Starting a business

[lbuttery]

Charles:

my LLC in VA cost $500 to setup and $50/year to VA
and now $69/year for a VA registered agent since I live in NY now

no other expenses...

Lew

[Charles Volz]

Lew,

I am not sure without looking it up but I think I paid ~$700 to set up an LLC in the early 1990's and about $500 per year in personal property tax and franchise fees, together.

[lbuttery]

Charles:

different states - different rules ....

Lew

[perryh]

In Calif L.L.c. 800 a year

[Architex]

Depending on what state you are in your house cannot be taken from you if it is our sole residence through a lawsuit. At least in Texas it is that way. I would suggest an llc mainly since it is a good shield and a good way to get out of some of the self employment taxes. As for franchise taxes, you normally have to reach a certain threshold before you owe iirc it is $750k in texas. And since this will be part time you probably will not hit it.

I have a sub s corp since I did not know about llc when I did it years ago.

[Chad Cardin]

Im curious if the protections of sole proprietor or corporation are different if the person is lets say a licensed architect versus a designer.

[lbuttery]

Chad:

the higher the training - the higher the liability

regardless of business form

the courts can and will "pierce the vail" - especially in cases of fraud

since every state and situation can vary it is wise to consult an attorney
who specializes in construction/design law

Lew

[barkeatr]

also call your state board for architecture and make sure you understand practicing without a license rules for that state.

[lbuttery]

practicing without a license rules for that state


Yes

here in NY an architect must create or supervise the creation of EVERY page

in VA/MD/DC they only need to do that for pages needing their expertise

Lew

[diyconsulting]

Putting assets into your spouses name does not protect you from losing them unless she purchased those assets BEFORE she became your spouse. To think that they are safe from being taken from you by having them in your spouses name, is a totally false belief!

My point was not to stop legal liability, but to help ensure that you ensure all of your hard earned assets (in your case from another career not drafting business) are not so easily taken from you in the event that you stuff up (considering this is a new venture, anyone telling you that you wont make mistakes that may leave you open to a civil lawsuit is a foolish naive liar!)

For those who naively refuse to accept life's realities (considering we live in a world of "facical civil lawsuits"), take a look at many sucessful honest businesses and directors and tell me they do not do any of the following...lease equipment, have family trusts set up for holding personal assets, use companies!

Protecting personal wealth is not about being dishonest...its about keeping the idots from stealing them from you by finding a lawyer who is corrupt enough to want to file a negligence claim for stupid things.

Take the following real life example...(i know the builder personally)

20 years ago builder constructs a retaining wall and fence between two properties. It's location, whilst not entirely conventional, was agreed to and documented in a signed builders contract by both owners. However, at the time of the filing of the lawsuit and due to the passing of time, only the builder and original owner 1 had that contract!

5 years later, owner 1 sells up and moves away. AT some point new owner and property owner 2 have a neighborly argument about something completely unrelated to fence and retaining wall. To make a point, property 2 decides to make new owner 1's life **** and remembers the location of the retaining wall was not quite right (although approved by council and signed in a contract by both original owners). He takes new owner 1 to court claiming the retaining wall is in wrong place.

After about a number of years of legal battles, they both run out of money fighting each other (legal bill was at $60k). New owner 1 and 2 decide that they will now find someone else to sue...namely the draftsman, Earthmoving contractor and Builder.

Earthmover tells both owners to get stuffed as he wasn't fully paid for the job ($5,500 unpaid by original owner 1 who failed to pay him full amount for job).

I don't know what happened with draftsman as i didn't know him personally.

The builder (who is a very good friend of mine, and built a house for former Australian representative rugby league football captain Andrew Johns) found himself having to dish out $3000 and lost a couple of days in wages, hiring a barrister and heading to the city 150kms away from where he lives, having the suit against him and his business thrown out of court!

The fact is, the liability costs may not be attributable to one being held to account for a mistake. It may simply be the cost in proving that you did not make a mistake!

[lbuttery]

here is a nice summary article about business forms and protecting assets and 'piercing the veil"

http://www.nolo.com/legal-encycloped...ity-29905.html

Lew

[Architex]

here is a nice summary article about business forms and protecting assets and 'piercing the veil"

http://www.nolo.com/legal-encycloped...ity-29905.html

Lew

Decent article. They point out a very important point which I think a lot of people over look. You have to make sure if you have an LLC or corp you must keep all your records, meetings, minutes, etc. are correct and up to date. This is one of the easiest ways to pierce the veil.

[lbuttery]

Jay:

an LLC can be a single person which the IRS treats as a sole proprietorship

if so, then there is no need for a board of directors or meetings or minutes

but it is important to not comingle funds and to sign contracts etc as the LLC

IOW, conduct business as a business (as best possible)

Lew