Need help forming a LLC for my clinic.

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newyorker
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Need help forming a LLC for my clinic.

Post by newyorker »

Hi Guys,

I need some help with forming a LLC for my dental clinic. Actually 2 LLCs. One PLLC for dental clinic and LLC for the building.

My lawyer charges over $1000 per each formation and recommended me to not waste money on using him and use legalzoom or other websites of such sort.

Do you guys have any recommendation on how to do this? I heard from other forums that legalzoom may even be a waste of money and I can do the whole thing by myself.

Thank you.
johnny
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Re: Need help forming a LLC for my clinic.

Post by johnny »

I used Rocket Lawyer to establish my LLC. Costs about $200-300 depending on your service choices. I found them to be helpful guiding me through the process. Really easy to do through an online service (not sure it would be that easy to figure out myself).
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newyorker
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Re: Need help forming a LLC for my clinic.

Post by newyorker »

johnny wrote: Fri Aug 14, 2020 5:27 pm I used Rocket Lawyer to establish my LLC. Costs about $200-300 depending on your service choices. I found them to be helpful guiding me through the process. Really easy to do through an online service (not sure it would be that easy to figure out myself).

Thank you johnny. Was it a painless process? And did they provide a registered agent?

I am planning for a LLC in a state that does not have an online service (thus I have to mail in documents). Wonder if its worth a hassle or if I should simply use service as rocket lawyer.
Colorado Guy
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Re: Need help forming a LLC for my clinic.

Post by Colorado Guy »

newyorker wrote: Fri Aug 14, 2020 4:59 pm
I need some help with forming a LLC for my dental clinic.
FYI, I have an appointment next week with a local county Small Business Assistance group, to help me through the LLC formation process. Essentially free, as it is paid for by my taxes. It is very possible that your state / county has something similar. In the meantime, am reading a couple of books this weekend regarding LLCs pros and cons (which I got from the library).
Topic Author
newyorker
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Re: Need help forming a LLC for my clinic.

Post by newyorker »

Colorado Guy wrote: Fri Aug 14, 2020 6:30 pm
newyorker wrote: Fri Aug 14, 2020 4:59 pm
I need some help with forming a LLC for my dental clinic.
FYI, I have an appointment next week with a local county Small Business Assistance group, to help me through the LLC formation process. Essentially free, as it is paid for by my taxes. It is very possible that your state / county has something similar. In the meantime, am reading a couple of books this weekend regarding LLCs pros and cons (which I got from the library).

My county is too broke to offer it lol. Btw are you taking a business loan for this? I assume one must be a personal guarantor for the loan right?
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Thrifty Femme
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Re: Need help forming a LLC for my clinic.

Post by Thrifty Femme »

Why do you need a LLC?
Topic Author
newyorker
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Re: Need help forming a LLC for my clinic.

Post by newyorker »

Thrifty Femme wrote: Fri Aug 14, 2020 7:42 pm Why do you need a LLC?
I believe for tax purpose.


Btw, did you guys do operating agreement? Seems like I have to pay a lawyer to make this thing and it's just a small business run by myself and the state does not require it to be filed. Can it be made later?
GeMoney
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Re: Need help forming a LLC for my clinic.

Post by GeMoney »

mcraepat9
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Re: Need help forming a LLC for my clinic.

Post by mcraepat9 »

You didn’t mention what state your LLC is being organized in, below is for New York:

For a PLLC in NYS you need to apply to the NYS Education Department for approval to file articles in the NYS department of state and form your PLLC. Many professional filing services will not do this for NYS PLLCs. But the Edu Dept has pretty good step-by-step instructions on how to do this as well as a fillable form of articles of organization.

I’m sure you are aware of NY’s LLC publication requirement? Most legalzoom-type services will not help you with compliance with this requirement.

Operating agreements for NY LLCs can be adopted within 90 days of formation. A single-member operating agreement is pretty straightforward.

I think you can do the whole thing yourself if desired.
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TheDDC
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Re: Need help forming a LLC for my clinic.

Post by TheDDC »

Pay the lawyer to do it. $1000 is well worth it to have it done right. This is your livelihood after all.

-TheDDC
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Thrifty Femme
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Re: Need help forming a LLC for my clinic.

