Searching trade names and trade marks

Information in this article has been pulled from a brochure printed by the Phoenix Public Library. The full document can be found here.

A trade name is a name used to identify organizations, and generally their products and services as well. A trademark is any word, phrase, design, slogan, or symbol, which distinguishes certain products and services from those offered by competitors, such as "Jell-O" or "Kleenex". Although trademarks registered with the state and/or federal governments enjoy the highest degree of protection, even unregistered or "common law" trademarks may be somewhat protected.

Following the steps below may help you find potentially conflicting trade names and trademarks. Each step offers a higher degree of protection.

1. Check your proposed name against the list of directories on the other side of this sheet. This list has been designed to help you check trade names and trademarks, with
   particular emphasis on Arizona businesses. This check will take about 30 minutes.
2. Check your proposed name on the Arizona Secretary of State’s database at
   http://www.azsos.gov/scripts/TNT_Search_engine.dll
3. Check your proposed name on the Arizona Corporation Commission’s database of corporate information at
   http://starpas.azcc.gov/scripts/cgiip.exe/WService=wsbroker1/main.p.
4. Additionally, Construction companies should check name availability with the Registrar of Contractors by calling 602/542-1525.
5. Check your proposed name on the U.S. Patent & Trademark office’s Trademark Database at http://www.uspto.gov/main/trademarks.htm. Read their explanations and disclaimers
6. If you want more protection or advice or if you would like someone to handle the entire process for you, you may wish to use the services of a trademark attorney. The library has directories to help identify attorneys who offer these services.

Journey of a non-profit - names/trademarks

I'm kind of stuck before I get started. Using resources on Google (God bless the Internet...how did anyone ever get anything done 10 years ago??) I find out that I now need to navigate through choosing a name. Sigh!

At this juncture I must admit that we reserved a name with the ACC already. There is a fee for this. I think paying the fee may have been a tish unwarranted but all of this happened before I volunteered.

Anyway, we have a name. Kids Klub Foundation. We will operate For the Benefit of Phoenix Children's' Hospital. But registering a name with the ACC isn't all that there is to it. After doing some research on Google, I actually go to the US Patent and Trademark website and use their program, TESS, to look for trademark infringements. Good news. There are 13 records for Kids Klub, or variations thereof, and they're all marked DEAD. Yeah!

This seems kind of remarkable to me...or providential. First our name is available with the ACC and there is nothing else similar to it registered in the State (how did that happen??) Now it looks like the Federal trade mark office is clear too.

NOLO suggests the following other places to check: Google, phone directories, industry resources, State trademark registries and County fictitious name databases.

The good news is that all of these resources should be easy for me to check right from my laptop. Besides, once you Google something, isn't everything else pretty irrelevant?

Gulp. I Google "kids klub+phoenix" and "kids klub+arizona" and find three potential conflicts. One is a family owned daycare in Coolidge. The good news is that the legal test surrounding name conflicts appears to be consumer confusion. I don't think that consumers who want to donate to our organization are going to confuse us with a family owned daycare.

On the other hand, we have a boys and girls club for inner city kids that meets weekly from September to June. Hmmm. This may be a problem. Then there is the Kids Klub attached to LA Fitness. Are "they" going to care? Big corporation in several states. They might. Last, but certainly not least, is a program associated with the Laveen school district.

Finally, without leaving the comfort of my couch, I can check http://www.dexonline.com/ for telephone listings and http://www.godaddy.com/ for a domain name.

Dex tells me that only the aforementioned day care is listed in the phone book. I check with http://www.godaddy.com/ and am momentarily bummed to see that the name has been taken only to find out that it is by us. WE ARE AWESOME. Thank you, Lisa, for thinking of this. Whew!

I think we're pretty much ready to go. More reading on the subject tonight and I feel comfortable that 1) I'll have a good report for my fellow Board members on Wednesday and 2) we'll be filed in time for our kick-off dinner in August.

Journey of a non-profit - Oh, the paperwork!

I am given $400 in cash. By my estimation, that should be enough for me to file the non-profit papers with the ACC and then publish our new corporation. Our goal is to have this done in time for our kick-off dinner at the end of August. If we are legal with the State, then we figure we can collect donations and have a bit of credibility under us. We are not just going to be some schmoes passing around a coffee can asking for money. Our journey will be underway.

Except for one thing. When you do anything with any regularity, it becomes old hat. I file LLCs and PLLCs with the ACC frequently. I do not fill out non-profit paperwork frequently. Honestly I'm not sure how to proceed.

I call an attorney thinking I will throw myself on his mercy. He doesn't bite. Why would he? He doesn't know me from Adam. Of course, we're hoping to get this project off the ground and raise money at the kick-off dinner to use his services but there's the whole cart before the horse thing. We need to be legal in order to raise money to pay for legal services. Sigh!

So I come up with Plan B. I'm a GREAT copycat. I google non-profits and come up with samples of paperwork that others have filed. This gives me an acceptable template to work from. I have a safety net in that Matt (my LLC Partner Extraordinaire) has Pre-Paid Legal. I throw myself on his mercy and he agrees that if I fill out the paperwork he will have the pre-paid legal folks weigh in before I spend $300 or so getting the non-profit set up.

In an abundance of caution I head to the library and take out NOLO's book on starting a non-profit.

I have a plan and I'm feeling good!

Owner K Retirement Plans - cool benefit of having an LLC

I discovered this really cool retirement plan that works for small business owners (this is one more reason not to be doing business as a sole proprietor). This type of plan allows for the possibility of transferring current retirement plans and then being able to legally borrow against them.

