Protecting Your Home-Business With A LLC

Whether you are just starting your home-based business or have been operating as a sole proprietorship, you may be wondering about the benefits of protecting your business and personal assets by forming a limited liability company (LLC). Many business owners assume it will be too costly or time-consuming—but neither is the case.

There are many benefits in creating a limited liability company, especially when you weigh the risks that are associated operating as a sole proprietorship. Most home-based businesses operate as a sole proprietorship. When you operate your business in such a manner, the individual owner is assuming the risk of the operation of the business, and will be solely held responsible for the operations of the business. In other words, the individual owner of the company has little to no legal protection. Here are some of the benefits of forming a limited liability company.

Protected assets:
LLCs provide limited liability protection to their owners (members), who are typically not personally responsible for the business debts and liabilities of the LLC. Creditors cannot pursue the personal assets (house, savings accounts, etc.) of the owners to pay business debts. Conversely, in a sole proprietorship or general partnership, owners and the business are legally considered the same—leaving personal assets vulnerable.

Pass-through taxation:
LLCs typically do not pay taxes at the business level. Any business income or loss is "passed-through" to owners and reported on their personal income tax returns. Any tax due is paid at the individual level. This is a tremendous advantage for individuals who own a home-based business, because you will qualify for the tremendous tax advantages of operating a business from your home.

Heightened credibility
Forming an LLC will help your home-business establish credibility with potential customers, employees, vendors and partners because they see you have made a formal commitment to your business.

Limited compliance requirements:
LLCs face fewer state-imposed annual requirements and ongoing formalities than corporations.

Flexible management structure:
LLCs are free to establish any organizational structure agreed upon by the company owners. LLCs can be managed by the owners (members) or by managers, unlike corporations which have a board of directors who oversee the major business decisions of the company and officers who manage the day-to-day affairs.

Few restrictions:
There are few restrictions on who can be an LLC owner or how many owners an LLC may have (unlike S corporations).

In my opinion it makes sense to operate your business as a limited liability company. You have legal protection, tax advantages and the benefits of owning and operating your own home-based business, without personally assuming the risk. If you’re thinking of forming a limited liability company (LLC), be sure to understand what information will be required to legally create an LLC. The formation document for an LLC is called the Articles of Organization or Certificate of Organization. Each state has its own version, so the amount and type of information required varies.

Forming a limited liability company (LLC) can be complicated if you don’t know what you are doing. While there are online services that can help you form the LLC, most are impersonal and overpriced. The most popular website is legalzoom.com, and they charge $149 - $359 + the filing fee for the state in which you wish to form the LLC. You also have the option of having an attorney draft and file the necessary paperwork to form your LLC. However, generally the legal expenses associated with the formation are $500 or more.

I believe that forming a LLC is a valuable advantage for those who are currently operating, or are considering starting a home-based business. I have over 10 years in the network marketing industry, and I desire success for everyone who starts a home-based business, regardless of the business opportunity that you’ve chosen.

The other night, I was in bed and an idea came to my head. In an effort to help as many people as possible, I’ve decided allow the consulting division of my company, to form LLCs for home-based businesses. We will provide this service for only $99.95 + the filing fee for the state in which you wish to organize your LLC. My staff will search the business registration directory of your state to make sure that your business name is available. Once a business name as been chosen they will draft the “Articles of Organization” to form your LLC as well as an “Operating Agreement” which will be required to explain the rights and responsibilities of the owners of the LLC. It will also indemnify you and protect you from personal liability when you are acting on the behalf of your business. Lastly, my staff will assist you in filing the necessary documents with the IRS and obtaining a federal employee identification number (EIN).

After the necessary documents are completed my staff will file them with the required state agency and your LLC will be operational. In addition to all of these services you will receive personal access to me during normal business hours for any related questions concerning the formation of your limited liability company.

If you would like to take advantage of this offer please email llc@networkinglifestyles.net. Please provide your name and phone number in the email. A member of my staff will contact you concerning the steps required to complete the formation of your LLC. If you have additional questions before you commit to forming a limited liability company you should email llcquestion@mypersonalattorney.com.

FTC Amends Free Credit Reports Rule

Did you know that on April 2, 2010, a new amendment to the 2003 Free Annual File Disclosures Rule goes into effect?
This new rule by the Federal Trade Commission (FTC) will require new disclosures to help consumers avoid confusing “free” offers – which often attempt to lure you into spending money on credit monitoring or other products or services – with the free credit reports available at anualcreditreport.com, the only authorized “central source” for truly free credit reports.

