SINGLE MEMBER LLC MISTAKES - Don't do these in 2020!
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- เผยแพร่เมื่อ 28 ก.ค. 2024
- Following up on last weeks initial list of mistakes you can easily avoid with your LLC, here are another 6 mistakes I see people make with their single member LLC's on a regular basis.
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James W. Hart
The Hart Law Firm, P.A.
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#singlememberLLC #limitedliability #hawthornlaw
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Around 5:30 I'm starting to wonder when there's actually going to be content.
The 5 mistakes actually start around 7:00
Regarding the question of improperly spending funds, I'll highly recommend Mike Michalowicz's book Profit First, which has some guidelines on what's basically the envelope method for dividing your company's revenue. Starting out, it's likely 1% profit (because if the biz can get by on 100% it can do it on 99% as well), 15% Tax, 50% Owner Compensation, 34% Operating Expenses but this will vary.
Thought it was just me.
god bless you
The information he provided prior to the most common mistakes is just as important. Especially for those who are new to this. Perhaps he should start putting timestamps in the description box for those with ADD and those who want to dictate what is and isn't pertinent "content".
ツ , I whole heartedly agree!! People should Be appreciative of the fact that he took the time to make this video and break everything down.
@@autumnleaves6383 they don't even have to appreciate, they need to go someplace else!
As someone who has made many of the mistakes you've mentioned due to starting businesses from flat broke (and homeless at times), I appreciate the information.
Most recently, after 3-1/2 years of being a SM LLC, I'm finally fixing my mess, was blessed with an accountant willing to work with me to make sure I fix the mess, and see a tiny light at the end of the tunnel.
I can say from experience (and multiple thousands of dollars of IRS penalties from forming a Partnership without understanding the legal requirements) that if you don't do "due diligence" to learn the rules to play by in advance, your failure to do so will come back to bite you big time. Ignorance is not an acceptable excuse when you're sitting across from the IRS Revenue Agent, and they don't care how little money you have to pay their bill. Don't make the mistakes I've made!
- Co-Mingling Funds
- Operating Agreement in place
- Proper Corporate Records
- Sufficient Capitalization to cover payables/debts
- Using for personal expenses
- Business Insurance
- Concealing/Misrepresenting Ownership
Of all of the videos I’ve listened to. These ones are the most organized and understandable with a lot of detail. Thank you.
The background looks great!! 😎 And thank you for this information, I needed to hear some of these.
Really looking forward to your future video on intellectual property rights! There are so many artists who want to start a business, but there are a lot of questions around selling your intellectual property through an LLC.
Thank you so much! You are a wealth of knowledge so someone like myself who is starting as a small business owner and trying to do this on my own to save a buck. Greatly appreciate your videos...keep them coming :)
Awesome videos! Keep them coming! It is really good information. Great presentation too!
This is an awesome video and I feel more confident moving forward. Thanks!
I watched the old video and was very happy to see this updated video
Thanks for this informative video. I started my business before forming an LLC so, I put my revenue into my personal account for the first 3 months. Once I formed the LLC, I moved the money from my personal accounts to the business account.
First off, big thank you to James Hart / Hawthorn Law for putting out this free and very useful video tutorial... And now what you are here for:
1) 7:05 - Commingling Funds
2) 7:58 - No Corporate Records
3) 9:15 - Inadequate Capitalization
4) 10:40 - Raiding LLC Bank Accounts
5) 11:40 - Not Having Adequate Liability Insurance
6) 12:30 - Misrepresenting Ownership of LLC
you are welcomed
People like you that do this, don't understand how TH-cam works. You are literally *kneecapping the earnings* of the content creator you're claiming to thank.
@@HockeyJock This is a good point. Wow.
This video really helped me and pointed me in the right direction! I've heard of piercing the corp veil, but now I know what that means. Thanks for sharing!
Thank you for dropping all of the knowledge!!
Perfect timing! Was just thinking if going thru legal zoom or some other service& wondering if it is ok for a side hustle. Now I have a clearer idea of what is needed.👍🙂
Sounds good - let me know if I can help in anyway!
