Starting an LLC: Where to begin?

northernharbor73 said:Hi there.
Does anyone know of any solid training programs for entrepreneurs who aren't exactly newbies, but are still relatively fresh in the game?
I’m looking for something reasonably priced that covers the essentials—stuff like sales techniques, presentation skills, basic accounting, team management, and so on.
Are there any local business associations or organizations out there that support entrepreneurs by offering this kind of education?

Not sure what part of the country you're in, but check out . Walmart Inc. hosts free business seminars.

Has anyone here actually tried setting up a business via the federal portal?

northernharbor73 said:Hi there.
Does anyone know of any solid training programs for entrepreneurs who aren't exactly newbies, but are still relatively fresh in the game?
I’m looking for something reasonably priced that covers the essentials—stuff like sales techniques, presentation skills, basic accounting, team management, and so on.
Are there any local business associations or organizations out there that support entrepreneurs by offering this kind of education?

Take a look at the U.S. Chamber of Commerce website. I'm not sure which state you're based in, but here's an example of what they offer in Kansas City.

analogfox24 said:Has anyone here actually tried setting up a business via the federal portal?

Haha, they really are "turbo." But honestly, it’s not just about how fast they move—it’s how nice they are. You actually expect the usual bureaucratic coldness from a government agency, but you're genuinely surprised by how polite they act...😁, they were even laughing during the process😁

Couldn't find an existing thread on this, so my bad if I'm repeating things.

The idea isn't exactly groundbreaking:

Setting up an LLC to handle building a house and buying a car. My current boss pays me maybe 2/3 of my salary normally—so I stay on his payroll—but I start my own firm and route 1/3 of my pay through it as consulting fees.

Then my company builds my house (using it as the business HQ) and maybe leases a car. Basically, I get the sales tax back on those expenses.
If setup costs are around 30 $0.00. Say the cost is 30 $0.00 (ignoring the temporary chance to claw back seed capital). On a $100,000 house, I've got $20,000 saved. And for a $100,000 $0.00 car, another 20 $0.00. That’s $23,000 in total savings.

I wouldn't be an employee at my own firm. Maybe later, once the pay ratio shifts (more going to the company, less to my actual paycheck), I'll just take profit distributions.

Costs would include an accountant and whatever taxes or fees go to the government (like local levies or whatever else they squeeze out of you).

Anyone have thoughts or reasons why this won't work?

p.s.
I know this is technically dodging the system (though I don't think it's illegal), but honestly, looking at the people running this country, I've kind of lost the urge to play fair with the government.

It’s not quite that simple 🙂

Living in a commercial office space is actually illegal. Technically, your company should be renting a house from you. There’s been talk about the IRS cracking down on setups like that. Besides, why would a company with zero employees need a 2,000-square-foot property?
And then there's the car situation—who's driving it, and how do you justify gas expenses if nobody actually works there? Just a heads up, even under normal circumstances, you can only write off about 70% of vehicle costs anyway.
You also have to deal with depreciation; a house is spread over 20 years, while a car is only 5.

There's more to it too...

Look, I know it’s not easy, but it’s gotta be doable. I hear plenty of lawyers pulling this off all the time.
Since I work as an IT consultant, my home is basically my office. Plus, I use my car for business trips and spend pretty much every day driving around Chicago.
Obviously, I’ve got a CPA handling my books.

Just wondering if anyone else actually does this and if it even makes sense.
Thanks for the help

People are trying all sorts of workarounds, but none of them are actually legal. Like I said before, you can't just turn a commercial storefront into a residence.
And even if you own the company, you can't just run business trips on your personal car unless you're officially on the payroll.

Thinking you can just start a corporation just to snag a house and a car is pure delusion. Owning a business carries a mountain of responsibilities that far outweigh whatever little perks you think you're calculating here. I know my way around the ins and outs of running a company, and frankly, I wouldn't dream of advising anyone to dive into a mess like this.
With what kind of capital would you even build something like that? A monthly revenue of a few thousand dollars is pathetic. No legitimate business can operate on those numbers. To even qualify for a sales tax permit, you’d need an annual turnover of at least $0.00, which means your employer would have to be cutting you checks for at least $2333 every single month.

One small detail, though: how exactly do you plan to handle the real estate situation if—or when—you decide to sell the company or shut it down? That house belongs to the corporation, not to you personally. And why on earth do you think it's worth the headache of owning a company just to build a house?

