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Lane
Lane, JD, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 12692
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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I have an LLC with a partner but I also do work separately

Customer Question

Hi,
I have an LLC with a partner but I also do work separately as an independent contractor (line producer, producer in entertainment). The company I work for currently wants me to be paid as an LLC. My question is:
Do I form a new LLC under my current one? If so, do I make my current one a Holding Company LLC or a Series LLC? And, if so, how do I go about that?
or
Do I form a brand new separate entity LLC? All of the businesses are in the entertainment industry but if there is a way I can use my current LLC, I would like to.
Thank you,
Submitted: 1 year ago.
Category: Finance
Expert:  Lane replied 1 year ago.

I hold a JD (Juris Doctorate, a doctoral degree in the law), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in finance & tax, as well as CFP® and CRPS designations. - I’ve been providing financial & tax advice since 1986.

Hi - I can help here - all excellent questions

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Given that we're just talking about two entities, likely the cleanest, easiest way to do this is set up a separate LLC.

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Breaks up your liability ... as a single member LLC you'll just do a schedule C as if you were a sole proprietor ,... and unless you think that you continue to doe several of these, the series LLC is likely overkill.

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You certainly can just have them pay the existing LLC but then (1) you'll need to do an operating agreement to separate that income stream, profit, loss, etc... from the one that's there with your existing partner and (2) you WILL be subjecting both operations to the risks of the other (lawsuits, creditors, etc)

Expert:  Lane replied 1 year ago.

Again, no reason not to use the existing LLC other than (1) deciding how to allocate between you and your partner and (2) the pooled liability.

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If you want to do this under one LLC you're simply doing what many do (having different product lines or operating divisions within the same company).

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But again, either having the existing LLC own the second OR having the company pay the existing LLC forces the issue of how income, expenses and ownership are allocated.

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My recommendation would be to set up a second Single Member LLC

Customer: replied 1 year ago.
Okay, what is the quickest and cheapest way to form an LLC in your opinion? Legal Zoom?
Expert:  Lane replied 1 year ago.

What state are you in? (legal zoom is definitely the best compromise between doing it yourself and sitting down with a lawyer).

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But in most states now it's a basic fee and a couple of forms (article of organization)

Customer: replied 1 year ago.
california
Expert:  Lane replied 1 year ago.

For example, in CA it's Articles of Organization, Form LLC-1

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Form LLC-1 can be completed online at the California Secretary of State’s website and then filed by postal mail or hand delivered to the Secretary of State’s office. The filing fee is $70. With hand-delivered filings at the Sacramento Secretary of State's office, you can request expedited filing for an additional fee

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Every California LLC must have an agent for service of process in the state, but it can be you, as long as you're in the state

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An operating agreement is not required in California (and with a single member not terribly important ... sometimes using a CA opp Agmt template will help with protecting the corporate veil)

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Every California and foreign LLC registered in California must file a Statement of Information, Form LLC-12, with the California Secretary of State within 90 days after filing their articles of organization (Form LLC-1). Thereafter, a Statement of Information must be filed every two years during the applicable filing period.

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Form LLC-12 is available on the California Secretary of State's website. The initial Form LLC-12 must be filed by mail or hand delivered. Subsequent filings can be completed and filed online as well as by mail or hand delivery. The filing fee is $20.

The Statement of Information must include:

  • the LLC’s name and California Secretary of State file number
  • the name and address of the LLC’s agent for service of process
  • the street address of the LLC’s principal executive office
  • the LLC’s mailing address, if different from the street address of its principal executive office
  • the name and complete business or residence addresses of any manager or managers and chief executive officer, if any; if no manager has been elected or appointed, the name and business or residence address of each member
  • a valid email address, if the LLC chooses to receive renewal notices and any other notifications from the secretary of state by electronic mail instead of by United States mail, and
  • the general type of business that is the LLC’s principal business activity (for example, manufacturer of aircraft; wholesale liquor distributor, or retail department store).
Expert:  Lane replied 1 year ago.

so that's $90 ...

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For Legal Zoom

$149 plus state fee basic

$289 plus state fee standard

$359 plus state fee gold plan

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Customer: replied 1 year ago.
Thank you so much for your help!
Expert:  Lane replied 1 year ago.

You're very welcome ... Your positive rating … (by using those the stars or rating request on your screen) … is thanks enough! … That’s how we’re credited for the work here

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Thank you,

Lane