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hey good morning everybody it's Friday FAQ time and today's question is should I have an LLC for my mobile notary and loan signing business my name is Bill Sorrell Khan the founder of notary coach comm and the sign-in Thrive notary training course in community and before we get started first let me say that I have to give you a disclaimer here I am NOT an attorney or a tax advisor so it's always recommended that you seek professional advice for your situation there's actually not a blanket law or a policy that works for everyone in every situation so I'm going to give you a little bit of guidelines here kind of what I did with a lot of the majority of notaries do whenever they get started but please know that you still it's highly recommended that you get the professional advice that you need okay so the question comes in from multiple people every single week via email but you can see the comments and the YouTube videos I get facebook Messenger messages all the time do I need to form an LLC or other legal entity before I get started as a mobile notary and MOU signing agent so the short answer is no not usually and there's a couple of reasons for this first to borrow an adage from my friend Chandler bolt until you sell your services to someone you don't even have a business so before you start spending time and resources like money on formulating a legal entity start earning some revenue second there's a lot of misconception about what about why we wouldn't even want to form a legal entity like an LLC or a corporation we think that that sometimes somehow this is going to validate us and legitimize our business and suddenly our customers are going to come flocking to our doors and that's just not how it works our customers don't actually care how we form our business entities in the background because the LLC or otherwise known as a limited liability company these corporations they're designed for two main purposes and client attraction and marketing is not one of them the first reason that you would consider a formal business entity like an LLC or a corporation is that they can help separate and protect your personal assets against any actions that somebody takes against you in business but still this has some major loopholes and some of the LLC's can even be pierced especially if you're a single member LLC so this may not even give you or afford you all of those protections that you think you're getting by setting one up that's why it's so important that you get the legal advice from an attorney that knows your situation and your laws in your state so you can get the best situation for you now the second reason to consider a formal business entity is tax efficiency if you structure these things correctly and under the right circumstances you can implement some cool strategies that will actually help in the long run they may be short term for your tax efficiency in your business especially when it comes to self-employment taxes now even with these two great considerations for using formal business entities 90% of us will not need this to get started we're just not in a situation where it would justify the expense in the time that it takes to set up on these organizations most of us can just begin operations as a mobile notary and a loan signing agent right away acting as a sole proprietorship now keep in mind that some states counties cities they may have some business licensing requirements too so you just need to do your due diligence and look up that so once your income crosses a certain threshold and it might make sense to formalize your business entity that income threshold is going to vary per person per state per situation but just in your mind kind of set it somewhere around the six-figure mark you start making around 100 grand a year you might be looking for some other options for Satan for tax efficiency or protecting some of your assets so if you're making between six and ten thousand dollars a month in this business as a mobile notary loan signing agent you can likely afford them the professional advice that you need to make the best decision about what's next for you when it comes to business entities now one of the other things that you really should consider everybody should consider is one of these prepaid legal memberships as well those services exist it's almost like having legal insurance so you have quality high quality legal advice when you need it at a fraction of the cost so you can just call in and get the advice that you need so I hope that clears up some of the confusion about how and when it makes sense for formalizing with a legal entity if you have any questions about this though or any other aspect of your business I love talking business so feel free to reach out to me I think the best way for that to go is just schedule a free mentor call with me you can do that on my website at www.911.gov enjoy your Friday enjoy your weekend and I'll talk to you soon I'm sure
Thanks for your comment Sharita Cilenti, have a nice day.