Post by Thrifty Femme »

newyorker wrote: Fri Aug 14, 2020 9:12 pm
Thrifty Femme wrote: Fri Aug 14, 2020 7:42 pm Why do you need a LLC?
I believe for tax purpose.


Btw, did you guys do operating agreement? Seems like I have to pay a lawyer to make this thing and it's just a small business run by myself and the state does not require it to be filed. Can it be made later?
You should search this site for llc taxes especially if you are a sole proprietor. There are cases where a llc might not save on taxes. Good luck. Also the White Coat Investor site might be useful for you.
mcraepat9
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Re: Need help forming a LLC for my clinic.

Post by mcraepat9 »

Thrifty Femme wrote: Sun Aug 16, 2020 11:13 am
newyorker wrote: Fri Aug 14, 2020 9:12 pm
Thrifty Femme wrote: Fri Aug 14, 2020 7:42 pm Why do you need a LLC?
I believe for tax purpose.


Btw, did you guys do operating agreement? Seems like I have to pay a lawyer to make this thing and it's just a small business run by myself and the state does not require it to be filed. Can it be made later?
You should search this site for llc taxes especially if you are a sole proprietor. There are cases where a llc might not save on taxes. Good luck. Also the White Coat Investor site might be useful for you.

+1 - i highly doubt this provides any income tax savings for you. It does provide some liability protection for contracts signed in the name of the LLC. It also helps if you are in a partnership or employees, since you would not be personally liable for torts committed by another partner or by an employee. But for a one-person shop, you are always responsible for torts you commit regardless of whether you are an LLC
Amateur investors are not cool-headed logicians.
Siglinde
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Re: Need help forming a LLC for my clinic.

Post by Siglinde »

The fee is reasonable. You are doing this for liability and if it is not done correctly you will regret it when you get sued. There is no tax benefit as LLCs are pass through entities for the IRS. An accountant may be cheaper , but again determine why you are doing this.
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newyorker
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Re: Need help forming a LLC for my clinic.

Post by newyorker »

Siglinde wrote: Sun Aug 16, 2020 6:41 pm The fee is reasonable. You are doing this for liability and if it is not done correctly you will regret it when you get sued. There is no tax benefit as LLCs are pass through entities for the IRS. An accountant may be cheaper , but again determine why you are doing this.

Its more for corporate veil i heard. But my lawyer suggested doing it myself instead of spending $1000 on him.
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JonnyDVM
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Re: Need help forming a LLC for my clinic.

Post by JonnyDVM »

Your lawyer is overcharging you. I had one done for a couple hundred dollars. I know it was done right and I didn’t have to post to a bunch of random strangers asking about it. You want it done correctly and you want all your energy focused on other aspects of your new business. In my case, I did it myself the first time but I had to have my lawyer change it because I didn’t do it quite right.
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J295
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Re: Need help forming a LLC for my clinic.

Post by J295 »

1. Obtain an understanding as to why you are doing this and what the financial and legal ramifications are. If you don’t understand why you are doing it, get professional assistance from a lawyer and/or accountant. If you’re not understanding why from The consultations you have had with your current lawyer, either go back to him/her for clarification or consider another lawyer.

2. Implement the required decision as needed, either diy or with legal counsel.
Topic Author
newyorker
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Re: Need help forming a LLC for my clinic.

Post by newyorker »

J295 wrote: Sun Aug 16, 2020 7:40 pm 1. Obtain an understanding as to why you are doing this and what the financial and legal ramifications are. If you don’t understand why you are doing it, get professional assistance from a lawyer and/or accountant. If you’re not understanding why from The consultations you have had with your current lawyer, either go back to him/her for clarification or consider another lawyer.

2. Implement the required decision as needed, either diy or with legal counsel.



I have a lawyer working with me and he suggested doing diy as doing it is much cheaper and as a single owner llc, operating agreement is not needed and if needed, can be added later.
CascadiaSoonish
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Re: Need help forming a LLC for my clinic.

Post by CascadiaSoonish »

TheDDC wrote: Sat Aug 15, 2020 11:34 pm Pay the lawyer to do it. $1000 is well worth it to have it done right. This is your livelihood after all.
Agreed. $1K shouldn't be a big deal. And that $1K also establishes the relationship down the line when and if there are issues or modifications needed with the LLC. Also helps to have the attorney talking with the CPA to make sure things are set up optimally. I used to avoid paying for these types of services but now I see the value in having someone just take care of it correctly and being there later when we need to revisit it for whatever reason.
J295
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Re: Need help forming a LLC for my clinic.

