The INC side of the Business

[B&B Investments]

:SM112:
I'm planning to start a new RE business in Washington.
What are the first steps I should take? And Do i really need to register with the MBL to get started in the business or do I need to get this started first be I even try to invest and put forth my first deal.

I have been told i need to do a few things first:

1. Determine your business structure.
2. Visit the Washington Licensing Information (WALI) website to obtain your license referrals and forms.
3. File your Master Application and other state required forms.
4. Contact your city and county jurisdictions to determine whether there are any licensing requirements.

Should all this be done before i even try to get my first deal together.

[Aldo]

More info is needed to offer a proper reply, most importantly the aspect of "RE Business" you are considering.

[B&B Investments]

OK Aldo What I am talking about is covering my ass. I hear over and over again about making a company to do your Investing in so the people can not come back to you personally for what ever reason.
My Question is
What do I need to do too start this company be it LLL LLC S Corporation C Corporation or what ever it maybe be.

My Primary investing will be SFR for now. And Maybe notes but for now i will filter in SFR.

I hope that helps Aldo.

Stephen
B&B Investments

PS I need that first before i can build my website of which BTW i am getting free from an old girl friend.

hehehehe :whistling :SM135:

[JoeC_Cereniti]

OK Aldo What I am talking about is covering my ass. I hear over and over again about making a company to do your Investing in so the people can not come back to you personally for what ever reason.
My Question is
What do I need to do too start this company be it LLL LLC S Corporation C Corporation or what ever it maybe be.

My Primary investing will be SFR for now. And Maybe notes but for now i will filter in SFR.

I hope that helps Aldo.

Stephen
B&B Investments

PS I need that first before i can build my website of which BTW i am getting free from an old girl friend.

hehehehe :whistling :SM135:
Both S Corps and LLCs will protect your personal assets from lawsuits, debtors etc. The main differences in the two is the organizational steps and the way you are taxed.

Even though personal assets are protected under a LLC, the IRS taxes an LLC as a partnership. That means you will be required to complete a schedule C as part of your 1040 yearly return. S Corps are taxed like regular corporations. That is, the corp is taxed on it's revenue. If a dividend is declared, then the those dividends are taxed as investment income to the individual receiving the dividend.

There are specific rules for both as far as setting up either the LLC or the S Corp (btw I would not recommend a C Corp.) Generally, both an LLC and S Corp require submitting a document to the state government. In the case of a LLC, this document is generally called Articles of Organization (A few states refer to this organizational document as a "certificate of organization" or a "certificate of formation.") while the S Corp document is called Articles of Incorporation. Both LLC and S Corp requires registration fees that are payable to the state. You will need to check with your state to find out their fee schedule.

Also, both a LLC and a S Corp require that you post notification in the local newspaper of your intention.

You will also need to check with your state on the regulations regarding an LLC. Some states require that there are at least two partners before a LLC can be granted while a S Corp limits you to 75 domestic (non foreigner) shareholders. This number can be anywhere between 1 and 75. Some states also require that you prepare an LLC operating agreement. Once again check with your state.

With an S Corp it is also required that you file by-laws and resolutions as well as select an official stock certificate and a stock ledger.

Keep in mind that LLC's must not have more than two of the four characteristics that define corporations: Limited liability to the extent of assets; continuity of life; centralization of management; and free transferability of ownership interests. If you have more than two, you will be required to form a corporation.

Hope that helps a little. As info, Cereniti was established as a S Corp.

[B&B Investments]

Both S Corps and LLCs will protect your personal assets from lawsuits, debtors etc. The main differences in the two is the organizational steps and the way you are taxed.

With an S Corp it is also required that you file by-laws and resolutions as well as select an official stock certificate and a stock ledger.

Keep in mind that LLC's must not have more than two of the four characteristics that define corporations: Limited liability to the extent of assets; continuity of life; centralization of management; and free transferability of ownership interests. If you have more than two, you will be required to form a corporation.

Hope that helps a little. As info, Cereniti was established as a S Corp.

:confused:I am not sure If I really Understand this or not. But what i think I am hearing you say is that it is best to make a S Corp than it is a LLC. Now my Question is this. what is an S Corp and a C Corp and what is the big difference. And with the S Corp you said-- "by-laws and resolutions as well as select an official stock certificate and a stock ledger.""
Could you please tell me what these mean and how to go about or advise what to put in them. And then what would be the first step besides checking into the state for the laws of such. after that what is done next. Also any advice about where a good place is to Incorporate at.
Thanks for all your help guys and hope i can learn this stuff to do it right and make you all proud of me.

Have a wonderful day or evening which ever you are at.

Stephen Biehn
B&B Investments :SM106:

[OzarkVU]

Stephen,
There are several books out on this subject. However, you'll see that our attorneys who are members here have not responded. If they did, they would probably have a tagline that what they are saying here does not constitute legal advice.

The choose the right entity for your business is a decision that must be made with a lot of thought. My 2 cents worth is to talk to an accountant and an attorney. It may cost you a few bucks now, but will pay off in the long run with expenses that you WON'T have.

As I said, my 2 cents worth. In my case, they are 2 EURO cents, which are worth more than our 2 US pennies. :scream:

Ed

[JoeC_Cereniti]

:confused:I am not sure If I really Understand this or not. But what i think I am hearing you say is that it is best to make a S Corp than it is a LLC.Actually in your case, I would go with the LLC. It is the easiest to set up. Just check with your state to make sure that you do not have to have two partners to establish. Setting up corporations is much more intensive and I would not recommend anyone doing it without the aid of an attorney or an accountant that specailizes in business start ups. Go to your state web site and read the business section of the Department of Revenue page. It should give you all the information you need.

[Jim Johnson]

For what it is worth, a "c" corp is quite complex and untill you are much larger it probably is not worth the time and effort. I have a "s" corp and several LLCs. The advise to seek legal advise here is really the best advise you can take. You then can map out how you are going to handle things over the long haul. For me, my "s" corp manages the LLCs, partnerships and land trusts.

:confused:I am not sure If I really Understand this or not. But what i think I am hearing you say is that it is best to make a S Corp than it is a LLC. Now my Question is this. what is an S Corp and a C Corp and what is the big difference. And with the S Corp you said-- "by-laws and resolutions as well as select an official stock certificate and a stock ledger.""
Could you please tell me what these mean and how to go about or advise what to put in them. And then what would be the first step besides checking into the state for the laws of such. after that what is done next. Also any advice about where a good place is to Incorporate at.
Thanks for all your help guys and hope i can learn this stuff to do it right and make you all proud of me.

Have a wonderful day or evening which ever you are at.

Stephen Biehn
B&B Investments :SM106: