
Ask HN: What are the best resources to create an LLC/Incorporate? - traviswingo
I&#x27;m looking to form an LLC as a parent company for all of my side projects. What are some of the resources HNers use to do these things? Do you do it by yourself? Do you pay a service like LegalZoom?
======
tylery
I recently set up a LLC in California using Nolo's $99 online service (could
have figured it all out myself but didn't want to spend time):

\- First get a federal EIN number online (free, self-service) for the LLC. \-
When filing out the Nolo form, use your virtual mailing address as this will
be public record. I signed up for Virtual Post Mail at $10/month. \- When
filing out the Nolo form, answer "I already have a registered agent". If you
use Virtual Post mail, your subscription includes free registered agent
service. If you answer no and agree to use their service partner
Incorporate.com, it'll cost you $235/year.

+1 Create a business checking account so your personal vs. business financial
records are kept separate.

~~~
amorphid
Don't forget to pay the $800/year CA LLC fee.

------
taprun
I read a bunch of Nolo Press books [0], talked to accountants and did a whole
lot of research. Then I downloaded the forms and discovered it was
particularly easy to create an LLC in my home state.

The tricky things to remember are to get an EIN from the IRS (it's free) [1]
and to create a bank / credit union account for the business (free at my
credit union).

[0] [http://www.nolo.com/](http://www.nolo.com/)

[1] [https://www.irs.gov/businesses/small-businesses-self-
employe...](https://www.irs.gov/businesses/small-businesses-self-
employed/apply-for-an-employer-identification-number-ein-online)

------
kejaed
If anyone has any Canada-specific suggestions along these lines I'd be
interested to hear them.

~~~
Feld0
> obligatory "IANAL" note

There's no equivalent to LLC's in Canada so you'll need to create a
corporation up here. You can incorporate in the federal jurisdiction or a
provincial one; you'll want to read the relevant acts that you'd be
incorporating under to figure out the differences. BC corporations, for
example, require at least one director to be a BC resident; federal for-profit
corporations, on the other hand, require 25% of the board to be Canadian
citizens.

I created a federal corporation in Canada last year, mainly relying on the
info and "how-to" guides on Corporations Canada's website to educate myself:
[http://corporationscanada.ic.gc.ca/eic/site/cd-
dgc.nsf/eng/h...](http://corporationscanada.ic.gc.ca/eic/site/cd-
dgc.nsf/eng/home)

I also went through the Canada Business Corporations Act and Not-for-profit
Corporations Act a few times; they lay out the bureaucratic details you need
to be aware of.

The most awkward part was opening a US-based bank account afterward; BMO
Harris was one of very few US banks I came across that was willing to talk
shop with a Canadian company (I'd love to hear if anyone knows of any other
foreign company-friendly US banks).

If you name yourself as the only director and shareholder (or voting member,
in the case of a nonprofit), you still have to hold board and
shareholder/member meetings but they'll be very straightforward since you'll
be their only attendee. _Definitely_ consult with a lawyer if you're
contemplating a voting structure that extends beyond yourself or the
directors.

For creating a nonprofit in particular, you may be able to get pro-bono legal
advice through an organization like Access Probono
([http://accessprobono.ca](http://accessprobono.ca)). Corporations Canada also
offers a super-useful By-law Builder tool which gives you "sane defaults" for
the corporation's structure: [https://www.ic.gc.ca/eic/site/cd-
dgc.nsf/eng/h_cs04734.html](https://www.ic.gc.ca/eic/site/cd-
dgc.nsf/eng/h_cs04734.html)

~~~
ohstopitu
I've been reading up about this - why do companies setup provincial corps when
they could be setting up federal corps (as in, it costs $100 more and there
seem to be no downsides last I checked)?

Also, how do you manage taxes? (especially for revenue earned from other
countries for example).

