By: John Wait
If you are going to form a limited liability company, I highly recommend that you use an attorney because only an attorney can:
- Advise you on whether you even need an LLC
- Inform you on how to correctly operate your LLC
- Guide you on what documents you will need
Online service providers like LegalZoom charge you for paperwork that can be found online for free. All the paperwork you need to form an LLC can be found on the North Carolina Secretary of State’s website. Instead of wasting money to buy forms that are otherwise free, I believe it is better to spend that money on sound advice. I have helped many people set up their LLC’s, and I have yet to meet with anyone who thought the meeting was not worth the investment.
The most important aspect of having an attorney help you is getting guidance on how to operate your LLC, because all the paperwork in the world will not save you if you have neglected to follow the basic corporate formalities required by law. If you mismanage your LLC, it will offer you no protection from lawsuits, creditors, or the IRS. I focus my client sessions on the issues that matter and give sound legal advice. This is something only an attorney can do.
As to whether you should form an LLC at all, consider the following:
TAXES. Forming your own LLC to receive your commissions or fees can have certain tax advantages, but be sure to talk to a CPA or an accountant to make sure that your business will benefit by setting up a corporation. LLC’s in some circumstances can significantly reduce your tax liability.
PROTECTION. If you are a real estate agent, whether a solo or part of a large firm, you are probably an independent contractor and not an employee. This means that if something goes wrong in a real estate transaction you are working on, you can be sued. If you do not operate as a separate corporate entity, your personal assets could be on the line. Creating an LLC and having an attorney advise you on how to run it is a relatively inexpensive and important insurance policy.
At Martin & Gifford, you get the added benefit of getting your advice from attorneys dedicated to servicing the real estate industry. By focusing our practice, we can offer you the most comprehensive advice available. If you are thinking of forming an LLC for your real estate business, give us a call.