The Edward Jones Owner K® is an owner only 401(k) plan. It is a retirement plan for businesses with no employees other than owners and their spouses (including self-employed individuals, corporations and partnerships) who desire to increase or maximize pre-tax retirement contributions with flexibility.

The plan allows you to make tax-deductible contributions for retirement while earnings grow tax deferred. The allowable contribution is larger than with a SEP IRA.

For more information about the features of this plan, please contact local Edward Jones financial advisor Scott Nance at 480-720-7068.

Reliable LLC Filings does not dispense legal or tax advice. We do however think the Owner K program is pretty nifty. This retirement plan may not be suitable for all circumstances. Please do your own due diligence before making any financial decisions.

Separate LLCs for each investment property

Many people are aware that they can protect themselves and their assets by transferring their investment properties into an LLC. As a fellow real estate investor, the question I hear most frequently is, “should I transfer all my properties in the same LLC?”

Imagine that those little green plastic houses from Monopoly represent your investment properties. Imagine also if you took one of those houses and put it into a box. That is similar to what happens when you transfer the deed to a property into an LLC. If someone tries to sue you, they are suing the LLC and not you. If they win, they can only get what is in the box.

Now, what would happen if you put two green houses in the same box? If you get sued, both houses are at risk because they’re both inside the same box.

If your investment properties aren't in a box at all and a judgment that exceeds your insurance limits is levied against you ALL of your assets are in jeopardy. You would remain personally liable for the balance of the judgment thereby risking any remaining equity, your current savings and potentially your future income.

For maximum asset protection, its best to put each house in its own box – or – in its own LLC. This very basic overview does not cover every possible scenario; just like the name says, there is a limit to the liability protection that this entity gives you. You could still be held liable if you, say, decide to change your own hot water heater and it explodes. Still, why risk the equity potential in your investment properties when they can be adequately protected for a mere $279 per property? That’s pretty cheap insurance!

P.S. The whole strategy fails to work unless you actually transfer the properties in the LLC and provided you add your LLC as an insured on your homeowner's policy. Any title company can help you with the transfer and your insurance agent can handle the rest.

Source: Opt2Invest, LLC - personal notes from Summer 2006 presentation

Piercing the Corporate Veil: Are Your Personal Assets Really Safe?

Many entrepreneurs understand the benefits of small business incorporation, but they don't realize how easy it is to lose their "corporate status" if they get sued or end up in bankruptcy. This is dangerous because then the court can come after their personal assets (like their house, car, savings, etc)! Today, I will review a little bit of why incorporating is so important for small business owners, and then tell you five simple steps you can follow to protect your personal assets, even if your business gets sued or goes through bankruptcy.

Small business incorporation makes sense for a couple of reasons. [Insert note from Reliable LLC Filings - Arizona LLCs give the same benefits as incorporating without the disadvantages. Please see our article on LLC vs. Incorporating for more information.] First, it protects you from personal liability, and second, it offers you some great tax advantages. For today, we're going to just focus on the personal liability part. When you incorporate, your business becomes like another person. This other person has its own bank account, it can own things like property, and it can take risks. Even if that "other person" (your business) goes completely bankrupt or gets sued, you are safe (assuming you do everything correctly). This is important because many new businesses fail, but you as the entrepreneur don't want to fail. You want to pick yourself back up and start your next business which will be even more successful. Failure is a necessary way to learn, so we want it to be as painless as possible. Small business incorporation is the key to doing just that.

When everything works like it should, then yes, you personally are protected. But there are certain situations where your corporate status doesn't help you out, and every business owner should be aware of them! You see, setting up a company gives you so much protection from liability that unethical people in the past have tried to take advantage of it. They have gone through small business incorporation just to create "shell corporations", or businesses just for the purpose of liability protection, to help them get away with various crimes. Of course, the law had to be modified to weed out these people and make sure they were appropriately prosecuted. But in the process, the requirements for honest small business owners became tougher. Some extra steps are now required to make sure your corporate status stays intact.

By the way, whenever a court decides to waive the corporate protection and actually prosecute the owners behind the company personally, they call it "piercing the corporate veil". (Lawyers always like to come up with fancy names for things.) Following are the top five ways to protect you personal assets after going through small business incorporation. Make sure you do these correctly, and you can be sure that even if your business experiences a colossal failure, or gets sued out of existence, at least your personal assets are safe and you can start over.

1. Never Engage in Fraud or any Criminal Act - This sounds simple, but many small businesses owners unknowingly break the law. Never sell a product you know is defective or doesn't work, misrepresent something in your advertising, forge any signatures, or pull a bait and switch (offer a great deal to get people in the door only to tell them it is out of stock so you can sell a substitute.) Run your business honestly and with integrity every day, and it will pay off in the long run.
   


2. Never Misrepresent Your Corporate Officers or Members - Don't ever lie about who is involved in your company. When it comes time to ask for investors, or get people to support you, you may be tempted to exaggerate about who is actually working with you. If they haven't actually signed your operating agreement (an important step in small business incorporation), then they aren't your partner.
   


3. Make Sure Your Follow All Corporate Formalities - If you are going to claim you are a company, then you'd better act like a company. Small business incorporation requires plenty of little steps that can be easy to forget. That means you have to file all important documents and keep records of them (your operating agreement, articles of incorporation, and DBA for example). You also have to keep detailed financial records. You could pay a lawyer to put all these together for you, but this will cost you thousands of dollars. I recommend taking the time to learn these relatively simple steps yourself. There are some great resources out there.
   