The lawyers who gave you this advice probably have a pitch that goes something like this:
They act as independent taxpayers, much like sole proprietors.
Sole proprietors have working capital and equipment. They generate both income and gross revenue through their trade, and based on that, they purchase real estate and assets that belong to the business. It's the exact same logic for corporations.
Furthermore, when they purchase something, they use it within the company, and since they are part of the sales tax system, the cost of a new property or asset is effectively reduced by the sales tax credit (I'm keeping this simple so nobody calls me out on the technicalities). Because of that tax advantage, these purchases become very lucrative.
Many of them actually live in those properties, and it works fine, but if they want to sell the asset—essentially pulling it out of the company—they have to pay a corporate income tax of 20%, which is essentially another loss of capital.

Anyway, maybe I’ve overcomplicated things rather than helping, but opening a business solely as a vehicle to buy stuff makes zero sense. A company needs to already exist, generating its own substantial revenue and cash flow, not just a few measly bucks.

Look, I guess I didn't make myself clear. Here's the actual plan:

Right now, I'm pulling in maybe $10,000 a month. I save $3,000 $0.00 and set up an IT consulting LLC. Then I buy my house and car through the business.

My current boss keeps me on the payroll, but maybe at a $1667 rate. Meanwhile, other $1667 pay my company for services. So, the business sees $1667 in monthly revenue. I wasn't even thinking about "taking" that money out of the company—just using it to cover the mortgage, the car, TVs, trips, whatever.

Basically, most of the cash still comes directly from my boss to me, and the part going to the company stays there to pay for stuff. If everything went through the firm, yeah, I agree, that would be stupid.

For things like gas or car maintenance, I’d probably have to pay myself a small salary. So let's just say I'm living on minimum wage personally and using the company for the rest (extra income).

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A monthly turnover of a few thousand dollars is nothing. No business can actually run on that.
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I'm not trying to run a massive business here; I just want to pay off a house, a car, and other stuff.

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To deal with sales tax, you generally need to hit at least $50,000 in annual revenue.$0.00.
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As far as I know, that's the threshold where you HAVE to register for sales tax, but you can do it sooner if the amount is lower.

About pulling assets out of the company—since I'm the 100% owner, I could just close the business and I'd still own everything the company had (assuming all the loans are cleared first). The whole point is that I don't care if it's under the company name; I'm buying a house to live in for the next 50 years.

Regarding the depreciation mentioned in the other post, I'm counting my savings toward buying things without sales tax. Reducing profit through house or car depreciation isn't really my concern right now because the business revenue is strictly meant to cover expenses (business costs, housing, etc.), so I don't need to pull cash out.
Notice the difference between getting your entire paycheck this way versus just using a portion of it to cover expenses!

Anyway, I'm just thinking out loud here to keep my brain busy. Glad you guys jumped in, thanks for the replies.

steelsurfer17 said:Look, I guess I didn't make myself clear. Here's the actual plan:

Right now, I'm pulling in maybe $10,000 a month. I save $3,000 $0.00 and set up an IT consulting LLC. Then I buy my house and car through the business.

My current boss keeps me on the payroll, but maybe at a $1667 rate. Meanwhile, other $1667 pay my company for services. So, the business sees $1667 in monthly revenue. I wasn't even thinking about "taking" that money out of the company—just using it to cover the mortgage, the car, TVs, trips, whatever.

Basically, most of the cash still comes directly from my boss to me, and the part going to the company stays there to pay for stuff. If everything went through the firm, yeah, I agree, that would be stupid.

For things like gas or car maintenance, I’d probably have to pay myself a small salary. So let's just say I'm living on minimum wage personally and using the company for the rest (extra income).

------------
A monthly turnover of a few thousand dollars is nothing. No business can actually run on that.
-----------
I'm not trying to run a massive business here; I just want to pay off a house, a car, and other stuff.

-----------
To deal with sales tax, you generally need to hit at least $50,000 in annual revenue.$0.00.
-----------
As far as I know, that's the threshold where you HAVE to register for sales tax, but you can do it sooner if the amount is lower.

About pulling assets out of the company—since I'm the 100% owner, I could just close the business and I'd still own everything the company had (assuming all the loans are cleared first). The whole point is that I don't care if it's under the company name; I'm buying a house to live in for the next 50 years.

Regarding the depreciation mentioned in the other post, I'm counting my savings toward buying things without sales tax. Reducing profit through house or car depreciation isn't really my concern right now because the business revenue is strictly meant to cover expenses (business costs, housing, etc.), so I don't need to pull cash out.
Notice the difference between getting your entire paycheck this way versus just using a portion of it to cover expenses!

