002:

legally establishing your business

Establishing an llc

If you’ve concluded from the information provided in Section 001, that you would like to form an LLC, the process can be pretty simple especially when using a reputable filing and business formation service — I’ve used IncFile to form both of my businesses and highly recommend it.

IncFile breaks down it’s LLC formation service into 3 Tiers: Silver, Gold, and Platinum.

I’ll compare below, covering the differences between each option to help you decide which is best for your situation.

With IncFile, each package includes:

• Preparation + Filing of the Articles of Organization

  • They will collect and review your information, prepare your documents, and send them directly to the state of formation.

• Registered Agent Service (for 1 Year)

  • A Registered Agent is an individual or entity that has been chosen to receive process notices, government correspondence and compliance-related documents on behalf of the LLC.

  • In many states, including New York, you are able to appoint yourself as the Registered Agent for your LLC, but there are a few things to keep in mind when considering this:

    • A registered agent must ALWAYS be present at the physical address registered during normal business hours to receive correspondence. If the registered agent is not present when a delivery is being attempted, the consequences can be quite severe (LegalZoom).

  • After 1 year, IncFile charges a yearly fee of $119 to remain the registered agent for your company if you opt in.

• 30-min Business Tax Consultation

  • Speak directly to a CPA during a no obligation call to answer any specific questions you may have about your business.

• Online Access to Incorporation Documents

  • Though you do receive your documents physically in the mail, IncFile provides online access to your incorporation documents so you are able to download them at any time.

Silver Package

If these features feel comprehensive for your business, going with the standard Silver Package from IncFile will work!

The package cost is $0 + State Filing Fee (which is $205 for New York State).

Gold Package

The Gold Package is what I chose when I formed my LLC a few years ago.

The package cost is $149 + State Filing Fee (which brings this package to $354 for those filing in New York State).

With the Gold Package, in addition to all of the above, you receive:

• An EIN (Employee Identification Number)/Tax ID Number with the IRS

  • An EIN is assigned by the IRS in order to identify taxpayers.

  • Providing an EIN is required to open a business bank account, apply for business licenses, and file business tax returns. If you choose to go with the Silver Package (and not receive an EIN number), you are able to apply directly with the IRS to receive one for no fee.

• Operating Agreement

  • A Operating Agreement is a private agreement between the members that details the ownership, rights, and responsibilities of the LLC members.

I would recommend adding this to your package if you have a multi-member LLC.

• Banking Resolution

  • A Banking Resolution dictates which member(s) of the LLC are authorized to open a bank account through the business and designates who has signature authority (or control) of the bank account.

Again, I would recommend adding this to your package if you have a multi-member LLC.

Platinum Package

The Platinum Package is the most comprehensive of all LLC formation offerings on IncFile. The package cost is $299 + State Filing Fee (which brings this package to $504 for those filing in New York State).

With the Platinum Package, in addition to all of the above, you receive:

• Business Contract Templates

  • Access to over 25 high quality legal documents written by a business attorney. These will help keep your business contractually protected.

Now, if I were to form an LLC knowing what I do now, I would choose the Platinum Package because of this feature. Creating legitimate contracts (especially without access to a lawyer) is a huge undertaking. I would have saved so much time and energy if I had these legal templates.

• Domain Name + Email Service (for 1 Year)

  • Domain hosting can cost you anywhere from $20 to $70 per year through Squarespace — and you are able to transfer an external domain into a Squarespace site if you go with this option.

  • After 1 year, IncFile will give you the option to renew or cancel your service.

*All data was compiled on or before 10/15/19. Rates and prices may change.

Ready to form your llc?

should you incorporate in delaware?

The answer for you, is probably no.

Nearly half of US publicly traded companies are incorporated in Delaware — including Apple, Coca-Cola, Google and Wal-Mart.

There are tax and legal perks for these corporations, but most of these perks wouldn’t matter to you if you’re only forming an LLC.

Curious about the benefits? — see here for specifics.

register as a sole-proprietor

If you’ve decided that operating as a Sole-Proprietor is the best option for you, here are the things you need to know.

no need to register:

According to the US Small Business Administration, no action is needed to form a Sole Proprietorship. This is the default business distinction given to individuals that operate as Independent Contractors or Freelancers when no other action is taken to formalize a business structure.

at the state level:

If you plan on operating your business under a name other than your own, you must register that name with your state government. You must use an original name, it cannot be claimed by another business. Check your state government’s website for specific instructions on how to file this paperwork.

for those In New york City:

If your business operates under a business other than its legal name, you must receive a Certificate of Assumed Name from your county clerk. This certificate is often called a "business certificate." There is often a fee associated with this registration, but varies by location.

County clerks are separate for each 5 boroughs:

• Bronx County Clerk

• Kings County Clerk — Brooklyn

• New York County Clerk — Manhattan

• Queens County Clerk

• Richmond County Clerk — Staten Island

Liability Insurance

In most service-based industries, you will be required to obtain liability insurance.

Liability insurance covers you and your business from issues like a client’s claim of bodily injury and associated medical costs, as well as property damage. Insurance renews on a yearly basis, but most companies will remind you via email when it’s time to update.

As a private personal trainer, most gyms and even large buildings in NYC will require you to have liability insurance and list their location as an “additional insured” and provide them with certificate that looks like the document to the right.

I have always worked with a company called Alternative Balance. Their policies are straight forward and they’re very easy to deal with. Standard coverage is up to $3,000,000 — which is triple the amount I’ve been asked to maintain as a trainer.

Alternative Balance provides coverage for the following professions:

• Cosmetology + Estheticians

• Yoga

• Massage

• Pilates

• Personal Training

• Wellness + Life Coaching

• Nutrition and more!

Pricing is as follows:

• Student (in trade school) — $189 per year

• Per Diem (working under 10 hrs per week) — $219 per year

• Professional (working more than 10 hrs per week) — $249 per year

*For each “additional insured” you add, there is a fee of $10

Next: 003 Getting your $ in order

disclosure

I have chosen to partner with a few of the services I’ve personally tried and trusted, on an affiliate level.

Meaning, at at no additional cost to you, I will earn commission if you click through and make a purchase.