4. Keep Your Business and Personal Assets Separate - The business has to have it's own bank account. The money in that bank account is not your money. It belongs to the business. In fact, if you decide one day come along and take some money out to buy yourself a Hawaiian vacation, that is called embezzlement (a crime)! Often, the first time through small business incorporation, new business owners (especially if they are the sole owner) don't understand this concept. The money in the company is not theirs. The company is like a separate person, and all assets must be treated as such.
   


5. Never Treat the Business' Assets as if They Were Your Own - Don't deposit your personal checks into the corporate account. Don't use company money to finance your personal life and hobbies. Don't lend the company car to your buddy for a weekend excursion. Don't set up a cot in the back of the office and start living there! Again, the you and the business and are two separate people. Treat them accordingly.

With these five basic steps, you can be sure your small business incorporation holds up in court in the event your business goes under. Many successful business people, from Donald Trump to John D. Rockefeller, went through periods of ups and downs in their life. Not every company they bet on was a success. But they managed to survive and lived to fight another day because they where smart enough to go through small business incorporation correctly. They followed the above five steps to make sure they wouldn't lose their corporate status in the event of a lawsuit. They made sure that their personal assets were safe, even if the company went bankrupt.

About the Author Brian Armstrong makes it easy to learn the secrets of today’s top business owners. To discover the "7 Essential Steps to Starting a Business" in his Free Online Course , visit this site now: Small Business Incorporation Source: http://www.articlestreet.com

Set Up an LLC Business For Double Liability Protection

Did you know that the limited liability company provides two types of liability protection? The corporation only provides one type. Learn about how you can protect yourself and your business when you set up an LLC.

Personal Liability Protection

The main reason business owners set up an LLC for their business is to protect themselves and their personal assets from being lost due to business obligations and lawsuits. The LLC protection laws basically state that an owner of a limited liability company is not personally liable for the debts, obligations and lawsuits of the business merely because he or she is an owner.

Without the use of a limited liability entity such as an LLC, the owners would be personally responsible for all such liabilities. Given the number of lawsuits filed today and that we have a litigious society with too many predatory litigation attorneys, this protection is necessary to reduce the risk of starting a new business.

This LLC protection is the same protection offered by a corporate structure but the great thing about the limited liability company is that when you set up an LLC, you are not required to meet the same formalities and number of requirements as a corporation in order to gain this protection. The limited liability company is easier to maintain.

Business Liability Protection

What many business owners do not know is that a limited liability company also provides what it known as reverse liability LLC protection which protects your business assets from your personal liabilities and obligations.

Under the LLC laws of most states, there is a provision called a Charging Order Provision. This provision basically states that a creditor or person who obtains a judgment against an owner personally, cannot foreclose on his or her LLC interest and take over control of the business.

This protection is not offered by corporations. Let me give you an example of the power of this business liability protection.

Let's say you were driving to the grocery store one day and were at fault in a horrible car accident. The case when to court and you were found liable for an amount greater than what is covered under your automobile policy.

If you were a shareholder in a corporation business you ran, the person you are liable to could file an action which would allow them to take over your shares of stock and take over your business. In most events, they may liquidate your business or sell it to someone who would pay value for it. The creditor is looking to extract money from these assets to pay for the judgment.

On the other hand, if you were an owner (called a member) of a limited liability company, and the creditor did the same thing with your LLC interests, the charging order provisions prevent the creditor from coming in and taking control over the business. You will still control and be able to manage the business.

What the creditor does get is merely the rights to be given any profits distributed to you from the limited liability company. Here is the great thing. As the manager, you can decide not to distribute any profits and to reinvest them in the business. In this case, the creditor gets nothing.

But, this reverse LLC protection gets even better. If the limited liability company business was profitable and the profits got reinvested, a creditor who forecloses on the LLC interest not only gets no cash, but then is stuck with the tax liability allocated to your LLC interests. Given this potential scenario, a creditor will almost never try to take over the ownership interests of a member. This results in your business and its assets being protected from personal creditors.

Please note that given a recent federal bankruptcy case, it is likely that this reverse protection is only available for multi-member LLC businesses. If you run a single member limited liability company, it is likely the federal laws will prevent you from benefiting from this reverse liability protection (at least until another case comes out to the contrary).

Summary

When you set up an LLC, you get two types of protection that you cannot get under other alternate business structures. Both of these LLC protections are not absolute but the go a long way in helping to protect you and your assets.

Article taken from http://www.TheLLCExpert.com
Reliable LLC Filings does not dispense legal advice. The LLC Expert does not currently offer LLC formation services in Arizona. Please consult your local legal professional for an opinion of liability protection in Arizona.

Creating Home Ownership for your Kids–Try Using an LLC

I stumbled on this article while I was surfing the net. I think this is a brilliant strategy and wanted to share. Of course, Reliable LLC Filings can help form the LLC and even provide a template for the Operating Agreement but we will send you to a professional for advice on whether this strategy will work in your circumstance.

* * *

When parents want to help their children buy a home, they are often stymied by the myriad gift and other tax considerations which make providing for their children a difficult task. Recently, with the assistance of Scott W. Hazard, a Senior Vice President at GuardHill Financial, and a financial planning associate, the authors of this article [original link cited at the end] were able to circumvent the obstacles and provide a “clear path” to generous parents for effecting real assistance to their children.