~~~
Feld0
I see federal incorporation as a "sane default" but this is what I know that
favours provincial incorporation:

\- The bureaucratic details differ between the various provincial
jurisdictions and the federal one (like the one I mentioned with requirements
for the makeup of the board). This could make a particular province's
corporate rules a better fit for your business than the federal ones.

\- That provincial incorporation is cheaper can matter for local businesses
that have no intention of expanding nationally.

\- Some provinces may require corporations from other jurisdictions (other
provinces or the federal jurisdiction) to "register extraprovincially" to
operate there, at extra cost. This is avoided by incorporating locally.

\- If your business name is already taken by a provincial corporation in
another province, you may have an easier time creating a provincial
corporation by the same name than a federal one.

 __*

> obligatory "I'm not an accountant or tax expert" note

Taxes... I'm still figuring those out but CRA allows corporations to file in
USD [1]. To the best of my knowledge, a Canadian corporation that only has
Canada-resident employees and shareholders, and doesn't own property or
servers in other countries, only has to deal with Canadian taxes. Expect to
fill out a few W-8BEN-E forms to assert this. Depending on what your company
does, you may have to charge your Canadian users sales tax.

[1] [http://www.cra-
arc.gc.ca/tx/bsnss/tpcs/crprtns/fnctcrncy/men...](http://www.cra-
arc.gc.ca/tx/bsnss/tpcs/crprtns/fnctcrncy/menu-eng.html)

------
rrmm
In my state you just need to file simple articles of incorporation with the
Sec. of State and then keep up an annual fee. (If there are multiple people
involved, you probably want to get them looked over by a lawyer in case
disputes arise). The fees can vary significantly depending on the state you
file in (NY and CA have especially high fees, since so many companies must
incorporate there).

Other than that you usually need a local address (which can be yours if you
incorporate in the state you live). A bank account is useful to show a
separation between business assets and personal assets should you ever need
the 'limited-liability' part in court.

The major thing is that you pick a structure that does what you want (LLC
versus C or S Corp, etc), and that you understand the tax implications. The
IRS and other folks have circulars on that as well as employer tax guides,
etc.

The SoS of the state you want to file in will probably have more information
on the requirements.

------
jaypaulynice
Clerky [https://www.clerky.com](https://www.clerky.com) seems to be pretty
good and straight forward.

~~~
adrianmacneil
Clerky is great for creating a Delaware C Corp (if you intend to raise funding
in the near future), but I wouldn't suggest this for a small side project,
because a C Corp plus related paperwork is a lot more expensive than an LLC in
your home state.

~~~
traviswingo
Yeah exactly, thanks for pointing this out. I'm specifically focused on LLCs
because they are single-man operated side projects with passive income. I
maintain each one only a couple of days per month, at this point.

That being said, Clerky is an excellent choice for those looking to form a C
Corp in Delaware and focus on their startup full-time.

------
EduardoBautista
I used LawTrades[0] to find someone to do it for me. This included the post
incorporation stuff such as the company bylaws, stock purchase agreements, and
other stuff.

[0] [https://www.lawtrades.com](https://www.lawtrades.com)

------
hartator
Go cheapest way: file directly local LLC + an account at a credit union.

------
JBerlinsky
You probably want a lawyer or accountant to walk you through the process if
you're doing any significant volume. Don't use LegalZoom -- they aren't
technically providing legal counsel; they're providing "guidance," which won't
help you at all if someone comes after you (they're not liable for poor
counseling, etc.)

It's worth asking your accountant/counsel if you should consider setting up a
LLC that files taxes as a corporation. You probably only want to do this if
you are able to pay yourself a consistent, set payroll (I'm not a lawyer or
accountant, but I can speak from experience that this is one of the cases
where filing in this manner is not helpful, and will actually be detrimental).

While it's easy to create an LLC, it's very easy to create one that can be
broken through if someone wants to come after you. Pony up the $200 or so to
talk to a proper lawyer with experience setting up corporate entities, even if
you only have them tell you what to do on your own.

