May

15

After some research and talking to a CPA, I’ve decided that both of the businesses that my fiancee and I will create will be structured as multi-member Limited Liability Companies (LLCs), and that they will likely be taxed as S-Corporations (LLCs can be taxed as any other corporate or partnership entity). I will own 51% of the real estate investment company and my fiancee will own 51% of the communications company.

While I’ve set up corporations before, I’ve never done so in Georgia (where we will be operating), and I’ve never started a business that would provide as much legal exposure as my real estate company will potentially have. So, instead of setting up the companies myself this time, I’ve decided to spend the money to have a law firm — who specialize in incorporation in Georgia — take care of filing the Articles of Incorporation and other forms.

While having the firm do this isn’t cheap (around $400 per company), the peace of mind it provides in this case is worth the cost.

I submitted my information for both companies to the law firm today, and I expect that the companies will be fully set up by the time we get to Atlanta in a few weeks.


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2 Comments On This Thread

  1. Don on May 16, 2008 11:42 am

    I’d be curious if you shared with us what they provide you with when it’s all said and done. I had an s-corp once that I used a legal service for (www.legalzoom.com). Other than the fancy binders and stock certificates I got, after looking over the paperwork I quickly realized that they really didn’t do anything that I could have done on my own, by following simple instructions on the state’s website.

    I live in Maryland and am about to form an LLC for real estate investing (without the help of an attorney). I currently have an S-corp that I used for doing side work, that I will let expire come 2009. I am in the same boat as you only:

    1. I haven’t quit my day job
    2. I’m just now in the start of my quest to get into real estate investing

    I currently work as a computer programmer (web developer), so we also share similar backgrounds. I look forward to following you on your journey and hope to share my experiences as well. You may want to consider setting up a discussion forum at some point as your reader base grows.

  2. J Scott on May 16, 2008 9:32 pm

    Hey Don…

    I absolutely agree that it’s much cheaper to do the incorporation yourself, and if I was already settled in Georgia, I’d probably do the research and do it myself.

    But, we don’t head out until next week, and I’d really like to have the businesses set-up by the time we get settled, so it’s worth spending the money to get it done right and get it done quickly.

    Specifically, what the firm I’m using offers for the price is:

    - Do a business name search
    - Create Articles of Organization
    - File Articles of Organization
    - Create Standard Operating Agreement
    - Forms and memorandums for all other necessary filings
    - Binder, Certificates, Company Seal, etc.

    I’m going to need to create separate LLCs for each of the properties I intend to buy, and I will certainly set those up myself when the time comes.