There follows a description of how this transaction was structured:

1. The generous parents form an Limited Liability Company (the “LLC”). The parents became the Managers of the LLC and are majority Members. The Operating Agreement for the LLC provided that the parents put substantially all of the cash required to close the purchase into the LLC. The children are also Members under the Operating Agreement but only to the extent of a few thousand dollars, which entitled them to a small share of the interest in the LLC.
2. The LLC entered into the Purchase and Sale Agreement for the purchase. The LLC also became the Mortgagor when the purchase closed. Disclosure of all aspects of the transaction was made to the Mortgage lender, and the only extra document the Lender required were the personal guarantees of all four Members of the LLC.
3. The transaction took place in 2008. Prior to the end of the year, each of the parents made gifts of $26,000 to the children. These gifts were made in the form of amending the OPerating Agrement to increase the percentage interest of the children LLC. The parents intend to make similar gifts in 2009 and thereafter, until the home is 100% owned by the children.
4. Because of the size of the gifts, no gift tax return was required of the parents and the parents were not forced to use up any of their lifetime transfer exclsuion. If the children are able to develop additional funds, they may make payments to the parents at any time to increase their percentage ownership. It is generally advisable for the parties to obtain an appraisal of the home from time to time to make an accurate measure of the value of the transfers.

Even in today’s sometimes difficult real estate market, parents want to assist their children to become homeowners. The LLC route described herein is one which has many advantages, and I would recommend that any parents who are inclined to assist their children in attaining home ownership consider it.

Article originally posted 4/13/09 . Reliable LLC Filings does not dispense legal or tax advice. Please consult with an Arizona professional before taking our word that this strategy will work in your circumstance.

Benefit having an LLC taxed as an S Corp

If you want to form a Limited Liability Company that will be taxed as an S Corporation, you'll want to know some basic information before you start a business. Many people choose to form their companies as an LLC but with the S Corporation taxation election. Why?

There is a tax advantage in most cases because having an entity taxed as an S corporation allows the owners to save on self-employment taxes (which are 15.3% up to $106,800 of earned income in 2009) on distributions of profits.

Because the owner of the LLC is self-employed, 15.3% of all earnings up to $106,800 in 2009 are subject to self-employment taxes. For instance, let's say that you earned $60,000 last year in your LLC. You would pay $9,180 in self-employment tax.

• $60,000 x 15.3% = $9,180

That money will go toward your Social Security and Medicaid payments. However, there is a way to earn a lucrative salary without taking a hit on all of your profits.

Let's say that you formed an LLC taxed as an S Corporation. You earn the same amount of money but pay yourself a salary of $40,000. You'll pay only $6,120 in self-employment tax. That's a tax savings of $3,060.

• $40,000 x 15.3% = $6,120

S Corporations can elect to pay the remaining $20,000 in earnings as a distribution from the company. As an LLC, you can also elect to split the profits in this manner, as long as you follow IRS guidelines. That's where the tax savings comes into play.

The IRS does not like an owner of an S corporation to limit distributions to those that are not subject to SE taxes. It is very important to take a reasonable salary when you have either an S corporation or an LLC taxed as an S corporation. A reasonable salary is the key to keeping the IRS happy.

If you want to form an LLC but want the tax advantages of an S Corporation, you'll have to get permission from the IRS by filing Form 2553. Timing is crucial, however. This form is due within 75 days of filing your new company. Miss that deadline, and you will not be able to take advantage of S Corporation tax savings.

Keep in mind that an LLC taxed as an S corporation may not be beneficial to everyone. Because you have three months to file for S Corporation tax status, make it a priority to seek professional assistance before making the final decision. For many small business owners, however, the ease of management that a Limited Liability Company offers combined with the lower taxes of an S Corporation make this decision an easy one to make.

About the Author
Written by by Scott Letourneau
http://www.nvinc.com/whybeasole.htm And Scott Letourneau Present Business Lines Of Credit And Form An LLC With Today's Topic: "How To Form a LLCTaxed as an S Corporation."

Operating Ageements

An Operating Agreement is a written agreement between the Members (owners) of an LLC. This internal document is an agreement set by the company members that contains provisions how the company will be managed and run.

Operating Agreements generally address:

• the members' percentage interests in the LLC
• the members' rights and responsibilities
• the members' voting powers
• how profits and losses will be allocated
• how the LLC will be managed
• rules for holding meetings and taking votes
• buyout, or buy-sell provisions which determine what happens when a member wants to sell his or her interest, dies, or becomes disabled

In the absence of an Operating Agreement, the LLC will be governed by and have to adhere to the default rules developed by the State. Operating Agreements are not published and therefore, not public record. Once established, they can be modified by the members following the terms set forth in the original agreement.

Arizona State law does not require an Operating Agreement. For LLCs with multiple members an Operating Agreement defines how the company operates. With multiple members comes multiple personalities and multiple chances for misunderstanding. All of which can be alleviated through a well-written Operating Agreement.

However, as a single owner LLC or PLLC you might do well to check with your tax professional to verify the benefit vs. lack thereof for your own particular circumstance. In single member LLCs, an Operating Agreement defines the structure that the member has chosen for the company. This can be helpful in court to prove that the LLC structure is separate from that of the individual owner. The Operating Agreement also provides documentation that the owner of the LLC is, indeed, separate from the entity itself.

Because the Operating Agreement becomes pertinent after the creation of the LLC/PLLC, you have time to investigate this while your LLC/PLLC is being formed.