Love your videos. Very informative and I like your personal/funny touch.
Your videos have come at a pefert time...thank you for sharing you knowledge!
Thank you very much for this valuable info!!
also watched your manager member versus member video. so helpful if a side-by-side comparison of both options were included to cover pros and cons. thanks for sharing.
Much needed information!!! So many businesses fail within their 1st year
Thank you so much for you time and information! Really Helpful!!!
I love your videos. Great personality, A lot of valuable information
I have watched many of your videos & you have helped me substantially in launching my LLC & in the near future I hope I can hire you to be my legal representation.
Mannnn great information and delivery! You are the man, I mean lawyer!😁👊 MUCH RESPECT!
I loved your lectures! Please don't dumb it down!
THIS IS HUGELY HELPFUL! Thank you!
Super helpful and thank you again for this information
I just joined a private label company today. Your timing is impeccable. I need to get intouch with you soon
Sounds good!
thank you!! this was very helpful.
Love your stuff and your style :)
I appreciate that!
I never got bored watching your channel. You've got sense of humor and you may not even aware of it lol. Thanks for sharing your knowledge Atty. Great video content!
Helpful video, thanks!
Good information - thanks for sharing!
Thank You For This Content Very Helpful !
Thank you for making this
this kind of advice can cost big money thanks for sharing.
New subscriber. Thanks for your videos very informative. Thanks for spreading your knowledge
You are so welcome!
He finally gets to the point at 7:05
You also make a wrong assumption that what he said prior to that was not important. What's wrong with you?
Maybe, make your own video.
@@hyacinthdibley2420 it's not he stalls too much
Thank you so much for these videos! We’re getting close to the legal stuff and it’s exciting and a bit daunting. We’ll be forming an LLC partnership soon. Do we have to keep a substantial amount in our business acct. as youtubers? We don’t have overhead, it’s just us two. Thanks again!
Funny thing is I just read some blogs that advised on how to form multiple LLCs (one being the parent to the others) as a way to keep owner's name secret/private. I'm not sure if this is the same thing that was mentioned in as #6 tip.
I just remember that I was overwhelmed with the info I was getting for JUST ONE company, yet here I was running into articles about opening and maintaining multiple LLCs. Hahaha. Oh man!!
Im a new subscriber... I like your info, THUMBS-UP!!!
Great video!!
Great content. Do you have any videos on how your LLC should be taxed depending on your income or business?
Gold! Thank-you
Thank you so much!
I love your personality 👏👏😘
Thanks!
I appreciate you so much!!!!
Great video...I discovered you today and have been binging your videos.
Regarding meeting minutes, should I keep minutes even if I am completely by myself? I guess this would be more like a journal of my decisions and why I made them.
I was wondering the same thing! Meeting notes with…who?
Outstanding info. A transparent lawyer? Unicorn folks.
Adorable cup "Da-Do"!
Question:
So how would I maintain privacy and personal protection when structuring an LLC or sole proprietorship? Recently a cyber bully connected my LLC to me and defamed my personal name and business name access the web. Would an anonymous LLC work? If not, what could a small business owner do to protect themselves from this?
Thank you!
Do I need to notarized the LLC agreement? Btw thanks for the information. I just subscribed.
very helpful....thks
Thank You!
"don't commit fraud" ... sage advice. ;)
Seriously, good video. Thanks for the content.
Thanks for this great video! I have a question about keeping personal and business finances separated. I have a checking account and savings account in the name of my LLC, but right now I am using a credit card that is in my name. I only use that card for business expenses. Would that put me at risk of a lawsuit piercing the corporate veil? If it is ok to use a credit card in my name, do I need to pay the credit card bills from my own checking account and then reimburse myself? Thanks again for making these videos.
“Man my hair” haha love this guy
Love it ty
How abt stock trading as a business: when exactly to think of getting an LLC, benefits?
