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hey guys this is robert with malawi law we help entrepreneurs just like you start their businesses without dealing with the complicated legal forms and we are also the number one highest rated business law firm for entrepreneurs with more than fifteen hundred five star google reviews today we are going to talk about whether you should dissolve your llc if you are no longer using it and whether you can put your llc on hold to avoid paying fees so many of our clients formed llc's in the past and they no longer use them and they wonder if they should dissolve it or not they also realize that they have been getting notices from the state informing them that they owe money despite the llc making no money or even operating at all and for our clients they're wondering if they have to pay these fees or the money to the state so in this video i'm going to address both of these questions so let's get started also keep in mind that unlike sole proprietorships where p where there is not a whole lot you have to do to wind up the business or close the business with llc that's a little bit more complicated and you'll likely have to file some documents with your secretary of state so first let me inform you that dissolving your business is another name for closing or shutting down your business so to begin or so to begin let me explain that one of the common reasons people choose to dissolve their llc's when they are no longer conducting business is to avoid paying the annual state renewal fees to keep the llc active if your llc is no longer conducting business then you can't just simply do nothing and you can't just not pay the state the annual fees if you do do this then the state may continue to charge you the annual fees and may even charge you interest on certain fees that they have not been paid eventually the state will also suspend your llc and you will continue to rack up these fees and once this happens then the state will not let you officially dissolve the llc until all taxes and fees have been paid so in reality you will just continue to incur the annual state fees until you pay the state what it is owed and properly dissolve the llc for example some states such as delaware will charge you a 200 late fee and will also charge you interest if you don't pay the franchise tax fee so in order to avoid these late fees and penalties and potentially the interest fees then it is important to officially dissolve your llc the right way and in accordance with your state's requirements so ultimately there is no need to be alarmed if your llc has been inactive but be sure to not wait too long to dissolve it otherwise you risk having to pay hefty fees to your state of incorporation so now you're probably wondering how to properly dissolve your llc and generally dissolving your business just involves filing a form to the business division of your state's secretary of state's office the state may also require that you pay the state fee and send payments along with the dissolution documents for some states there is no charge and for others the fee can be hundreds of dollars it is important to check with the business division at your secretary of state's office to find out the exact procedure so overall don't get too overwhelmed if you're in this situation but keep in mind that you shouldn't wait too long if you are no longer using your llc then it is important to dissolve it so that you can avoid getting hit with many of the fees and potential interest payments also some states won't let you officially dissolve the llc until you pay everything that is owed to them so it is important to not just let your llc incur fees each year because eventually the state will try to collect the money from you so if you're an entrepreneur looking to dissolve your business or start a business in the united states then click on the link below to schedule a free consultation with us during the phone call we will be able to determine your specific requirements to dissolve the llc in your state and we will explain the advantages of doing so and we can also determine if you should keep your llc opened and just use it for a different business purpose so go ahead and click the link below and also if you have any questions just post them below and my team and i will try to get to them as soon as possible i'll see you guys in the next video
Thanks for your comment Skye Frasca, have a nice day.