How do you draft an operating agreement? Since an Operating Agreement is basically an agreement between all of the members, it can be as formal or as casual as the comfort level of those signing it. There are a number of resources online. Realtors who, by their profession, are comfortable reading contracts and drafting agreements might find an online template to be sufficient to get their Operating Agreement started. As document filers, Reliable LLC Filings does not get involved in drafting Operating Agreements.

Out of an abundance of caution, you can hire an attorney to either review an operating agreement you draft or to help you create a custom one for your situation. The choice is up to you.

Source: http://en.wikipedia.org/wiki/Operating_agreement

What's your management style?

Member vs. Manager

This is one of the trickiest questions we get. When you form your LLC or PLLC, you need to tell the Arizona Corporate Commission how that entity is going to be managed.

As with any company at least one person has to be in charge of managing the day to day business. Unless you appoint one or more members or non-members to manage your LLC, you and all the other members are automatically responsible for managing the business. This is called “member managed.”

Owners of an LLC (known as members) jointly manage the LLC although they can instead designate one or more managers to manage the LLC if they want to impose a separate level of management. This is called "manager-managed."

Although we were personally advised that being a member meant you wouldn't be held personally liable for the debts of the LLC, it turns out that this is not 100% true. According to a leading LLC attorney in Phoenix, choosing to be a member over a manager does not mean you have less liability if say, you run a red light and hurt someone in a car crash. Regardless of whether you are a manager or a member, you still may get sued and the LLC isn't going to protect you.

Manager-managed LLCs might be appropriate if you have passive investors who will feel more comfortable if the LLC appoints an active managing member (or perhaps several managing members) whose duties are explicitly defined.

In that same vein, as a single member LLC or PLLC you are, obviously, going to be the one managing the business and running "the company." Making management decisions inherently creates liability for you regardless of whether you are a member or manager.

For single owner LLCs and PLLCs, I lean towards member managed. According to NOLO's Quick LLC (Mancuso) 95% of small businesses choose member managed.

* Remember, we do not dispense legal or tax advise. You can find information on the subject of management styles from plenty of websites. Or, you could consult a legal professional for, well, legal advice.

Potential benefits of a PLLC

Let's start off by reminding readers that Reliable LLC Filings is a document filing company and does not dispense legal or tax advice. That said, Realtors are our life. We work with you on a daily basis, counsel you when we can and answer questions that come up. We share with you, here, information that you are bound to want to know.

Namely, why would I want a PLLC?

It is our understanding that the benefits can be huge.

1. There is the whole initial thing that you Realtors having going on. Why not add PLLC to your title and business card. Along with the other designations that Realtors collect, this can help you with credibility with your clients.
2. Again, not dispensing tax advice but it is our understanding that the tax benefits can be huge. To quote my client Bruce, "I got my PLLC because I thought I had to. Now I pay myself a salary from my PLLC. Any income over my salary gets taxed differently because I'm not taking the income under my social security number. This saves me big time."
3. I've read that the IRS prefers that small business owners (read Realtors here) operate under a legal business structure instead of a sole proprietor. One could argue that this would potentially cut the risk of an audit because all income and expenses would be running out of the same LLC.

In all fairness, we must point out that the limited liability inferred in the name "Professional Limited Liability Company" is not going to protect you against any professional errors you make that a client might sue you for. So, you're still going to need your E & O insurance.However, it may prevent a judgment from stretching into your personal assets and equity.

We have helped lots of agents create their PLLCs. We save you the time and hassle of driving downtown to do the filing, figuring out the publishing and navigating through transferring your license to the PLLC. Plus, we've met with the ADRE and know what specific language needs to be on the Articles of Organization so that your forms are filed right the first time!

Otherwise, we have helped lots of agents create their PLLCs. Armed with a PLLC and a good accountant, it's possible to get some huge tax savings as opposed to being paid as sole proprietor under your social security number.

Naming your PLLC

This is a tricky subject because the Arizona Department of Real Estate has very specific guidelines on how a PLLC can be named. Because you are, in effect, transferring your real estate license into a PLLC (mainly for tax advantages), the Department requires that the PLLC be in your name. That can be your full name or last name. Middle initials are optional but the ADRE really prefers that the name for your PLLC matches what is on your Arizona driver's license. Most importantly, your PLLC cannot be in a ficiticious name.

• A professional limited liability company cannot have a business or DBA name and the PC or PLC name must be comprised of the names of its licensed members (only). Refer to A.R.S. 32-2125 (B) and R4-28-303 (F).

Besides the specificity of naming the PLLC, there is other language that the ADRE requires on the Articles of Organization that get filed with the Arizona Corporation Commissioner. When you hire Reliable LLC Filings to help create your PLLC, we'll make sure that you are fully compliant with the ADRE guidelines.

What is a PLLC??

In Arizona, if you wish to be an LLC and are performing professional services that require licensing under state law you are required to form a PLLC. As a Arizona real estate agent, you are required to form a PLLC or Professional Limited Liability Company as opposed to a standard LLC. The statute (Title 29, Chapter 4 of the Arizona Revised Statutes) covers a broad range of industries including REALTORS.

As entities, the LLC and PLLC are virtually identical. All general rules and regulations governing an LLC apply to a PLLC. (A.R.S. 29-843). They share the same legal and ownership structure. For example, both are owned by a member or members, not shareholders. A PLLC is granted the same limited liability as an LLC or corporation for creditor claims. While the benefits of being licensed as a PLLC are many, there is no limited liability with respect to E & O claims arising our of your professional services.