------
Posibyte
Disclaimer: I work for this company, however my comments and opinions are my
own.

I used Launch by Legalshield[0]. It's like the LegalZoom option, but they do
provide legal counsel. After you signup, the member lawyer of your region
calls you to finalize the documents and ensure everything's sorted. I paid
around $460 overall for the formation, agent, and all the documents neatly
organized in a binder with a really nice rubber logo stamper. Every step has
some information to the right to help explain the process, and if you get it
wrong, your member lawyer should catch it pretty easily.

Again, I work for them, but it's both not my project in the company, I don't
receive anything special for saying good things about it, and I really did
like the flow. So I might be biased, but I do highly recommend it.

[0]: [http://launch.legalshield.com/](http://launch.legalshield.com/)

------
akulbe
You should get Patrick (patio11) to weigh in. I think he's doing work in this
very space, for Stripe.

~~~
patio11
Happy to do so.

Longer thoughts here:
[https://stripe.com/atlas/guide#incorporation](https://stripe.com/atlas/guide#incorporation)

Short thoughts: in my official capacity I have to tell you that this is a
legal question and you should talk to your qualified professional advisors,
but unofficially, let me observe that you can form a sole member LLC in Nevada
or Wyoming approximately as easy as buying a book from Amazon. You don't need
to pay any expediter to do this; both of them have web apps that will walk you
through it.

If you want to incorporate a Delaware C corp, perhaps because you want to
raise investment, you can use Atlas. If anyone on HN needs an invite drop me
an email (this username @stripe.com would work) and hum a few bars as to your
situation; I'd be happy to help.

~~~
Terretta
Second this, though also not a lawyer advice...

Wyoming LLC.

Find a local agent, best bet use BizFilings to do papers if you hit snags,
they provide legal help to resolve. Smooth, just use wyoming's site.

You may want BizFilings to maintain recurring filings and local agent address
for you, or you can do recurring WY filing online and get cheap local agent.

Nice reasons to use Wyoming, just google. Think carefully about name and
address steps, you don't have to be popping up in every public DB.

Citi let me do a biz acct with just the above.

Then, do yourself a favor and get insured. I like Hiscox, via
[http://www.techinsurance.com](http://www.techinsurance.com).

------
ezekg
I've been looking at Stripe Atlas. For $500 (early access) they do all the
paperwork for you, but that's for a C-Corp. I'd also be interesting in
resources for other types of businesses, as I'm not sure which direction I
want to go in.

~~~
traviswingo
Yeah, Atlas is probably excellent for a startup filing a C-Corp in Delaware -
I just want an LLC since I have passive side project revenue and want to
parent all of them and funnel it all down into a single structure for
simplicity.

------
reboog711
Find a local lawyer.

Beyond that; look for specific information in your state. My state,
Connecticut, has a government web site that gives you step by step
instructions on setting up a company in the state; including what paperwork to
file and how to get taxID Numbers...

------
sparkling
Just wanted to say that all you US-based people are very lucky having all
these "starerpacks" companies (Atlas etc.) that handle all the messy parts and
paperwork for you.

Incorporating a limited-liability business in Germany is hell.

~~~
traviswingo
Sounds like an excellent opportunity for a legal startup.

------
wasd
You should consider an S Corp instead of an LLC. In California, you have to
pay an $800 franchise fee every year. It's significantly cheaper for an S Corp
and any revenue can be passed to your personal income tax.

~~~
brianwawok
This is very weird that LLC is so expensive in Cali, the land of statups. In
good ole Indiana, it is ~$93 to form an LLC and much less to maintain it.
Illinois was not that much more.

~~~
yellowapple
A lot of startups incorporate in Delaware instead of California.

~~~
brianwawok
If you live in Cali, doesn't that mean you also need to incorp in cali as a
foreign entity? I don't think its either home state OR Delaware.. its home
stand AND Delaware. And then yes, you get some Delaware legal things on your
side, but you are paying more.