Post by J295 »

newyorker wrote: Sun Aug 16, 2020 7:51 pm
J295 wrote: Sun Aug 16, 2020 7:40 pm 1. Obtain an understanding as to why you are doing this and what the financial and legal ramifications are. If you don’t understand why you are doing it, get professional assistance from a lawyer and/or accountant. If you’re not understanding why from The consultations you have had with your current lawyer, either go back to him/her for clarification or consider another lawyer.

2. Implement the required decision as needed, either diy or with legal counsel.



I have a lawyer working with me and he suggested doing diy as doing it is much cheaper and as a single owner llc, operating agreement is not needed and if needed, can be added later.
Ok. Use whatever online service he recommends. If he hasn’t recommended one yet, ask him.
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newyorker
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Re: Need help forming a LLC for my clinic.

Post by newyorker »

CascadiaSoonish wrote: Sun Aug 16, 2020 7:56 pm
TheDDC wrote: Sat Aug 15, 2020 11:34 pm Pay the lawyer to do it. $1000 is well worth it to have it done right. This is your livelihood after all.
Agreed. $1K shouldn't be a big deal. And that $1K also establishes the relationship down the line when and if there are issues or modifications needed with the LLC. Also helps to have the attorney talking with the CPA to make sure things are set up optimally. I used to avoid paying for these types of services but now I see the value in having someone just take care of it correctly and being there later when we need to revisit it for whatever reason.
I feel like I posted a reply to you but it hasn't showed up in the thread so I'll post again.


I am usually the type of person to pay a professional to do it for me as I can concentrate on something that matters in the meantime. But, my lawyer, who is reputable and recommended by my friends, is telling me to not waste money and do it myself so I'm a little confused.
Bobby206
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Re: Need help forming a LLC for my clinic.

Post by Bobby206 »

I'd say you will waste more time and take on unnecessary risk doing it yourself.

You might look for a lawyer that gets this and wants to do the work for you.

$1,000 is very reasonable for a reputable business attorney. In my area of California it's $2k+ for a single member LLC being set up by an experienced business lawyer. $1,000 is a great deal if they know what they are doing.

The main reason you are doing LLCs is for liability protection. If it's done wrong you lose the liability protection.

Focus on marketing your business not DIY legal work. You'll come out way ahead in the long run! Do what you do best!

Good luck!
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newyorker
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Re: Need help forming a LLC for my clinic.

Post by newyorker »

Bobby206 wrote: Sun Aug 16, 2020 8:26 pm I'd say you will waste more time and take on unnecessary risk doing it yourself.

You might look for a lawyer that gets this and wants to do the work for you.

$1,000 is very reasonable for a reputable business attorney. In my area of California it's $2k+ for a single member LLC being set up by an experienced business lawyer. $1,000 is a great deal if they know what they are doing.

The main reason you are doing LLCs is for liability protection. If it's done wrong you lose the liability protection.

Focus on marketing your business not DIY legal work. You'll come out way ahead in the long run! Do what you do best!

Good luck!
Thank you.

Man! You guys are convincing me to spend some $$$. I guess it's worth it in the long run. Yeah, the purpose of LLC formation, esp for dentists, is corporate veil.
Bobby206
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Re: Need help forming a LLC for my clinic.

Post by Bobby206 »

newyorker wrote: Sun Aug 16, 2020 8:30 pm
Bobby206 wrote: Sun Aug 16, 2020 8:26 pm I'd say you will waste more time and take on unnecessary risk doing it yourself.

You might look for a lawyer that gets this and wants to do the work for you.

$1,000 is very reasonable for a reputable business attorney. In my area of California it's $2k+ for a single member LLC being set up by an experienced business lawyer. $1,000 is a great deal if they know what they are doing.

The main reason you are doing LLCs is for liability protection. If it's done wrong you lose the liability protection.

Focus on marketing your business not DIY legal work. You'll come out way ahead in the long run! Do what you do best!

Good luck!
Thank you.

