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by Kevin Dangoor.
Original Post: Creating the LLC
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Creating an LLC or a small corporation is a very well-understood problem. If you're getting VC, you should be talking to a lawyer. If you're just bootstrapping your own business, you should check out Nolo. For anything you do that is standard, boilerplate kind of stuff, Nolo can save you a lot of money. They provide books and software on a whole bunch of topics, including forming an LLC or corporation. A lawyer may charge you $600 to form your company. An incorporation service may charge you $150. At Nolo, you can pick up a book for $30-40. They even have an LLC Maker software package that will create Articles of Organization and an Operating Agreement for you.
By the way, I know that using the Nolo products will take more of your time than just answering a couple of questions from your lawyer and having them do the rest. I also know that bootstrappers are strapped for time. However, we're also strapped for cash. Most good lawyers are going to bill at well over $100 an hour. Just as with programming tasks, estimate how long it will take and then choose the best of the two approaches.
The state of Michigan has a great website. You step through the items on the form and voila! You get a PDF of the form, filled out and ready to file. You can file by fax and have a response back in 2-3 days. In fact, if your state has something like Michigan's website, I wouldn't recommend getting Nolo's LLC Maker software, because some of the value is replaced by your state's free services. The Articles of Organization for an LLC are very easy. The Operating Agreement, which is often not filed with the state, has more detail and is especially critical if your organization has multiple owners. I'm sure you can find samples online, and there are samples in Nolo's books. Using Nolo's products and the spiffy Michigan website, setting up my LLC took just a couple of hours in total.
Nolo also offers a book that tells you how to maintain your LLC records and ensure that your business entity stays real in the eyes of the law.
Even if your needs are out of the ordinary, Nolo can save you some money by making you aware of the issues up front and giving you boilerplate to work with. You can always start with the boilerplate, add in notes of what you think needs to be different, and have your lawyer review that.
Nolo's website also offers a fair bit of free information. I've used Nolo products for a number of years now and have been happy with them. I'd be curious to hear of alternatives as well.
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