~~~
dragonwriter
If you (as a corporation/LLC) do business in a state but are incorporated
elsewhere, you generally need to register as a foreign corporation in the
state you are doing business in. This often involves franchise fees similar to
opening a corporation/LLC in the state. But you only, strictly speaking,
incorporate in one place (unless you want a subsidiary incorporated elsewhere
for some reason.)

------
codegeek
Which country/state are you in ? If in the United States, I recommend finding
a good local accountant/CPA who can help. Usually, for any projects that
hopefully bring in revenues, you will need a good accountant to help with
taxes etc on a recurring basis. Better to find a good one upfront and then
work with them.

The problem with using generic services is that they may work fine in the
beginning but you may end up contacting an accountant anyway for best advice
on tax and planning. Yes, even for side projects that bring in some money.

~~~
traviswingo
Thanks! I usually go to TurboTax for accounting needs on a personal and side
project basis, since I'm fairly literate in tax processes and personal/side
project income isn't very complicated. Any personal experience on a local
accountant being better for you than a service like TurboTax?

~~~
vmarsy
Are your side projects generating money from app stores or selling directly to
your users? If selling direct, how do people handle the EU VAT stuff with a US
based company? (assuming sales to the EU countries)

------
samtho
I had the same problem and just did the paperwork myself.

I am in California so this information will only apply to people there.
Obligatory, I am not a lawyer.

Pre steps:

\- pick a name that is available:
[https://businesssearch.sos.ca.gov/](https://businesssearch.sos.ca.gov/)

\- Register the domain name you are going to use

\- Get a mailbox (like one at the UPS store, NOT a PO Box!) to use as your
business address so you will not have to use your home address if it bothers
you.

Now, for the real stuff -

1) Get a registered agent (even if you want to do it yourself, I recommend
getting one anyway). I used freeregisteredagent.com for 1 year free. Required
before you file the next step.

2) File an LLC-1
([http://bpd.cdn.sos.ca.gov/llc/forms/llc-1.pdf](http://bpd.cdn.sos.ca.gov/llc/forms/llc-1.pdf))
articles of organization. It requires a $70 filing fee, send off the form and
$70 money order.

3) Grab an EIN from the IRS: [https://www.irs.gov/businesses/small-businesses-
self-employe...](https://www.irs.gov/businesses/small-businesses-self-
employed/apply-for-an-employer-identification-number-ein-online)

4) Wait for the Secretary of State of send a copy of the file articles of
organization (form LLC-1). Now, file a Statement of Information, form LLC-12:
[http://bpd.cdn.sos.ca.gov/llc/forms/llc-12.pdf](http://bpd.cdn.sos.ca.gov/llc/forms/llc-12.pdf)
This is due within 90 days of the file date (on the filed LLC-1 form) All the
information here will become public information. Send that in to the SoS with
a $20 money-order and wait.

5) Use your filed articles of organization, the EIN you got in step 3, and a
state issued personal ID to get a bank account. US Bank and CapitalOne Spark
have free checking accounts for business, you can also try a credit union as
local ones have them for free.

6) Look for any local licenses you need, some cities require business
licenses, some require a "Business Operation Tax" (BOT) certificate - check
your city or county website(s). CalGold is useful:
[http://www.calgold.ca.gov/](http://www.calgold.ca.gov/)

7) Conduct business, keep records, etc

Recurring items:

\- An $800 minimum tax is due every year to the state of California.

\- You must file a new LLC-12 (if the information has changed) or an LLC-12NC
(if nothing about your LLC has changed) biannually (every two years).

See all forms here: [http://www.sos.ca.gov/business-programs/business-
entities/fo...](http://www.sos.ca.gov/business-programs/business-
entities/forms/#llc)

~~~
traviswingo
Thanks, this is exactly what I was looking for.

~~~
samtho
Glad it was of help :) Good luck to you.