Way off topic but what camera and lens are you using! Wow it’s clear! Is it 4K too? Thank you friend
This applies to my tax overage recovery business. I don't have any revenue yet! Thanks
thank you so much
Really like that wall
Thank you for the information. The city I live in just informed me I need a business license to rent out my primary residence. So I will be creating an LLC.
I am guessing that I would not want the property listed as an asset of the LLC. Correct?
Thanks again!
Love the Mug!
Thanks for the great info. I am setting up a Recruiting company. Currently I'm in Va, but might move- maybe to TX. Should I a setup a Delaware corp? Thanks
I’m wondering if you could do a video about PLLC‘s. Professional LLCs. I’m creating one. I’m also creating a separate LLC. It’s a bit harder to find information about PLLCs. I have professional liability insurance that covers me for the professions I will be working in under the PLLC. But I don’t know much about liability protection other than it’s not the same as with an LLC. Would love to have a video on this. Thank you for all your great videos!
Great video! If you moved out to another country (out of usa), would you still be able to run your LLC from the new country? What would be needed to be done? Do you know? Thanks!
commingling funds ~> What is a no-no here above & beyond using your biz account to fund rent/mortgage?
articles of org ~> how much scrutiny do you need to give to one thats prefab'd?
inadequate capitalization ~> Is there a rule of thumb to follow for capitalization prior to pulling distributions?
Great video and content! I have a unique question I would love some help with. I have no teaching degree or series 7, but I would like to create a stock education class for college students where alongside education I give them performance based loans & grants that grow to business partnerships. To fund this venture, I believe I should create a holding company llc, create an operating llc (C corp?), and take personal funds and money from friends/family to fund the holding llc. Then fund the operating llc via the holding llc, pay myself a salary from the operating llc, and put any profits back to the holding llc. Then once I have enough capital in my holding company, I can use it to form a third llc as the education business. Would this be the proper way to form the businesses and prevent being double taxed or would you suggest something different? Thank you 🤗
"I decided to do a sixth because I'm a giving type of person" the key to a happy marriage 😉
Thank you for taking the time to give free advice. I appreciate all you have to say. As a new AMZ Seller I just opened a "Close LLC" in WY (from Texas). As the only member how do I cover meeting minutes? I do have conversations in my head... write those down? Is there an official format needed for the "meeting minutes"? thx do you live in a log cabin?
You do the minutes as if you are having a meeting with yourself, and what was discussed.
Exp:
Title [Meeting of Minutes of "company full name" LLC]
Participants present: Yourself, (plus any other member if applicable)
CALL TO ORDER: This meeting was called to order by (name yourself) at (give date and time) in response to a business need....(list why the meeting was held, ex: buying a laptop, or rental property etc)
Approval: The above order was unanimously approved by the attendees of "company full name" LLC and finalized on (date, and time meeting ended)
@@jwmultimedia4567 thank you😙
@@jwmultimedia4567 thank you!
The only thing I’m missing at the moment is insurance. Do you have any recommendations of which insurance company to use?
I currently run two different businesses and both use Hiscox. Hiscox offers targeted insurance policies for virtually EVERY kind of company and they're incredibly affordable. My primary company offers communications services and needs a $2 million professional and general liability policy. Hiscox provides my LLC coverage for under $70/mo. There are other providers out there and I'm no business consultant, but I've been very happy with Hiscox. Good luck!
So, you’re saying, set up an extra business account for the money you plan to use personally? Just want to make sure I’m following.
WHAT LLC IS BEST FORB REAL ESTATE REHAB OR REHAB AND HOLD?
In addition to an LLC, should someone first get a trust to put everything in to keep their name off personal property? I knew someone who formed a trust with his dad to keep their name off all personal property. Then had all mail for the trust go to a P.O.Box as well.