Man! You guys are convincing me to spend some $$$. I guess it's worth it in the long run. Yeah, the purpose of LLC formation, esp for dentists, is corporate veil.
LLC's, at least in my state, don't protect most professionals from professional malpractice unfortunately. However, you can add a layer of protection for other types of liability. However, insurance is much more important than an LLC in my opinion. An LLC only works to limit liability to the assets in that LLC. So, for example, if someone walks in to your office and slips and falls and causes a million dollars of injury to themselves they will sue you for $1mil. They could just take the asset of the LLC (the building potentially or the AR of the dental business if that's where they sue) so it's still something you want to protect with insurance. Get a good business insurance person and listen to them. Large deductible and high limits! I think we have $3m at work and maybe we raised it to $4k last year. Good luck.
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newyorker
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Re: Need help forming a LLC for my clinic.

Post by newyorker »

Bobby206 wrote: Sun Aug 16, 2020 8:37 pm
newyorker wrote: Sun Aug 16, 2020 8:30 pm
Bobby206 wrote: Sun Aug 16, 2020 8:26 pm I'd say you will waste more time and take on unnecessary risk doing it yourself.

You might look for a lawyer that gets this and wants to do the work for you.

$1,000 is very reasonable for a reputable business attorney. In my area of California it's $2k+ for a single member LLC being set up by an experienced business lawyer. $1,000 is a great deal if they know what they are doing.

The main reason you are doing LLCs is for liability protection. If it's done wrong you lose the liability protection.

Focus on marketing your business not DIY legal work. You'll come out way ahead in the long run! Do what you do best!

Good luck!
Thank you.

Man! You guys are convincing me to spend some $$$. I guess it's worth it in the long run. Yeah, the purpose of LLC formation, esp for dentists, is corporate veil.
LLC's, at least in my state, don't protect most professionals from professional malpractice unfortunately. However, you can add a layer of protection for other types of liability. However, insurance is much more important than an LLC in my opinion. An LLC only works to limit liability to the assets in that LLC. So, for example, if someone walks in to your office and slips and falls and causes a million dollars of injury to themselves they will sue you for $1mil. They could just take the asset of the LLC (the building potentially or the AR of the dental business if that's where they sue) so it's still something you want to protect with insurance. Get a good business insurance person and listen to them. Large deductible and high limits! I think we have $3m at work and maybe we raised it to $4k last year. Good luck.

Seems like you are in healthcare profession as well. Malpractice will be covered by my malpractice insurance. I plan to have 2 LLCs. One PLLC for the clinic itself and LLC for the building (to prevent slips/falls cases). And it will cost me $2500 including processing fee. Did you have your lawyer take care of them? Preferably I'd like to do that too but $2500 is a lot of money but at the same time, I don't want to be penny wise and pound foolish.
Bobby206
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Re: Need help forming a LLC for my clinic.

Post by Bobby206 »

I would have an experienced business lawyer set everything up at the outset. Sometimes there can be reasons that a corporation makes more sense than an LLC for the professional practice so I would confirm with CPA and business attorney about this. I would get everything set up at the beginning, do it right, and then go focus on making money! Good luck!
000
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Re: Need help forming a LLC for my clinic.

Post by 000 »

I would not wrap my business in an LLC. I would lose the right of pro se representation with regard to business litigation.
johnny
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Re: Need help forming a LLC for my clinic.

Post by johnny »

newyorker wrote: Fri Aug 14, 2020 6:16 pm
johnny wrote: Fri Aug 14, 2020 5:27 pm I used Rocket Lawyer to establish my LLC. Costs about $200-300 depending on your service choices. I found them to be helpful guiding me through the process. Really easy to do through an online service (not sure it would be that easy to figure out myself).

Thank you johnny. Was it a painless process? And did they provide a registered agent?

I thought it was pretty painless. Walked me through the Q&A concerning the filing. Then they helped me generate an operating agreement as required. Yes, they do registered agent.
Frugalbear
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Re: Need help forming a LLC for my clinic.

Post by Frugalbear »

In my line of work, I've seen people really mess things up when creating their LLC, then even more when they try to run payroll themselves, handle 941's, nys45's etc.

Then you will be hiring a CPA to remediate all the issues. Leave this stuff to the experts and concentrate on what you know best. Godspeed!
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newyorker
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Re: Need help forming a LLC for my clinic.

Post by newyorker »

Frugalbear wrote: Sun Aug 16, 2020 11:15 pm In my line of work, I've seen people really mess things up when creating their LLC, then even more when they try to run payroll themselves, handle 941's, nys45's etc.