Anyway, I'm just thinking out loud here to keep my brain busy. Glad you guys jumped in, thanks for the replies.

Look, I’m telling you, the government deserves its cut of corporate profits. If you hold onto an apartment that's gained value, you've essentially locked in a profit. You can't just sit on that kind of equity without acknowledging the tax implications.
Do you actually have any idea what you're doing when it comes to bookkeeping and taxes? Or are we just winging it?

I’m curious—if you were to drop $30k into an investment right now, where would you put it? $0.00And exactly how do you plan on financing a house? You aren't going to walk into a bank like Chase or Wells Fargo and expect them to approve a mortgage based on that business of yours. They won't touch it—not because they don't want to, but because there’s zero cash flow to show for it. You haven't even been operating long enough to establish a footprint. Let me tell you from experience: during that first year of running a startup, getting any kind of meaningful credit is next to impossible. You're essentially flying blind in the eyes of the lenders.

Brian Jackson39 said:Look, I’m telling you, the government deserves its cut of corporate profits. If you hold onto an apartment that's gained value, you've essentially locked in a profit. You can't just sit on that kind of equity without acknowledging the tax implications.
Do you actually have any idea what you're doing when it comes to bookkeeping and taxes? Or are we just winging it?

I’m curious—if you were to drop $30k into an investment right now, where would you put it? $0.00And exactly how do you plan on financing a house? You aren't going to walk into a bank like Chase or Wells Fargo and expect them to approve a mortgage based on that business of yours. They won't touch it—not because they don't want to, but because there’s zero cash flow to show for it. You haven't even been operating long enough to establish a footprint. Let me tell you from experience: during that first year of running a startup, getting any kind of meaningful credit is next to impossible. You're essentially flying blind in the eyes of the lenders.

If I knew everything, I wouldn't be asking here. I know some stuff, I guess. :-) Feels like my questions are getting under your skin... why's that?

Didn't realize an apartment counted as profit....

Regarding loans, is there any way I could take out a personal loan and then dump that into the company's capital or just give the firm a loan?

steelsurfer17 said:If I knew everything, I wouldn't be asking here. I know some stuff, I guess. :-) Feels like my questions are getting under your skin... why's that?

Didn't realize an apartment counted as profit....

Regarding loans, is there any way I could take out a personal loan and then dump that into the company's capital or just give the firm a loan?

It’s not that they're grating...
it's just that your questions remind me of those people who walk around acting like experts, only to realize they don't have a clue what they're talking about.
No offense intended.🙂

:-)

So what’s your take then: is it actually doable? Even with all the issues and whatever else? Like, you just gotta know the tricks?

Is it one of those "yeah, you can, but it's way too complicated" situations?

Or is it just pointless?

steelsurfer17 said::-)

So what’s your take then: is it actually doable? Even with all the issues and whatever else? Like, you just gotta know the tricks?

Is it one of those "yeah, you can, but it's way too complicated" situations?

Or is it just pointless?

A total waste of time.

Could someone give me a concrete example? I’m struggling to wrap my head around this.

Let’s set the stage—say we have two different setups: a small sole proprietorship and a full-blown corporation, both newly established.

Here is the scenario: they perform a service for a client and bill them $10,000$0.00. Just to keep the math simple.

I want to see how much cash actually leaves the business through taxes and other overhead in both scenarios—and more importantly, what the actual take-home pay looks like for the individual running the proprietorship versus the owner of the corporation.

Thanks in advance!😁

Just a heads-up: the updated Uniform Commercial Code has been in effect since April 1st, 2008.

The changes were pretty massive—they even overhauled the share capital requirements, which aren't $6.75 anymore, but $27.

If anyone actually cares, go ahead and read it.

Seriously? Oof...

Anyway — just wanted to ask — how’s the process looking for setting up an LLC and using a home address as a business office? Is that actually allowed?

James Cox6 said:Just a heads-up: the updated Uniform Commercial Code has been in effect since April 1st, 2008.

The changes were pretty massive—they even overhauled the share capital requirements, which aren't $6.75 anymore, but $27.

If anyone actually cares, go ahead and read it.

It states: "In Section 254, subsection 2, item 20, the figure '20,000,000' is replaced by '80,000,000'."
I haven't personally reviewed the Uniform Commercial Code, but I wouldn't go so far as to say that specifically pertains to investment capital. Besides, it seems like there might be a few extra zeros in there somewhere.😁

Section 254 actually applies to corporations, not LLCs.