NYCPHP Meetup

[Kristina Anderson]

> 
> Hey guys, I hope this isn't too off-topic, as I'm sure there's a few 
people
> here who are in the self-employment arena that can shed some advice.
> 
> As a prefix, I'm going to assume no one is a lawyer and such won't 
hold you
> accountable (unless you otherwise say I can).
> 
> I've been doing some side web development over the past 6 months with 
a
> designer and things are going great, and we seem to be getting 
clients at a
> great pace.  Obviously, the question is arising as to whether or not 
we
> should LLC our "group" and make things official and to prevent losing
> everything we own, and to look more professional.  However, I've heard
> conflicting things about what to do.
> 
> I was always under the impression that LLC was the way to go, but now 
I
> might not be so sure.  What are the rules to getting an LLC?  Do I 
need an
> address in the state I registered the LLC in for it to work?  Does 
the LLC
> need an official bank account in order for the checks to be cashed / 
money
> to be transferred?
>  How do the taxes work if there's 2 members of the LLC?
> 
> I'm very curious about how this all works!
> 
> Thanks in advance,
> Brian O'Connor
> -- 
> Brian O'Connor
> 
> 

Hi Brian -- 

As Tedd would say -- "Oh no, there's two of you".

Yes, you do need a company bank account (and to let the bank know who 
has permission to sign checks), and also need to file all the paperwork 
with the state of formation the same way as for an "Inc." Corporation, 
first.  To open the account you will possibly need a letter from the 
attorney who assisted you in creating the entity, as to its legal 
existence and proper formation.

Taxes vary according to the type of entity.  Also, after expenses, 
partners would be drawing income out of the entity and that would then 
be taxable as personal income.  Salaries to partners or employees is of 
course a business expense of the entity.

About the arcane legal differences between a Limited Partnership (LP), 
a Limited Liability Company (LLC), and a Corporation...I doubt anyone 
BUT a lawyer could answer that.  I was a paralegal for 5 years and I 
can't even recall this.   I know that it has more to do with the 
partners' obligations towards EACH OTHER .... all three shield you from 
personal liability if someone sues your entity, I believe.

Kristina