Then you will be hiring a CPA to remediate all the issues. Leave this stuff to the experts and concentrate on what you know best. Godspeed!



Thanks man! If its coming from “frugal”bear that i spend money for it, ill do it




johnny wrote: Sun Aug 16, 2020 10:48 pm [quote=newyorker post_id=5433384 time=<a href="tel:1597446964">1597446964</a> user_id=161321]
[quote=johnny post_id=5433279 time=<a href="tel:1597444046">1597444046</a> user_id=142525]
I used Rocket Lawyer to establish my LLC. Costs about $200-300 depending on your service choices. I found them to be helpful guiding me through the process. Really easy to do through an online service (not sure it would be that easy to figure out myself).

Thank you johnny. Was it a painless process? And did they provide a registered agent?


[/quote]
I thought it was pretty painless. Walked me through the Q&A concerning the filing. Then they helped me generate an operating agreement as required. Yes, they do registered agent.
[/quote]


Thank you!!
Kennedy
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Re: Need help forming a LLC for my clinic.

Post by Kennedy »

I've filed LLCs in two states. It was easy as can be. If you've never done it before, I'm guessing your only question would be whether your LLC will be member managed or if you will have a manager. I know how I would (and have) answered that question, and I'm sure you could figure out what will work best for you (member managed for me).

Why don't you look at your state's paperwork and see if you can do it yourself? For my LLCs, it was literally just checking a couple of boxes and writing in my name and address.

If you have any questions on specific questions after looking at the forms, maybe you could post here for suggestions? And someone mentioned needing to publicize for a certain number of weeks. That's easy to do, too, and I would bet your Secretary of State (or whatever department) has a FAQ section or detailed instructions for a do-it-yourself filer.

To me, it seems silly to hire a lawyer for $1000 for something this simple. Your lawyer advised you to do it yourself for a reason.
neverpanic
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Re: Need help forming a LLC for my clinic.

Post by neverpanic »

It's a combination of things. I am not an attorney, but I am frugal and always investigate DIY first. Your attorney gave you his "I don't really want to do it" price.

The actual creation and filing of an LLC is simple an inexpensive in most every state. Ok, I've only filed in 3 states myself, but they were incredibly easy. As a prior poster stated, have an understanding of why you're creating your PLLC. There is no different tax treatment for it.

As for your Registered Agent, there's no shortage of providers in NY if you choose to use a service for this.
I am not a financial professional or guru. I'm a schmuck who got lucky 10 times. Such is the life of the trader.
Seasonal
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Re: Need help forming a LLC for my clinic.

Post by Seasonal »

newyorker wrote: Sun Aug 16, 2020 7:51 pm
J295 wrote: Sun Aug 16, 2020 7:40 pm 1. Obtain an understanding as to why you are doing this and what the financial and legal ramifications are. If you don’t understand why you are doing it, get professional assistance from a lawyer and/or accountant. If you’re not understanding why from The consultations you have had with your current lawyer, either go back to him/her for clarification or consider another lawyer.

2. Implement the required decision as needed, either diy or with legal counsel.
I have a lawyer working with me and he suggested doing diy as doing it is much cheaper and as a single owner llc, operating agreement is not needed and if needed, can be added later.
You should understand why your lawyer recommends this from a substantive point of view, such as tax or liability protection. Your main liability issue would be liability for your own acts and an LLC won't protect against those and tax is pass-through, as others have noted.
tibbitts
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Re: Need help forming a LLC for my clinic.

Post by tibbitts »

I operated my business as an LLC once due mostly to a customer requirement, which I didn't agree with, but it was an important customer. After reading this thread I think the OP should just sell the clinic, become an employee, and not have to worry about any of this. That wasn't an option for me for most of my career, but it sounds like it would be for the OP.
Bobby206
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Re: Need help forming a LLC for my clinic.

Post by Bobby206 »

000 wrote: Sun Aug 16, 2020 9:58 pm I would not wrap my business in an LLC. I would lose the right of pro se representation with regard to business litigation.
I believe this varies by state and certainly it's a consideration for people that are big DIYers. However, I would suggest it's probably smarter to focus on the primary income source and leave litigation (even frivolous litigation) to the lawyer. I believe you come out way ahead in the long run paying people to do what they are good at so you can focus what you are best at. I have seen many people, in many different businesses, be so unfocused in their business that they lose money (even when they think they are doing themselves a favor by being a DIYer. I have found that the more focused I have become, the more ancillary business I have declined, hiring professionals to do a lot of things that I could do if I wanted to but I don't, the more efficient my team has become, and thus the more money I have made while working less. For me that's the ultimate goal - more income with less work. Just my observation.
retire2022
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Re: Need help forming a LLC for my clinic.

