5 ms·

He writes: Each separate business venture should usually have its own LLC. It’s very cheap through companies like LegalZoom, and well worth it. If I plan to la

by matt1 17y ago

He writes: Each separate business venture should usually have its own LLC. It’s very cheap through companies like LegalZoom, and well worth it. If I plan to launch a few websites over the next couple years. am I supposed to create an LLC for each one? I think I've read elsewhere that you can form an umbrella LLC to cover them all. What have your experiences been with this? (FWIW: Before I do anything I'm going to meet with a lawyer... but the more background knowledge the better.)

davidw 17y ago
Seems like the 'transaction costs' (registering the LLC, bank account, etc...) could add up unless the sites really are independent, perhaps with different people working on them.
RiderOfGiraffes 17y ago
Each business should have its own company. Are these web sites separate businesses? Or are they different faces of the same business? I have five web sites, but two businesses. Each business has and is its own presence and personality. Each web site clearly belongs to exactly one of those businesses.
sivers 17y ago
There are legal ("asset protection") reasons that many taxi companies have each car as its own LLC, or ski slopes register each slope as its own LLC. So if someone has a legal problem with one, and you can really show that you've been treating them separately in your bookkeeping and bank accounts, it's clear to the creditor that they're not going to be able to go after everything you've got. Then of course as they grow there are reasons why you may want to sell one of your websites, but not the others, etc. The reasons why to do it are vague and different for everyone, but to me, it's a "can't hurt" and "why not?" type decision. You go to LegalZoom (or any similar service) and pay $400. They mail you a certificate you bring to your bank to open a separate account. Total spent: $400 and 30 minutes of your time. California is an exception: They make you pay $800 per year to the state for each entity. Most states it's only $50 and some states (like New Mexico) you never need to renew or pay any annual fees at all. If you're a virtual company with no physical office, you can set up your LLC in any business-friendly state you want. (Delaware, Nevada, Wyoming, etc.) Outside the U.S., British Virgin Islands is the quickest, cheapest, easiest place to do it: http://www.google.com/search?q=bvi+corporation http://www.google.com/search?q=bvi+corporation
- encoderer 17y ago
  NY has high costs as well: You have to issue public notice when creating a new LLC. I've found that Earth Class Mail's Beaverton, OR street address (which has no add'l cost past the standard ECM fees) works fantastic. The Oregon SoS website lets you register an LLC online on the cheap, less than $100.
- tamersalama 17y ago
  Does anyone know what is the Canadian equivalent?
- swencah08 17y ago
  > If you're a virtual company with no physical office, > you can set up your LLC in any business-friendly state > you want. (Delaware, Nevada, Wyoming, etc.) I think this issue is very interesting, and I would imagine it's important to a lot of HN readers. So let's say you're developing software (e.g. for a website, an iPhone app, etc.) by yourself out of your home. Are you really "doing business" in your home state? Unless I'm misinterpreting the parent comment, the answer is no. But if anything, it seems the opposing view may be more common. Specifically, many people say yes, wherever you're doing most of your work/programming/typing/etc. is where the business has "nexus". And if you're deploying a website, then there's the issue of the location of your datacenter, which could very well be in a different state. What are people's experiences and thoughts on this?
  - alain94040 17y ago
    Setting up an LLC in Wyoming will not shield your from tax issues in your home state (California or otherwise). Those LLCs are such a headhache from a tax point of view, plus they depend so much on state and federal regulations. Good luck doing business internationally as well. Why do you think we invented the 100% virtual company (http://fairsoftware.net http://fairsoftware.net)? Granted, the liability part is not as strong as a clean LLC, but you are shielded from your customers, and you can work with pretty much anyone worldwide without having to worry about any paperwork at all.
  - jellicle 17y ago
henriklied 17y ago
Gosh, I wish we had the LLC option here in Norway. The only "real" similar alternative we have is an AS (Aksjeselskap, "stock company"), which requires a minimum of 100 000 NOK in company capital (about 16 000 USD). The other viable option is a Norwegian foreign registered company (NUF). This means that I can create a company in a different country (e.g. England), and then register a company branch here in Norway. The problem is that these companies have gotten a bad rep in Norway, so you might find yourself in a bad position with the banks, as well as your customers.
- davidw 17y ago
  Yep, this is one of the very real problems with "Europe", which, by and large (and with a few exceptions like the UK and Ireland) makes it very expensive to start a company. It seems stupid to me... I mean, go ahead and slap high taxes on profits if that's what you choose as a society/country, but at least wait until there are profits to tax before you ask for a lot of money. Sure, I know the capital can theoretically be invested in your company, but 16K is potentially a lot for a web business... Incidentally, I'm curious about the foreign company option. Any other Europeans want to comment on how that works out in your country? I'm vaguely curious if I could link one up in Europe with DedaSys LLC without spending a fortune in bureaucracy...
  - Luc 17y ago
    I am glad you put "Europe" in quotes, because it's a diverse place etc.etc. That said, European unification has made possible a few new options for startup companies. There is now a 'European Limited Company' form, and it is also possible to register a company in any country from another country. For that last option the UK Ltd. route is very popular. Here in Belgium there are certain restrictions to starting up a limited company (minimum starting capital, diploma or experience needed, no bankruptcy in last 10 years etc.) which don't apply to UK limited companies. Apparently it's possible to start a UK limited company and conduct business in a different country, paying taxes in that country etc., as long as you have a return filed with Companies House and pay the yearly fee. EDIT: Just noticed the grandparent already mentioned this second option, oops.
- 17y ago
carbon8 17y ago
A series LLC is another option: http://en.wikipedia.org/wiki/Series_LLC http://en.wikipedia.org/wiki/Series_LLC
pageman 17y ago
is this the same as what was discussed here: http://farm4.static.flickr.com/3613/3324835985_f8339dd2cf.jpg http://farm4.static.flickr.com/3613/3324835985_f8339dd2cf.jp... here's the HN link: http://news.ycombinator.com/item?id=504151 http://news.ycombinator.com/item?id=504151

by matt1 17y ago

davidw 17y ago

Seems like the 'transaction costs' (registering the LLC, bank account, etc...) could add up unless the sites really are independent, perhaps with different people working on them.

