common for persons forming LLCs to use their home address as the registered office and/or principal business address.

    So your home should not be considered an asset of the LLC unless you were to deed it over to the LLC. In any event, your home (principal residence) is exempt from many judgments by virtue of the 'homestead exemption' in Washington.

    For your other personal assets, they generally would not be available to satisfy a judgment against the LLC, IF the LLC is formed and operated correctly. Many people do not take the proper steps in the process of organizing their LLC, which sometimes leaves their personal assets exposed to judgments against the LLC. This is called 'piercing the corporate (here, LLC) veil.'

    So it would be a good idea to make sure the LLC is properly documented – preferably with an operating agreement – and is properly funded and operated in the future.

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