Post by retire2022 »

TheDDC wrote: Sat Aug 15, 2020 11:34 pm Pay the lawyer to do it. $1000 is well worth it to have it done right. This is your livelihood after all.

-TheDDC
+1 cost of doing business, while
I believe you should be aware of LLC concepts don’t be too frugal to do short cuts. A qualifed attorney would setup the business correctly, esp in regards to Operating Agreement.

Would you want a first year dental student to work on your clients without experience?

Think of liability and taxation.
Perkunas
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Re: Need help forming a LLC for my clinic.

Post by Perkunas »

Pay a pro. A couple of thousand dollars for a 1-time expense is nothing in the grand scheme of things.

Setting up an LLC is not terribly difficult. Setting it up properly, in a way that protects you to the fullest extent possible, for (potentially) decades to come, is worth ~$2k.

One issue I've noticed in my home state (NC) is that people who use something like LegalZoom oftentimes have their LLC annual report renewals (accidentally) sent to some LegalZoom corporate address where it goes to the shred bin completely ignored. Then, a year or two down the road, the NC Secretary of State dissolves the LLC because the annual reports haven't been filed. The member/manager of the LLC has/had no clue of the requirement to file the simple paperwork 1x/year, nor did they receive the reminders at their own address. But, hey, they saved a few hundred bucks.

It's a pitfall that might never come back to haunt you, but if it does, you might wish you had spent the $2k up-front.
000
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Re: Need help forming a LLC for my clinic.

Post by 000 »

Bobby206 wrote: Mon Aug 17, 2020 9:38 am
000 wrote: Sun Aug 16, 2020 9:58 pm I would not wrap my business in an LLC. I would lose the right of pro se representation with regard to business litigation.
I believe this varies by state and certainly it's a consideration for people that are big DIYers. However, I would suggest it's probably smarter to focus on the primary income source and leave litigation (even frivolous litigation) to the lawyer. I believe you come out way ahead in the long run paying people to do what they are good at so you can focus what you are best at. I have seen many people, in many different businesses, be so unfocused in their business that they lose money (even when they think they are doing themselves a favor by being a DIYer. I have found that the more focused I have become, the more ancillary business I have declined, hiring professionals to do a lot of things that I could do if I wanted to but I don't, the more efficient my team has become, and thus the more money I have made while working less. For me that's the ultimate goal - more income with less work. Just my observation.
Hiring professionals is fine. But being dependent on them is not. If "someone" can find a way to confiscate the entity's assets, the entity will have no way to hire an attorney to represent itself and the owner cannot.
Bobby206
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Re: Need help forming a LLC for my clinic.

Post by Bobby206 »

000 wrote: Mon Aug 17, 2020 3:11 pm
Bobby206 wrote: Mon Aug 17, 2020 9:38 am
000 wrote: Sun Aug 16, 2020 9:58 pm I would not wrap my business in an LLC. I would lose the right of pro se representation with regard to business litigation.
I believe this varies by state and certainly it's a consideration for people that are big DIYers. However, I would suggest it's probably smarter to focus on the primary income source and leave litigation (even frivolous litigation) to the lawyer. I believe you come out way ahead in the long run paying people to do what they are good at so you can focus what you are best at. I have seen many people, in many different businesses, be so unfocused in their business that they lose money (even when they think they are doing themselves a favor by being a DIYer. I have found that the more focused I have become, the more ancillary business I have declined, hiring professionals to do a lot of things that I could do if I wanted to but I don't, the more efficient my team has become, and thus the more money I have made while working less. For me that's the ultimate goal - more income with less work. Just my observation.
Hiring professionals is fine. But being dependent on them is not. If "someone" can find a way to confiscate the entity's assets, the entity will have no way to hire an attorney to represent itself and the owner cannot.
I don't understand your reply. The owner of the entity will hire an attorney to defend it. Assets don't generally get "confiscated." The plaintiff would bring a lawsuit against the LLC and the LLC would hire an attorney to defend it. That legal counsel would likely be paid by the insurance company. Hiring good professionals is a good thing. Sometimes being overly reliant on one's own "knowledge" can be a mistake.
000
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Re: Need help forming a LLC for my clinic.