You could use an internet based company to set up your PLLC but the The Arizona Department of Real Estate (ADRE) requires specific language to be used on the Articles of Organization. We have heard horror stories from agents who weren't advised right. Some created the wrong business structure and were declined by the ADRE. In one instance, the broker lost the opportunity for huge tax benefits during the time we were sorting out and "fixing" her entities.

We have met with the ADRE and are well versed on what verbiage is needed on the Articles of Organization to keep the ADRE happy. We know the difference between LLC, PLLC and PC. We know who qualifies and who doesn't. We are aware of who can have ficticious names and who can't.

Reliable LLC Filing Services will guide you through the process, take care of filing and publishing your documents in accordance with State law and provide you the necessary documents to transfer your real estate license into your PLLC. All this for $279.

What are you waiting for?

5 ways to give less to Uncle Sam

Diane Kennedy, author, with Dolf de Roos, of The Insider’s Guide to Real Estate Investing Loopholes (John Wiley & Sons Inc., 2005 revised), offers these tips on reducing your tax obligations.

1. Go corporate. By incorporating your business as a subchapter S corporation instead of operating as a sole proprietorship, you avoid self-employment tax and pay taxes on income at a far lower rate. It will cost you between $500 and $1,000 plus state filing fees to incorporate as an S corporation. Because you’ll have less earned income under this structure, your later Social Security benefits could be less, depending upon what you’ve paid into the system.
   
   [Note from Reliable LLC Filings: In Arizona, Realtors can organize a PLLC. The cost to use our service is a one time fee of $279. This includes state filing fees, publishing in accordance with state law and presentation of the necessary forms to file with the ADRE.]
   
   


2. Minimize your business income by classifying a portion of your depreciable real estate as personal property. Since personal property can be depreciated over five to 15 years, as opposed to 27.5 to 39 years for real estate, you will get higher deductions, thereby lowering your taxable income.
   
   


3. Deduct a chunk of your vacation costs by looking at real estate investments during your trip. The key is how many days you spend on your real estate investments during the trip. Every business day that you spend all your time looking at properties, you can deduct 100 percent of your travel and hotel rooms and 50 percent of meals. You don’t have to buy anything during a particular trip, but if the IRS questions your return, you’ll need to prove you’re a serious investor by showing you’ve made offers on property or have a track record of prior investments.
   
   


4. Open a Roth 401(k) in 2006. This form of retirement savings account not only lets you withdraw funds tax free when you retire but also allows you to contribute up to $15,000 annually, regardless of your income. You can also use funds in a Sole Roth 401(k) to invest in real estate.
   
   


5. Take a deduction for your home office. Many real estate professionals avoided this deduction in the past because the portion of the home used for the office didn’t qualify for the capital gains exclusion when the home was sold. However, since 2002, this restriction no longer applies, although, when you sell, you still have to recapture any depreciation you’ve taken.

http://www.realtor.org/archives/listneedmarch06

The LLC Set-up

What structure a new business will take is one of the major decisions that any business or company can undertake. This decision has a lot of implications for the operation and management of the company and can ultimately contribute to its success or failure. It is useful to examine the options before investing your time and money.

The simplest form of business registration is a sole proprietorship. This is usually a simple registration of the fact that an individual wishes to engage in public commerce and the nature of that business. Unless there are other licenses to obtain from the local regulatory authorities because of the nature of the business, this means a trip to City Hall, filling out the required forms, paying the minimal fees, and obtaining a business number that allows the company to begin business. The individual owner can then start up operations and assume all of the liabilities and tax requirements of the business.

A more complex form of business registration is incorporation. This involves registering the business as a corporation and issuing shares in that business to others who may wish to be part of the business. The act of incorporation involves filing acts of incorporation with the state and while an individual can prepare and file these without an attorney, legal and financial advice is usually required to ensure that the documents are in order. There will have to be a Board of Directors, officers of the corporation and a method to inform shareholders of the on-going operations of the business.

Somewhere in the middle of the previous two options is the option to set up an LLC. An LLC is more complex than a sole proprietorship and simpler than incorporation. It has some benefits and disadvantages. The disadvantages to choosing to set up an LLC are mostly in the time and costs of going through the process. Reliable LLC Filings will organize your LLC with the state for a one time fee of $279. Even with expedited filing, the process can take anywhere from 30-45 days. Once the business has been set up as an LLC or a limited liability company the advantages begin to kick in.

The major reason to set up an LLC is to protect the owner or owners of a business from liability. This form of business registration limits the liabilities of the owners to the level of investment that they have made in the business. All other debts, responsibilities or liabilities that are incurred or caused by the operation of the business are not their responsibility.

The other main reason to set up an LLC is for taxation purposes. Income from a limited liability company is only taxed once and the state does not levy additional income tax on the company or business itself. This is different from a C-corporation where income is seen as both corporate and personal and taxed at both levels when dividends are taken.

Reliable LLC Filing will help you navigate through the necessary paperwork to organize your LLC or PLLC. Our service includes doing a name check, filing with the Arizona Corporation Commission and publishing your Articles or Organization per state law all for a one time fee of $279.

Why not get started on your Arizona LLC or PLLC today? Remember, the sooner you get started the sooner you'll be protected!

Why Creating A Single Member LLC Is Better Than A Sole Proprietorship

When creating an LLC as a single member LLC, the business owner gains significant advantages over a sole proprietor business structure. With the costs of starting and maintaining a limited liability company being so minimal, most lawyers and CPAs would advise on the use of the single member LLC. . . it is a protection vehicle and does not create any added complexity when it comes to operations and taxes.

