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Wednesday, March 4, 2015

Starting an Online Business Part 3: Forming and LLC

If you've followed me since the beginning, I've taken you along on my online business adventure.  The latest episode took place just several days ago, where I let everyone know of my first business acquisition: socialboosterservicescom-deal-at-glance.  I explained to everyone how and where I bought this online business/site, and how it complimented my already established freelance activities with Common Core Money, the company.  Going back even further, for those just reaching this scene here called CCM Blog, in November of 2014, I shared how I was starting this company not even knowing what the hell to sell (product) to or do (service) for people: Building-online-business-my-blindfolded-steps.  But I want to make something clear to all of you who may want to follow in my footsteps.  This is not an "if you build it, they will come" story.  Don't be foolish.  You can't just whip up a business and expect there to be buyers.

As I mentioned in "Building an online business…," you need a customer already in place.  This is what I soon realized once I became the brand ambassador to Rich-uncles.com: If I don't start a business, Uncle Sam is gonna have his way with me.  The payment I receive for my services as an Advisor to the brand, Rich-Uncles, would be considered pure income with nothing to defend me from taxes.  Having read Kiyosaki's multiple books, I knew I needed to get the upper hand on the tax man, and reap the benefits of owning a business.  I did this by filing for a DBA (Doing Business As) at the county courthouse here in North County San Diego and opening a new business account at my bank, Wells Fargo.  Now at tax time I get to deduct all of my business expenses, like buying a new laptop, printer, etc.  

I could've stopped there, but then I'd have no legal protection.  I'm obviously doing a lot more now that just being Rich-Uncles' brand champion.  Now I'm freelancing as a brand and content service provider AND writing for pay at Elance.com.  Adding the social media marketing service to this mix meant that I have too much exposure.  I wouldn't like anyone coming after my personal assets for whatever reason.  Would you?  And vice versa.  Meaning, if I do something heinous, I would't want people coming after my livelihood, i.e, my business assets.  That is why it is important to establish some sort of corporate entity.  

I recently did this using Legal Zoom.  The process was easy and intuitive.  I chose Legal Zoom over a lawyer because using a lawyer would've put me out of too much mula.  I paid a little over $300 at LZ.  Now my personal assets are not up for grabs should anything Common Core Money does upset a person with a fat wallet, a lawyer, and time on their hands.  Speaking about the process at LZ, once you finish, you are sent an email like so: 

Dear Carlos,

Your order is complete and will be sent to you via UPS per your instruction. When you receive your documents, simply follow the easy, step-by-step directions.

Also, by forming your company using LegalZoom, you have access to special offers from our Small Business Resource Network partners. Use these valuable services to help start your business on the right track. 

I'm confident I will be able to follow all the post filing steps to ensure I'm kosher with the state of CA.  Can't wait to pay the $800 state franchise fee.  Whoopee!  More to deduct.  Okay I'm being facetious.  Since this was done, I have made sure to change all of my payment profiles and tax id information at sites that pay me.  Because CCM, LLC is a new entity, I had to go back to the IRS's website and apply for a new EIN (Employee Identification Number).  So going back to sites like Amazon, Google AdSense, Elance, ClickBank, and changing my 1099 profiles was an obvious step to do.  Intermixing your business account with a personal bank account are like cheating on your partner and hoping not to get caught.  You can take your chances, but don't act innocent when you get caught with your pants down.

Enough vulgar images for one night.  Talk to you later, my peeps!

For more info on LLC's go here: http://www.myllc.com/single-member-llc.aspx

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