Highlights of this new rule

Web sites offering free credit reports will be required to provide the following disclosure at the top of each Web page: THIS NOTICE IS REQUIRED BY LAW. Read more at FTC.GOV. You have the right to a free credit report from AnnualCreditReport.com or 877-322-8228, the ONLY authorized source under federal law.

Web site disclosures must also include a button indicating “Take me to the authorized source” with clickable links to www.annualcreditreport.com and FTC.GOV.

For consumers visiting the AnnualCreditReport.com site, the three national credit bureaus – Equifax, Experian, and TransUnion -- will no longer be able to advertise on the home page. Such ads can only appear after the consumer has successfully obtained their free credit report from AnnualCreditReport.com.

Similar disclosures for television and radio advertisements will take effect on September 1, 2010.

What do you think?

Is such a rule necessary to protect consumers?
Should the government stay away from such regulations and let the “buyer beware”?
Have you ever been confused by a “free credit report” advertisement?
Do you agree or disagree with the many State Attorneys General who believe that an AnnualCreditReport.com should be a .gov instead of .com?

Please take the survey on this blog and let me know what you think!

FTC Links:
File a complaint with the FTC
FTC Amends Free Credit Reports Rule To Help Consumers Steer Clear of ‘Free’ Offers that Cost Money
Free Annual Credit Reports

As always, please share your opinions with me! I need your feedback in order to make this blog better and provide you the information that you want and need! Please also consider subscribing! You can also follow me at any of the links below.

Make it a great day!

Dustin Mitchell

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The Principle-Driven Life

I'm convinced that much of the frustration and lack of achievement in life comes from fuzzy thinking about our core principles and our first priorities.

This week I read a little manifesto by author and conservative talk-radio personality, Mark R. Levin. The book, Liberty and Tyranny, criticizes Barack Obama from a conservative point of view and offers alternatives Levin believes would work better. TIPS isn't about politics and I'm not going into it here, but his argument that policies and action must be based upon principle did ring a bell for me.

Very few of us routinely re-examine our core beliefs or write down the principles that guide our lives. Think about it for a moment. How often are you challenged to explain your guiding principles? How often do you write out your basic beliefs, or explain them to a friend or loved one? How often do we even think about where we're going in life or what we absolutely, positively stand for?

My grandmother used to say that if we "don't stand for something, we'll fall for anything." I think she was right. It's vital not only to "do" stuff--our world encourages lots of work, busy-ness and activity!--but to think clearly about what it all means.

It's long been known that under stress we all have a tendency to narrow our focus until we miss even the most essential things in life. When distracted and stressed by a small glitch or anomaly, airline pilots have even forgotten to lower their landing gear! Perhaps a more common example is being so busy we forget to eat lunch or being so stressed we forget to tell our children we love them. How much easier is it to compromise our basic principles in the push to make a sale?

Too often we "major in minor things" or as my friend, Michael Angier says, we "get lost in the thick of thin things." I love that phrase and hate the results!

In a world filled with hundreds of requests to spend our time, our money, our energy and our talents on other people's preferences, it is vital that we stay anchored and focused on the life we choose. I love the story that on a particularly hectic day Mahatma Gandhi once said, "I have so much to do today that I must spend twice as much time in meditation." I think he understood something we often miss.

Here are some steps that can help:

1. Define your fundamentals. If you haven't done so in a while, take time to affirm the things you know to be true. If you have a particular religious faith, what are it's core tenants? How do you see the world and your place in it? What would you fight for? What would you die to defend or stand up for at all costs? Know your fundamentals, the principles that guide your life.

2. Review them with a friend or loved one. At least once a quarter, explain your principles to a skilled listener. Invite a friendly, respectful and compassionate debate. Test your beliefs to see if they stand up to questions and if you can defend them reasonably and clearly. If you can't explain them to a child, perhaps you don't understand them as well as you think you do.

3. Keep a daily journal. (I recommend livejournal.com.) I'm a huge fan of writing out our core principles as often as possible. It need not be lengthy or elaborate, but periodically take note of what you believe and how you live it in your daily life. Note where you've gone astray or violated a core value. Be honest with yourself and get back on track as soon as possible. I think it helps.

4. Match your schedule to your values. Periodically review your schedule, your checkbook and your commitments to see if they reflect your principles. Do your core values show up in the time you spend with your family? Do they show up in how you spend money and in the commitments you make to your work? If not, you want to quickly notice when you are off course, while minor adjustments are still possible.

For thousands of years, sailors have known the value of keeping an eye on the north star. They keep their hands on the tiller and check their course often. In modern life, we are rarely encouraged to do the same and it's easy to be led astray. We get so busy with our daily tasks that we easily lose our way. Don't let that happen to you! Know your guiding principles and stick to them.