Protection For The Member Of The Single Member LLC

A limited liability company provides a legally enforceable shield protecting you personally from the obligations and liabilities of your business. If anyone ever wanted to file a lawsuit against your business, then you would not be personally liable just because you are the owner. If you run your business as a sole proprietorship, you are inextricably part of the business and so you become the target of anyone who has a claim or wants to make trouble for your business. You cannot avoid this personal liability in a sole proprietorship. You need a single member LLC.

Do not think that given the nature of your business, a lawsuit is unlikely.

Business lawsuits are now an epidemic in America. The more your business interacts with others, the more likely there could be a claim. Now, you can start to think through the chances of who can sue you but instead, try to understand what lawsuits are all about. They are about money. If your business becomes successful, your chances of lawsuits are higher because you will be getting and keeping more assets. Instead of justifying or hoping you never get sued as a sole proprietor, it is better to ask whether paying the few hundred dollars to create and maintain an LLC is worth having this protection. Arizona does not require annual fees, annual filings, annual taxes or anything else. Once your LLC is created in Arizona, it lives on fee-free in perpetuity or until you dissolve it with the state.

No Added Complexity When It Comes To Operations Or Taxes

From an operational perspective, a single member LLC can operate his or her business in almost the same way as a sole proprietorship with a few exceptions. When creating an LLC, the entity should have a simple operating agreement in place but otherwise, there are no legally required formalities like meetings and written approvals as there are with corporations. Maintenance is minimal. When conducting business, it is very important to make clear to all parties that it is the LLC that is the business. This usually means including your LLC business name in all your written material (marketing material, advertisements, contracts). For a single member LLC, there is no difference in how the business reports and pays federal income taxes . A single member LLC is disregarded by the IRS for tax purposes only and so you pay taxes using the exact method of rules for sole proprietorships. By operating a single member LLC, you get all the advantages of the limited liability company as a business vehicle without any added difficulties when it comes to income taxes.

Professional and Trustworthy Image

Customers today are skeptical when it comes to choosing who to do business with. One method in which they distinguish a legitimate business from others is when they see that a business is being run through a formal legal entity such as an LLC. Let us face it. It is so simple to put forth a business name to the public and allege that you are running a business. This is all that is required for a proprietor to start. Many customers recognize a business that has taken the steps involved with creating an LLC likely has intelligent and serious owners behind it. A single member LLC business generally portrays more trust and professionalism over a sole proprietor running the same business. Of course, there are many legitimate and respectable sole proprietor businesses out there but for the potential customer it is difficult to ascertain which ones are for real and are trustworthy. It helps a lot when customers see an LLC designation after a business name. Creating an LLC can makes it easier to launch your business and get those customers.

About the Author
Reliable LLC Filings does not dispense legal advice. The LLC Expert does not currently offer LLC formation services in Arizona. For more FAQ information about the LLC v. Sole Proprietorship, visit the LLC Learning Center at http://www.thellcexpert.com/
Source: http://www.articlesoft.com

The journey of a non-profit corporation

It was bound to come up. We start a document filing company and within weeks several people have called expressing an interest in starting a non-profit company. I defer these people because I don't have any experience in this arena.

And then something remarkable happens. I am invited to be on the board of a yet-to-be-formed non-profit corporation. The non-profit will be for the benefit of Phoenix Children's Hospital. There are a few really remarkable things about this request, 1) I just started an LLC filing company so this is really up my alley and 2) part of my 5-year plan is to be on the board of a philanthropic organization.

I leap at the chance to handle the paperwork and...we're off.

Except, I discover that starting a non-profit (ironically) takes quite a bit of money. It seems that there are actually two steps to the process. Both are fairly involved and neither are cheap.

The first step is to file the incorporation papers with the ACC. Before that happens, we have to make a determination if we are going to be tax-exempt or non-tax exempt.

We have a few options. We can hire an attorney; the best one I found in Phoenix charges about $1,300 to fill out and file the forms with the ACC. After doing some fact checking, I realize that he isn't even marking up the filing fee. The rest of his fee will help us with legal organization once we're official.

But, we don't have $1,300. We have just about enough money for me to file the tax-exempt incorporation papers with the State. Sigh! Its an unfamiliar form and there are a few blanks that intimidate me. It's a big responsibility but I'm going to navigate through it.

LLC vs. Corporation: Which is right for you?

Someone asked me today if I would help them set up an Arizona Limited Liability Corporation. The problem is, there is no such animal. In Arizona, your options are to incorporate – either for profit or as a non-profit – or form an LLC. The “C” in LLC stands for Company and not Corporation. So, you’d be forming an Arizona Limited Liability Company.

It’s common for people to question which vehicle is right for them. Although LLCs are a relatively new type of business structure and people may be more familiar with corporations, LLCs are growing in popularity. The primary advantage of an LLC is that it allows its members the personal liability protection of a corporation, but without all of the corporate formalities. Annual statistics shows that Arizona businesses are nearly three times more likely to choose an LLC over a corporation because the Arizona LLC is cheaper to form, easier to operate, has flexible tax options, and far fewer formalities than Arizona corporations.

Case in point; for corporations the Arizona Corporation Commission (ACC) requires an annual shareholder meeting, an annual meeting of the board of directors, documented minutes of the shareholder meetings, an annual report and an annual fee. The ACC requirements for LLCs...zip. No meetings, reports, or fees.

