What is the name of the form that most formation companies (LegalZoom, CorpNet, IncFile, Incorporate.com) use when they act as Organizer, but relinquish and remove themselves and state who the real owners of the LLC are? Is it an affidavit of "som...
Under the NM LLC Act, the 'organizer' is merely the person who signs the Articles of Organization. If the organizer took no other action before or after the LLC was formed, he or she will have no other role or authority with the LLC. In that case, no additional document is necessary. And the organizer is not automatically a member of the LLC.
However, as the other commenter mentioned, it is very important to have a written operating agreement in place for the LLC, and your friend needs to see a NM lawyer right away to get that done.
Iam starting a small Drywall company with my husband, I already got my bond, insurance and I sent in my initial report to the secretary of state, I want to get my EIN from IRS but it asks me how I want to put my company as partnership, corporatio...
I hate to muddy the water here, but actually both of the previous answers are correct and incorrect, in part!
The reason is that Washington, unlike New York, is a community property state. Under IRS statements and rulings, two spouses forming an LLC in a community property state can treat the LLC either as a single member LLC or a multiple member LLC. The single member LLC usually will be a disregarded entity for tax purposes (everything gets reported on the spouses' 1040 return). A multiple member LLC usually will be taxed as a partnership (separate partnership tax return must be filed, but normally no federal tax is paid with that return).
But wait, there's more! The spouses, regardless of being in a community property state or not, can instead elect to have the LLC be taxed as a corporation, usually an S Corp (which is sort of similar to a partnership). The advice about S Corp status should be addressed by a knowledgeable accountant, as a little number crunching may be needed.
Finally, asset protection considerations may also have a bearing on how you decide to set this up. This decision will benefit from the advice of a an experienced business lawyer, who also will need to prepare an operating agreement for the LLC.
Good luck with your new company!See question
I opened a consulting company (LLC) recently and checked with the state is there was another entity with same name and there were none. But once registered I found out that another company with the same name was established in a different state. ...
If you have already decided that you want to change the formal name of the LLC with the Secretary of State, here is the link to get the process started: http://www.sos.wa.gov/_assets/corps/CertOfAmdHUB.pdf .
If you also have trademark and/or trade name concerns about doing business in the other state, that is a different matter, and you should indeed seek legal help.
(I'm presuming this is a business legal question rather than accounting question, since it's about requirements of separation of personal/LLC funds...?) My single-member LLC for consulting is too new for it to get a credit card, but I need to do ...
Your question raises several interesting points. It is, in fact, an accounting issue, but one with legal implications. Your accountant should be advising you on this and similar questions. Generally, it is OK to advance expenses personally on behalf of the company if needed. The company should reimburse you promptly for the amount advanced and the reimbursement should be properly documented. Also, there are specific tax accounting rules for reimbursing expenses paid by credit card.
You refer to the separation of funds "requirement." Although not, strictly speaking, a requirement, it is a very good practice. As you may be aware, single member LLCs are often more vulnerable to creditor attacks than multiple member LLCs. Another very good practice in this regard is having a good, written operating agreement. Many if not most national experts consider this an essential step, even for a single member LLC.See question
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...
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.See question
I'm purchasing a real estate property in California and I'd to use the privacy protection features offered by New Mexico LLC.
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.See question
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...
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!See question
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...
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!See question
To put all LLCs under one parent LLC (even across multiple states)?
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.See question
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.
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).See question