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Legal Steps Every Business Owner Should Take

Lesson 3 of 13

Cost

 

Legal Steps Every Business Owner Should Take

Lesson 3 of 13

Cost

 

Lesson Info

Cost

All right let's talk about how much this baby costs. How much is this LLC going to run? So it really depends, it depends on your state, but here's a quick little breakdown of what you could be looking at. As we said, the sole proprietorship or partnership, if there's more than one of you, that's free. It's by default, it's formed at the moment that you write on the back of the napkin what your business idea is and you hand it over to your partner and you guys throw up a website and go on with your merry lives. That's happening, it's already happened. You don't have to pay for it. An LLC, as a comparison, can cost anywhere from about $50 to $800. California's $800, it's $800 every year, sorry Californians. But you can form in other states, so we'll talk a little bit about that in just a second but what I wanna say that's important about this here is that if you form an LLC, the start-up cost is typically a little bit more expensive and then you're paying an annual renewal fee and some s...

tates even skip this annual renewal fee. So the 50 to $800 to form it is just from the outset and then that's why it says zero to $ for the annual renewal fee. So for example, in California, they're paying $ to renew it. It's seen as a tax here but in Texas, I believe that there is still no renewal fee so you pay 300 bucks to get your LLC set up there and then, you're done. If you want to have a registered agent, this is somebody who is able to accept legal documents on behalf of the company so if you're traveling a lot, if you're moving states, if you're in the military, sometimes it's a great idea to have a registered agent who can accept any kind of legal documents that you might be receiving. So any kind of notices, or subpoenas or things that you maybe don't even think are a possibility right now but later on could become something that you're dealing with. That's who could be accepting those documents for you. They are simply a service and typically they cost anywhere from like 40 or $50 to 100 if you're paying for that service, for somebody to accept these legal documents on your behalf or a lot of times, we can just be our own registered agent and if you are your own registered agent, personally I don't like my address being out all over the internet which is why I suggest that you pay an annual fee for a mailbox that you can use and list that as your business address in case you are operating out of your home or you just don't want your home address on the internet because again, when you file for any kind of government formation, a trademark, an LLC, anything like that, you are putting your address into a public database. So while it's not something that you could just Google your name and find your address, like a white pages type listing, it is something that is public that you can eventually find on the internet. So personally, I would just recommend, this isn't a legal thing, but I would recommend that you get your own mailbox to help you with that privacy. In parentheses down here, we have payroll taxes because we haven't talked about S corporations yet. We haven't gotten that far in the presentation, but an LLC, if it is filing taxes as an S corporation, that is something that you will have the added expense of paying for payroll taxes. So we'll talk a little bit more about that once we get to the S corporation section of the presentation. Okay, so comparing these costs to a sole proprietorship, it can seem a little bit daunting, I admit, to register your LLC. This thing is something that you have to renew. You have to keep up with it. You have to pay all this money. Why would you want this thing? Well because as I stated before, it is something that is legally separate and of distinct from you in your personal capacity so it can have its own address. It can have its own taxes. It can have its own assets. It can pay its own if there's any kind of legal litigation or settlement, it pays out of the business. When you're signing contracts, the LLC is the one who's signing the contract, not you personally to reduce that personal liability that you could otherwise have and so it's almost like an insurance policy in that it is protecting you from any kind of incident that could happen in the course of being a business owner. So while there is an initial start up cost and potentially some renewal cost, it should ultimately be something that you are comfortable with accepting as a business owner because it's something that sets you up for success and allows you to grow and develop and build because you know that you're legally protected and safe and sound and that you can go out there and do the work that you know needs to be done that you want to serve in your communities so that you can continue to grow your purpose and your business without any kind of worry that there could be somebody that comes after you later on.

Class Description


The content and opinions expressed in this course are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem

Brought to you in partnership with

Navigating the legal waters when it comes to your business can feel overwhelming. Attorney Christina Scalera breaks down all the information that you need to know, empowering you to run your business with confidence. This class will teach you:

  • The differences between an LLC, a sole proprietorship and an S corp -- and which one is right for you

  • How to protect your business with legally sound contracts and where to find them

  • What to do when faced with a dispute

By the end of this class, you’ll be able to start the process of setting up your business structure, follow legal best practices and understand the resources available to you.

Ready to protect your business with top-notch legal contracts? Click here to start your free 7-day HoneyBook trial.

By RSVPing to this class, you agree to have your email shared with Honeybook.

Reviews

user-c49d1c
 

Every minute of this is filled with such valuable info! She covers every legal topic you could possibly need to know about as a creative small business owner and clarifies lots of confusing topics. I feel super confident about my small business ownership after watching this. Thank you Christina!

user 139935643048782
 

I loved this course! Covered so many topics I've been wondering about in an easy and understandable way!! Brilliant! Thank you!

KimberlyAnnMurphy
 

Amazing! This stuff can be so hard to try and wrap your brain around but this is simple, easy to follow advice.