Add to this the ability to form an LLC that gets taxed like a S Corporation and you can easily start to see why an LLC is the preferred method of doing business and holding properties for Arizona small business owners, real estate agents and real estate investors.

As of July 5, 2009 there was a combined total of 352,394 domestic LLCs and PLLCs vs. 126,546 domestic corporations formed year-to-date in Arizona. Statistics pulled from http://starpas.azcc.gov/scripts/cgiip.exe/WService=wsbroker1/connect.p?app=statistics.p.

Different Types of Start-up Businesses

When creating a start-up business, there seems to be a million different things that have to be taken into consideration. Finding money, perfecting a service, product or line, making important connections, and other tasks create a bewildering array of decisions that need to be made. One such decision that shouldn't be overlooked is the type of organizational structure you'll be using.

There are multiple kinds, but all of them are chosen on the basis of taxes, management direction, and matters of legal liability. A sole proprietorship is the most basic organizational structure, and the most common one among start-up businesses. In the sole proprietorship structure, the founder of the company takes in all the profits and has all the decision-making power. Needless to say, organizing such a company is also an easy task. Unfortunately, this is where the benefits end. Any profits you make are taxed as personal income, your company will pay higher taxes, and you take on all legal responsibilities for your businesses' actions, meaning that personal assets are vulnerable to fines and taxes. Still, going it alone can be a good plan for some start-ups.

When two, three or even more people come together to start a business, it is called a partnership. There is more legal paperwork that needs to be taken care of in this type of arrangement than there would be with a sole proprietorship. Each partner needs to be aware of his or her own level of liability, as well as the repercussions of walking away from the partnership. Sit down together and work all of these details out so that they don't become sticky issues later. Make sure that there is an equal balance of power and that everyone is comfortable within their own role. Most importantly, get it all on paper so there is always a document to refer back to if there should ever be a disagreement.

A limited partnership works much as a partnership, though there are a few key differences. The first is that partners, as either investors or advisors, serve under the same rules as a partnership, but not all partners are equally liable in a legal sense, though at least one partner must agree to take the unlimited legal liability attached to a sole proprietorship. The second is that partnership agreements include clauses that provide for a return on any investments made into the start-up, which can be a good way for start-up businesses to get the beginning funds they need. This rate of return is chosen at the time the agreement is made.

Finally, there's the option of incorporating your start up, effectively turning your company into a legal entity separate from owners and employees, at least in terms of legal liabilities. This protects your assets and, even better, can be done on your own. However, there are multiple kinds of incorporation that a company can become, and each one is held to different rules and standards by the government. Forming an LLC over a corporation limits some possible drawbacks that could include increased cost, tighter regulations, company size requirements, and limited financing options in the future, depending on what type of incorporation you choose.

Even though it's not the fun part of starting your own business, it is important that you get these steps completed as soon as possible. When developing legal documents, you will want to remember to be as detailed as possible in order to protect your own interests if there should ever be a conflict between yourself and other involved parties. Staying grounded and making wise decisions will allow you to focus more on the business once things really get going.

Article Source: http://www.ArticleStreet.com/

Who to use to form your LLC

Many people question what is the best way to set up an LLC in Arizona. A routine Google search brings up pages of options from online filing companies (typically out of state), attorneys, CPAs, other document filing companies and more. There are even sites for the do-it-yourselfer.

Online LLC companies

We’re often surprised to see how much these companies mark up the fees. Many lure customers in with low rates but then add on other unnecessary costs. Or, they don't tell you that their fees don't include the mandatory publishing required in Arizona. Before all is said and done, customers have spent way more than they should have on services they don’t even need.

An online LLC formation service may not be the best route to go. Many of them are hard to get on the phone and lack the local expertise to navigate the ins and outs of Arizona.

If you are an agent organizing a PLLC for your real estate license, you need to be especially careful. Experience tells us, since we are located in the Phoenix area, that the information required for the Arizona Corporation Commission (ACC) is specific. Even more specific is that the verbiage required by the Arizona Department of Real Estate in order to transfer your real estate license into the PLLC. We wonder if online services are versed in the technicalities beyond the requirements of the ACC.

LLC Attorney

You could hire an attorney or a CPA to handle the filing for you. Hiring an attorney or CPA to handle LLC formation will always cost you more. While at some point you may need legal and tax advice (because by law we cannot provide that for you), you DON’T need to pay exorbitant fees for a “professional” to organize your LLC or PLLC for you. Chances are they are going to farm this routine business out to someone else anyway.

It is better to save your money and apply it toward obtaining any legal advice you need from an LLC attorney when and if you need it. Pay your LLC attorney for legal advice and not to do the administrative and follow-up work with the ACC to form your limited liability company.

Reliable LLC Filings, LLC

The process of setting up an LLC or PLLC in Arizona is fairly straightforward...but it is lengthy. Even when paying for expedited filing services, it can take four to six weeks to set up an LLC in Arizona.

Our service saves you the time and hassle of doing the research with the ACC, figuring out the process, driving downtown to do the filing, finding an authorized newspaper to publish the LLC in accordance with State law.

• "I personally labored through figuring this out on my own several years ago, but I wish there would have been a service like this then." Daniel D., Chandler, AZ

Reliable LLC Filings charges one flat fee of $279.00 to organize, file and publish your LLC from start to finish. We'll even provide you the forms for the ADRE. No upcharges and no surprises.

We’re here to help and we’re here to save you money. We provide reliable, timely service that you can count on. We're just a phone call away!