Herding Pixels » business http://herdingpixels.com Sat, 17 Apr 2010 21:45:51 +0000 http://wordpress.org/?v=2.9.2 en hourly 1 Setting up a Texas LLC for Web Professionals http://herdingpixels.com/setting-up-a-texas-llc-for-web-professionals/ http://herdingpixels.com/setting-up-a-texas-llc-for-web-professionals/#comments Sat, 17 Apr 2010 21:32:08 +0000 herdingpixels http://herdingpixels.com/?p=46 Disclaimer: I have to say up front that absolutely nothing here should be construed as legal advice. For specific advice you should go contact a lawyer.

I’ve been freelancing now for about 5 months. Legally, I’ve been considered a sole proprietership. What finally convinced me to file for an LLC was the prospect of bringing on subcontractors.

One of the protections an LLC gives you is a buffer against liability. That’s never been an issue in my business so far but I felt that with the expanding business, the time was right.

I set up an LLC in the state of Texas. The filing cost is $300 and it takes about 3-6 business days (faster if you expedite it). You can hire a service to do this for you, but honestly, it’s easy enough that you should just do it yourself.

This info pertains specifically to my experience filing in Texas, and every state has its own laws but the general outline should be similar.

Name Check

Before you file, you obviously need a name. You want a name that’s easy to remember and easy to spell. And of course, as a web professional, you should select a name that’s available. Once you’ve picked a name you like, you have to do a name check for it to see if it’s available. If there’s a company doing business in your state that has a reasonably similar name to yours, you’ll be denied.

Don’t use a name check service, paid or free. I used a free service to search for my name only to discover after submitting that the name was too similar to someone else. You can just email the state directly at corpinfo@sos.state.tx.us for a preliminary name check.

Form 205

Once you get the preliminary all clear, you’ll need to fill out this form 205 (remember, this is specific to Texas – check on the rules for your own state). The form is fairly straight forward, but here’s some specific points:

Registered Agent

A registered agent is a person or a company who will receive on your behalf any legal documents pertaining to your company. The registered agent can be you, but I think there are some advantages involved in hiring a third party company. A registered agent must make themselves available during working hours to receive legal documents; if you act as your own registered agent and you go on vacation and miss a lawsuit, you’ll be the one responsible. That would suck. I used Incorp for $99 a year, and I think it’s a solid deal.

Additionally, using a company will allow you to change your company’s physical address without extra filing charges with the state. And if you do business in multiple states, a registered agent company can sometimes offer their services in multiple states.

Managers

As the founder of the LLC, you can elect to have other people run the company for you. You probably don’t want this if you’re setting up a single person LLC for yourself; so you’ll likely want to have no managers. List yourself, and check B.

And that’s about it. Send your paperwork along to the state and you’re done!

For me, personally, filing for my LLC felt a lot better then I thought it would. While nothing much has changed in the day to day workings of my business, my overall outlook as to its future has become a tad more serious; instead of considering the possibility that I could return to a job, now I’m pretty much committed to making this thing work. If you’re serious about making your freelance business a profitable and permanent chunk of your life, I’d recommend going for it.

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