Because I am impatient, I found this page to further fuel my silent rage
against the time it take for the state to process anything:
[http://www.sos.ca.gov/business-programs/business-
entities/pr...](http://www.sos.ca.gov/business-programs/business-
entities/processing-times)

I got my copy of LLC-1 returned to me 8 business days after they stated they
had processed it. Your LLC will show up in the business search the next day
after they processed yours.

------
amorphid
It's worth asking if you really need an LLC/Corp. Find a good tax person, and
see what they recommend. To find a good tax person, ask a few business people
who they use and recommend.

I formed an LLC a couple times, and both times I probably shouldn't have
bothered until the business could pay for the fees, and an official entity
offered me something a sole proprietorship couldn't.

------
nemmons
I work for a company that specializes in incorporation and compliance
services. We have a free information center that contains a lot of information
and guides that people may find helpful:
[https://www.harborcompliance.com/information](https://www.harborcompliance.com/information)

------
ianaphysicist
A qualified legal professional, a qualified accounting professional, and SCORE
(Service Council of Retired Executives).

------
giancarlostoro
Depends on your state. I live in Florida and everyone I know personally who
lives here and has started a company use sunbiz ( which is state specific )
maybe your state has it's own specific website? Otherwise there are multiple
options available.

------
Shane325
I used [https://www.vcorpservices.com/](https://www.vcorpservices.com/) to
form an S Corp and found them to be very good.

------
digitaltrees
Check out valcu.co (founded by a former Gunderson Dettmer attorney). You can
set up a venture capital ready C Corp for $19. It also has amazing document
automation tools.

~~~
brianwawok
Great, then he gets to pay double tax on all of his side project income - and
deal with the fun of things like having a board?

If you aren't PLANNING FOR SURE to get investment.. C corp is a pretty awful
thing to voluntarily subject yourself to.

~~~
fencepost
IANAL and don't have a C Corp, but doesn't that depend a lot on how you're
being paid?

I know "double taxation" is the bogeyman and is undoubtedly an issue in some
cases, but for truly small setups of expect taxes to either be passed through
S-Corp style or for larger businesses to be low because a lot of income may be
offset by expenses (e.g. paying a salary or wage for time spent).

------
omarforgotpwd
LegalZoom is a fine way to get started. It's not that expensive and they will
do it correctly. Best to not waste too much time on it and focus on the
business.

------
nunez
I went to a local accountant since they "know all the rules." Got incorporated
as a NY C-Corp for less than $1000

------
crispytx
Clerky is who YC uses to form c corporations.

------
steveax
Just you? Partners? If the former, a single member LLC is very simple to set
up in many states.

~~~
traviswingo
Just me for side projects that generate a passive revenue. From what I can
tell, the process seems fairly straight forward, but I ask because there are
always caveats that people with experience learn from that I might be able to
avoid.

~~~
shawn-butler
You might investigate a "Series LLC" if you want separation of your multiple
independent projects.

Series LLC is not available in all states and is fairly new but it allows for
a master or an umbrella LLC and other LLCs which are separated from each other
for liability purposes.

Each LLC has assets separate from the others, while the master LLC controls
all the LLCs in the series. Each unit has its own owners (members) and is
liable only for its own debts and obligations. A series LLC can be thought of
as a corporation with several subsidiaries.

~~~
digitaltrees
You can accomplish the same thing by creating a subsidiary LLC with its sole
member as the Parent LLC. As a wholly owned subsidiary, it is a disregarded
entity for tax purposes.

------
davidkellis
What's the consensus about doing this in Texas? Anyone been through it that
can advise?

------
elastic_church
Using the internet is harder than setting up a LLC.

Lawyers for this kind of thing cater to people that would also find it hard to
use the internet.

~~~
traviswingo
Yeah I've gathered it's probably pretty straight forward. I only ask because
I've never set up an LLC before (been involved with many C corp setups), and I
can guarantee I'll miss something that someone here could point out to me from
their own experience.