Sir, on your "mistake #4" you mentioned if you wanted to pay rent, write yourself a check and do that 'bill paying' out of your personal account. My question is: I am eventually going to be paying rent and utilities for running my business out of a garage that is not mine. I was going to write the owner of that garage a check out of the business account. This is correct? Or I should pay myself first, then pay the garage owner from my personal account?? Thank you for your response and for your efforts to support small business owners (like me) who generally am learning on the fly. Kat
Thanks
Welcome
Questions:
1. If someone is just starting a business, and before they are able to open a business bank account pay for needed services (Lets say s Customer Management System(CMA)) with their personal account, could that pierce the corporate veil?
2. If someone has a cell phone and add-on a data plan for an iPad Pro (to be used for business), could that legally be considered a member contribution? If its discussed in Meeting Minutes or somehow documented that "this is being paid for by member X until such time as the business becomes profitable (starts to bring in ANY money) and is above to pay for it directly"?
Any help to point me in the right direction would be greatly appreciated. Thank you for any assistance you can provide.
This is great 😆👏✅️
Thanks!
Thank you...what is the best way to form multiple stream businesses? I have one LLC, its doing very well, I want to set up another one. thank you
Good question, I want to do the same.
Do I need to get a separate EIN for the DBA I just added? The business is credit repair hence the LLC.
Have any advice of starting a physical business? I want to start my own welding business in Michigan.
Everything I talk about for online business is directly applicable to physical businesses as well, with the exception that you may have local rules and regulations that you would need to follow. Check with a lawyer in that state up north. ;) #gobucks
Are there companies you can hire to setup the LLC properly and then pay them an annual fee to make sure all the regularly required paperwork is filed each year? Like I know there are certain forms and what not that need to be submitted to the state/country every year. I want things to be as hands off as possible, even if I have to pay for it.
Do you offer further advice on LLC formation? How would I go about hiring a tax professional?
Is there a specific way for keeping the meeting minutes with time and date stamp? I mean when someone get sued, they can prepared all the docs in a day or two and say I have kept all minutes.
Great video! you mentioned inadequate capitalization, I recently set up my business bank account but Im starting out so I'm using my own personal funds for start-up costs. Is it better to transfer my personal account money to my business account for these expenses?
He mentioned that you need to record it as a capital contribution or loan
I’m just starting my business, and the LLC sounds like a really good plan. But I think I’m going to get my EIN as a sole proprietorship and then once my business starts growing more, I’ll switch to an LLC, hopefully it’s the right choice
Why is that a good choice? Just curious
@@BBRR442 because I think you have to pay a monthly fee or price to have your LLC running and if the business is not bringing enough revenue I don’t think is that worth it you know
What if we use our Business Credit card to pay some expenses, like rent or phone bills for our home based business. In addition, what if we didn’t use our business checking account to pay off the business credit card expenses described. But, we paid those credit card expenses from our personal checking account? Would this be considered coo-mingling of funds ?
I'm starting a manufacturing company is an LLC and insurance all I need?
I'm the owner but I will have some members working as my executives do they need to be part of the LLC
So when you start and the LLC has no money and everything is coming out of your personal pocket. Do you give the LLC a loan with interest and take that money back later. Are there taxes on the loan money? Do you give a block of money loan and later the business needs more you give a second loan and so on?
How to fill out a W-9 as a solo LLC? SSN or EIN?
EIN if you have one
Is there anyway to have a kitchen sink LLC that covers many different types of “business”?
does the corp veil work the other way around?
in the case of a divorce, can the family court take away assets from my llc or does it have that same protection?
Why don't make a video about Forming single member LLC for non US resident and best state to locate it ? Any advise in this matter ?
Hi! I love your videos! I would like to set up a consultation with you- hopefully I can retain you soon! What is the best way to set up a consultation? Should I go to your channel?
I’m an earlier podcast, you recommended no LLC if you don’t have revenues, low risk business and no assets to protect. I have lots of assists to protect but I’m just starting the business and it’s low risk.
I'm just a fan of yours and heard a broadcast of Doggie Diamond on TH-cam last night getting pretty deep. WATCHING you today. . WELL enjoy your day my friend.
I text slow.
Is it best to pay your Self-employment tax quarterly or money?