- Herb Pilger, Staff Member
hey gang jim hart back at you here from hawthorne law are you operating your business as an llc did you form an llc recently and are you wondering whether or not you're handling everything properly now that you've started your llc today's video i'm going to share with you all the things that you need to do once you start your llc to make sure you don't mess everything up with your business moving forward hey my name is jim hart i'm the founding attorney here at hawthorne law we help online businesses and entrepreneurs to get their legal house in order so that they can focus on doing what they do best and that's helping other people and building their business and building something that is truly magical and wonderful in the world that is going to really change lives and today i'm here to talk with you about the things that you need to do after you have started your llc to make sure that your business is protected moving forward now most online entrepreneurs will start out as a sole proprietorship and if you're not making any money and you don't have any clients that's probably the best way to go because god forbid i don't want you going out there and spending you know any money forming an llc if you don't have any money coming in yet and that's a big question that people ask me about when i get on calls with people is how to when to form that llc should they do it and i've talked to a number of people who are just not at that point in their business yet where they're ready to start an llc and and that's fine and and not everyone is at that point but what we want to talk about today is if you've just formed that llc and you're wondering okay now what do i need to do this video is going to be for you all right so there's a number of things that you need to do when you are starting out with a brand new business with a brand new llc probably the first thing you need to do is make sure that you have an operating agreement drafted and that's something that that you can do for yourself you can find something online for free we offer an operating agreement you can check it out here or if you use my services to sign up for your own llc or if you did use my services to sign up for your own llc then you'll get an operating agreement through that service as well but having an operating agreement in place is vital to making sure that if anything would ever happen with your business if you were to get sued and i've talked to a lot of people who are in very high risk businesses where it's very possible that they could get sued in their business and you need to have a good operating agreement because that is going to show that you're following the proper procedures the following the proper legalities to make sure that your business can be protected so that that plaintiff's attorney that's trying to sue you can't come in and say judge you know what they don't even have an operating agreement so clearly this is just a big you know this is just them and they formed an llc they formed some articles of incorporation or excuse me articles of organization that's what they're called for llcs and they form that and they really haven't done anything they're not operating as an llc so disregard the llc and let's get at those personal assets shall we anyway an operating agreement is going to help protect you from that so you definitely want to make sure you get an operating agreement in place number two and again this is something we do for you if you sign up through our service but you need to apply for your ein to apply for an ein you need a tax id number or social security number all in existence right now and there are services that will obtain an ein number for you if you're a foreign or if you're from out of the country and you do not have a social security number there's ways to go about that it takes a little bit more time that's not something we offer right now but i've thought about it in the future and but you need to get your ein number for your business this is vitally important because you need it before you can go to step number three and step number three is you need to go and open up a bank account for the llc so maybe you've been operating as a sole proprietorship up until now and you're switching to an llc and so you need to make sure you transfer all the funds and all the money from the bank accounts you've been using for your sole proprietorship which hopefully is segregated against your personal bank account that's very important to maintain that distinction between the two hopefully you've done that and but you transfer all the funds from your personal business account into the account for the llc but to do that you need the social security number which i just talked about so open another bank account that's very important and you might want to open more than one check out my video on profit first for entrepreneurs and you might want to open two or three or four in my case i've if i had to count on one i probably got like six or seven once i'm not sure i i've got a lot because they all have a purpose right so do that number fourth thing you need to do is you need to apply or reapply if you've already got them as a sole proprietorship for your personal business license and permits now in some states in some municipalities you're going to apply for those on a personal level anyway like for me for instance i've talked about this before as an attorney i have to get what's called a privileged license in north carolina well specifically in in wake county or or cary north carolina where i practice as an attorney we need to have a privileged license and that's something that i apply for it's for me personally as a lawyer so if i were to leave my firm and go join another firm then i would take that privileged license with me to the new firm it has nothing to do with my llc so but in other cases you need to have an actual license for the llc so make sure you apply for the proper things as again as part of the business formation package that we offer we have an upgrade that you can get which will basically we will do a search in your local area for all the different business licenses and permits you need and prepare a report for you so you can go and apply for all those and make sure you've got everything you need for your business all right number five you need to make sure that you've got your contracts in place for your vendors and your clients or whoever you work with and so if you had contracts in place previously for them with you personally you need to just that's pretty simple you just change them all and substitute for your name the llc name and then making sure that when you sign those contracts you sign it the proper way you want to sign it as the llc by your name as member of the of of the or owner of the llc something like that so that you make sure that every contract you enter into with either clients or vendors or service providers whatever that it's between that entity or person and your llc as opposed to you personally now you may need to go back with old clients and all vendors and say hey i just formed an llc we need to redo our
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- Herb Pilger
About the author
I've studied fire safety (structural fire protection) at South Dakota School of Mines and Technology in Rapid City and I am an expert in vocational education. I usually feel crappy. My previous job was motion picture director I held this position for 17 years, I love talking about do it yourself and walking. Huge fan of Sandra Bullock I practice jai alai and collect steiff teddy bears.
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