- Deeanna Adan, Staff Member
hey guys all right so in this video i want to talk to you about llc's okay and that's one that i usually don't get too involved with but i'm going to make this video so you guys have like just some information on whether to form an llc or not department llc we're going to put the pros and the cons in this video and then i'm also going to kind of give you some easy steps to get started in forming your llc okay let's get into it okay so most people they think of a business and they say okay i have to form it officially with the state the reality is anything that you do to make money is kind of like a business um so let's say you make cupcakes and you sell them to your local community right but you only do it on the side it's like a little thing you do on the weekends that's still a business technically you should be reporting that income on your taxes what you would do is file like a schedule c there's other ways you can like report that income as well but it's a business and it's considered a sole props and that's basically when you're the individual and the individual is technically the business okay that's one of my least favorite models of forming a business i've done it i've done it for a while i used to do it um and the only reason why i don't like it well it's a lot of reasons why i don't like it but mainly the tax benefits to having an llc is so much more effective more cost effective and then also the liability is better when you actually form a actual company like a llc or a limited partnership or whatever the case is but when you first get started as a notary you don't have to jump right out of the gate in llc a lot of people do that and the reason why i say you don't have to i didn't do it when i first got started i just found the schedule c as a sole prop right and um you don't have to i always say you know give it a give it a shot see if you like it you know put your feet in the water do some notar you know some notary work and see if it's what you want filing a llc costs money okay not only that depends on your state it could be a little you know process to get it done and so this is something that you don't really want to do because you're not sure or you just kind of want to put your feet in a little bit i wouldn't llc it i would kind of look at like a hobby like a side hustle and i said i just do you know a little here and there and see if i like it now when you're ready to llc you absolutely can but it does cost money you have to file with your state and then on top of that you have to maintain it annually so there are annual fees that you have to pay to keep that llc active right and let's say you don't pay it there are penalties that are issued for not paying and staying on top of the llc and so let's say you started llc's that would be a notary you know you get your commission and you do a few here and there but you kind of let it go and you just like okay i'm into something else now but you forget that you formed an llc you actually have to close that llc down or you do get those penalties depending on your state typically there's penalties to not keeping it active and filing that annual report every year saying this business is still active and you're to the registered agent keeping that stuff up to date so if you're not sure if you want to go full-fledged as a business yet then just do it as a sole prop which basically like you are the business now that being said if you are the business there is some liability there that i don't like so um now what are the odds but still there are sex that's like not having car insurance let's say i've never gotten a car accident ever in life so why do i need car insurance until you take it off and then you hit a tree or like you know you ding someone's car right it's one of those things where it's like well who would really sue a notary it happens it doesn't happen that often but it happens right or you know you just want to make sure that you're not putting your livelihood at risk because when you're a sole prop you know everything that you have in your name is up for grabs your house your car your assets anything like that if you get sued hence the limited liability company it limits your liability i love llc's they're my favorite okay like i said when you first get started if you want a llc cool if you like you know i'm going hard with this i already know what i want to do i'm an llc it awesome go for it if you're kind of like i'm not sure if i really want to do this i'm like on the fence about it i'm trying this and like three other things so i don't really know there's nothing wrong with bringing it as a sole prop okay now when you get ready to form the llc there are benefits to it as i said there's certain tax benefits which i love if you have an llc you need to be tracking every single business expense that you have oh my goodness i love it okay uh but you get definitely get tax benefits for that and you open yourself up to a lot more business funding and business grants now you can still get some funding and grants as a sole prop but it's like the the flood gates open when you're actually a formed business like an llc or llp or s corp things like that and so it opens you up to more and business credit love business credit i have a course on business credit at notarycenter.com go check it out if you want to learn how to build business credit and spend the businesses money and stop spending your money we also talk about why it's important to reinvest the money that you make but we'll get into that in business credit and tax financial management but bringing it back to llc so when you're ready to llc you apply with your state your state corporate commission will get your llc set up for you you pay fees big question people always ask is what about the registered agent let's talk about it so the registered agent is basically the person responsible for collecting the notices and information for the company so like for example let's say your annual registration fee that will get sent to your like the notice from your state will get set to your registered agent let's say you get sued right that information will get that your company gets sued that information will get sent to your registered agent so anything that's coming from like being sued like process serving they're going to service a registered agent and any notice is from your state so any updates they have for llc's or for businesses any fees any changes that will go to your registered agent and then if anyone is looking for who's responsible for the company that information let's say they want to send something to the registered agent of the company that's where it would go to that registered agent okay now a lot of people say well you know can i be my own registered agent you can but let's talk it out okay so you can be your own registered agent there also are companies out there that will be your registered agent for you we'll talk about both and the benefits of doing it either way so um me personally i'm my own registered agent right now the perks the perks the benefits of being your own registered agent is you
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- Deeanna Adan
About the author
I've studied legal anthropology at New England Law | Boston in Boston and I am an expert in polish history. I usually feel devious. My previous job was chief financial officer I held this position for 28 years, I love talking about slot car racing and balafon. Huge fan of Alice Cooper I practice bocce ball and collect disneyana.
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