Post by 000 »

Bobby206 wrote: Mon Aug 17, 2020 8:52 pm I don't understand your reply. The owner of the entity will hire an attorney to defend it.
What if there is no money?
Bobby206 wrote: Mon Aug 17, 2020 8:52 pm Assets don't generally get "confiscated."
lol
Bobby206
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Re: Need help forming a LLC for my clinic.

Post by Bobby206 »

000 wrote: Mon Aug 17, 2020 8:54 pm
Bobby206 wrote: Mon Aug 17, 2020 8:52 pm I don't understand your reply. The owner of the entity will hire an attorney to defend it.
What if there is no money?
Bobby206 wrote: Mon Aug 17, 2020 8:52 pm Assets don't generally get "confiscated."
lol
If there is no money, but there is an asset in the LLC to protect, the owner of the LLC (who wants to protect their asset) would use their other money to hire an attorney. Though the LLC separates out the assets for liability purposes it's all really part of the same pot that the person is trying to protect. If the assets of the LLC are valueless then maybe they let the plaintiff attach the assets though that can be risky because what if the plaintiff goes after other assets with "pierce the corporate veil" type theory!? Also, your insurance will usually pay for defense counsel unless it's an exclusion in your policy.

As to the lol I would guess you are confusing various subjects as I am not sure what you are trying to convey here. I will try to help educate you a little though I am not an expert here. LLC assets do not get confiscated in lawsuits. The LLC would need to lose a lawsuit and then there can be situations where an LLC's assets could be attached but that's rare. Also, we are talking about lawsuits related to that LLC ("inside liability"). There also can be situations where an owner has legal risk somewhere else and they want to get protection against their interest in an LLC being taken ("outside liability"). This is why people hire top notch business law attorneys of which I am not one. For example, some people utilize Nevada LLCs because they have better creditor protection than LLCs in many other states vis-a-vis their charging order protection. I don't know how else to reply to "lol" but hope that helps.

Good day sir.
000
Posts: 3294
Joined: Thu Jul 23, 2020 12:04 am

Re: Need help forming a LLC for my clinic.

Post by 000 »

Bobby206 wrote: Mon Aug 17, 2020 9:25 pm
000 wrote: Mon Aug 17, 2020 8:54 pm
Bobby206 wrote: Mon Aug 17, 2020 8:52 pm I don't understand your reply. The owner of the entity will hire an attorney to defend it.
What if there is no money?
Bobby206 wrote: Mon Aug 17, 2020 8:52 pm Assets don't generally get "confiscated."
lol
If there is no money, but there is an asset in the LLC to protect, the owner of the LLC (who wants to protect their asset) would use their other money to hire an attorney. Though the LLC separates out the assets for liability purposes it's all really part of the same pot that the person is trying to protect. If the assets of the LLC are valueless then maybe they let the plaintiff attach the assets though that can be risky because what if the plaintiff goes after other assets with "pierce the corporate veil" type theory!? Also, your insurance will usually pay for defense counsel unless it's an exclusion in your policy.

As to the lol I would guess you are confusing various subjects as I am not sure what you are trying to convey here. I will try to help educate you a little though I am not an expert here. LLC assets do not get confiscated in lawsuits. The LLC would need to lose a lawsuit and then there can be situations where an LLC's assets could be attached but that's rare. Also, we are talking about lawsuits related to that LLC ("inside liability"). There also can be situations where an owner has legal risk somewhere else and they want to get protection against their interest in an LLC being taken ("outside liability"). This is why people hire top notch business law attorneys of which I am not one. For example, some people utilize Nevada LLCs because they have better creditor protection than LLCs in many other states vis-a-vis their charging order protection. I don't know how else to reply to "lol" but hope that helps.

Good day sir.
Exercise for the reader: what does "civil asset forfeiture" mean?

I can think of many, many circumstances (of varying degrees of severity) under which both the LLC and owner can simultaneously have solvency
issues. Since the most valuable asset of most business owners is the business, being unable to represent it can become very bad for the owner. Great for lawyers though. Hmmm... maybe that's why incorporation is so widely recommended?
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