RiderOfGiraffes 17y ago

Each business should have its own company. Are these web sites separate businesses? Or are they different faces of the same business? I have five web sites, but two businesses. Each business has and is its own presence and personality. Each web site clearly belongs to exactly one of those businesses.

sivers 17y ago

There are legal ("asset protection") reasons that many taxi companies have each car as its own LLC, or ski slopes register each slope as its own LLC. So if someone has a legal problem with one, and you can really show that you've been treating them separately in your bookkeeping and bank accounts, it's clear to the creditor that they're not going to be able to go after everything you've got. Then of course as they grow there are reasons why you may want to sell one of your websites, but not the others, etc. The reasons why to do it are vague and different for everyone, but to me, it's a "can't hurt" and "why not?" type decision. You go to LegalZoom (or any similar service) and pay $400. They mail you a certificate you bring to your bank to open a separate account. Total spent: $400 and 30 minutes of your time. California is an exception: They make you pay $800 per year to the state for each entity. Most states it's only $50 and some states (like New Mexico) you never need to renew or pay any annual fees at all. If you're a virtual company with no physical office, you can set up your LLC in any business-friendly state you want. (Delaware, Nevada, Wyoming, etc.) Outside the U.S., British Virgin Islands is the quickest, cheapest, easiest place to do it: http://www.google.com/search?q=bvi+corporation http://www.google.com/search?q=bvi+corporation

encoderer 17y ago
NY has high costs as well: You have to issue public notice when creating a new LLC. I've found that Earth Class Mail's Beaverton, OR street address (which has no add'l cost past the standard ECM fees) works fantastic. The Oregon SoS website lets you register an LLC online on the cheap, less than $100.
tamersalama 17y ago
Does anyone know what is the Canadian equivalent?
swencah08 17y ago
> If you're a virtual company with no physical office, > you can set up your LLC in any business-friendly state > you want. (Delaware, Nevada, Wyoming, etc.) I think this issue is very interesting, and I would imagine it's important to a lot of HN readers. So let's say you're developing software (e.g. for a website, an iPhone app, etc.) by yourself out of your home. Are you really "doing business" in your home state? Unless I'm misinterpreting the parent comment, the answer is no. But if anything, it seems the opposing view may be more common. Specifically, many people say yes, wherever you're doing most of your work/programming/typing/etc. is where the business has "nexus". And if you're deploying a website, then there's the issue of the location of your datacenter, which could very well be in a different state. What are people's experiences and thoughts on this?
- alain94040 17y ago
  Setting up an LLC in Wyoming will not shield your from tax issues in your home state (California or otherwise). Those LLCs are such a headhache from a tax point of view, plus they depend so much on state and federal regulations. Good luck doing business internationally as well. Why do you think we invented the 100% virtual company (http://fairsoftware.net http://fairsoftware.net)? Granted, the liability part is not as strong as a clean LLC, but you are shielded from your customers, and you can work with pretty much anyone worldwide without having to worry about any paperwork at all.
- jellicle 17y ago

henriklied 17y ago

Gosh, I wish we had the LLC option here in Norway. The only "real" similar alternative we have is an AS (Aksjeselskap, "stock company"), which requires a minimum of 100 000 NOK in company capital (about 16 000 USD). The other viable option is a Norwegian foreign registered company (NUF). This means that I can create a company in a different country (e.g. England), and then register a company branch here in Norway. The problem is that these companies have gotten a bad rep in Norway, so you might find yourself in a bad position with the banks, as well as your customers.

davidw 17y ago
Yep, this is one of the very real problems with "Europe", which, by and large (and with a few exceptions like the UK and Ireland) makes it very expensive to start a company. It seems stupid to me... I mean, go ahead and slap high taxes on profits if that's what you choose as a society/country, but at least wait until there are profits to tax before you ask for a lot of money. Sure, I know the capital can theoretically be invested in your company, but 16K is potentially a lot for a web business... Incidentally, I'm curious about the foreign company option. Any other Europeans want to comment on how that works out in your country? I'm vaguely curious if I could link one up in Europe with DedaSys LLC without spending a fortune in bureaucracy...
- Luc 17y ago
  I am glad you put "Europe" in quotes, because it's a diverse place etc.etc. That said, European unification has made possible a few new options for startup companies. There is now a 'European Limited Company' form, and it is also possible to register a company in any country from another country. For that last option the UK Ltd. route is very popular. Here in Belgium there are certain restrictions to starting up a limited company (minimum starting capital, diploma or experience needed, no bankruptcy in last 10 years etc.) which don't apply to UK limited companies. Apparently it's possible to start a UK limited company and conduct business in a different country, paying taxes in that country etc., as long as you have a return filed with Companies House and pay the yearly fee. EDIT: Just noticed the grandparent already mentioned this second option, oops.
17y ago

carbon8 17y ago

A series LLC is another option: http://en.wikipedia.org/wiki/Series_LLC http://en.wikipedia.org/wiki/Series_LLC

pageman 17y ago

is this the same as what was discussed here: http://farm4.static.flickr.com/3613/3324835985_f8339dd2cf.jpg http://farm4.static.flickr.com/3613/3324835985_f8339dd2cf.jp... here's the HN link: http://news.ycombinator.com/item?id=504151 http://news.ycombinator.com/item?id=504151