Hi, this is Lee Philips.
I'm an attorney.
I've done hundreds and hundreds of LLCs and corporations
in my career.
In fact, we're a litigating firm.
We sue corporations and LLCs.
And the funny thing is, when you sue them,
you figure out how to pierce the corporate veil.
You figure out how to go after the guys.
And every once in a while, maybe 5% or 6% of the time,
you get a guy who the judge won't set aside
his corporation.
He won't set aside his LLC.
And you study what that guy does.
Let me talk to you about forming and LLC for two seconds.
First of all, you got to file with the state.
And I've developed a series of six courses
to teach you exactly what to do in forming and operating
in an LLC.
You got to file with the state.
And that's what the internet site is going to do.
It's going to get that piece of paper from the state.
They're going to help you fill it out,
and they're going to file with the state.
That's what most lawyers do for you.
You pay your 500 bucks, your 1,000 bucks, whatever it is.
They file a piece of paper with the state.
And they give you a bunch of other papers.
A lot of the internet sites upsell you on the other papers.
But everybody files with the state.
Fine.
You file with the state, they pay the state fee.
By the way, when you're doing the state filings,
don't give them any more information
than you absolutely have to because that's
public information.
File with the state, pay the fee.
You're an LLC, end of discussion.
But that doesn't tell me whether the LLC is going to give you
any tax advantages, or whether it's going to give you
the asset protection you want.
That's different than filing with the state,
has nothing to do with that.
Oh, oh-- you got to file with the state, firstly.
Pay the fees.
Then you need to design an operating agreement.
This is the guts of your LLC.
This is your operating manual.
How are you going to operate this company?
When you get into court, the judge
says, how are you operating this.
Prove to me this is a real company.
How are you operating this as a company?
He's going to want to see-- the other lawyer is
going to want to see, your operating agreement.
If it's not well enough defined, or if you haven't
been following what's outlined in that operating agreement,
you're toast.
They pierce the corporate veil, they come after you personally.
And that happens to be the case in about 90% of the cases.
When an LLC actually gets sued, 90% of the cases we can go in
as litigators, I know this.
We can go in, we can pierce the corporate veil.
We can come after the guy individually.
Is that really what you want?
So the operating agreement is critical.
And by the way, I've got an excellent--
it's a free template.
If you're going to do it, at least use the free template
and get a good operating agreement, instead of
a two- or five-page one.
This is a long one, but it defines everything.
Once you've got the operating agreement,
then you need to make some tax decisions.
Nobody ever talks to you about the tax decisions.
You going to have this taxed as a sole proprietorship,
disregarded entity, partnership, S-corp, C-corp?
How are you going to have it taxed?
How you have it taxed makes a difference
as to how much money you take home-- how much money you get
to spend out of this company.
And it depends upon what the company is doing.
Am I manufacturing things?
Am I renting real estate?
I might want a different tax form, or tax structure,
for those two different types of income sources.
So we get it taxed.
Then we've got to follow the formalities,
because when we get into court, we've got to prove to the judge
that we followed the operating agreement, that we did all
the formalities that we were supposed to do in order
to treat this as a company.
No treat like company, then you don't
get to have the protection of the court.
It's that easy.
So you want to be able to go to the judge
and say, we're operating this as an LLC, a full-time company.
I'm going to walk you through the formalities there.
Then I'm going to give you some tax treatment.
Actually, some tax tricks is what we're going to do.
Because if you know the tricks, well, the rich.
If you want to be wealthy, use the laws that the wealthy use.
They use a different set of laws than everybody else.
The LLC gives you the ability to access those laws.
But you've got to learn how to use them.
And by the way, your accountant isn't
going to teach all of this.
The reason is, everybody says he doesn't know.
No, he knows.
Well, he makes more money.
Yeah, he makes more money.
He likes that.
More work, a little more work, not a lot more money.
But you could make a lot more money.
And the accountant isn't going to tell you
because, if anything goes wrong, it's the accountant's fault.
He's liable.
He's learned to keep his mouth shut.
The lawyers keep their mouth shut.
But if you walk into them and say,
hey, why don't we do this tax thing?
They're going to look at you and say, wow,
you're smarter than you look.
This is a great idea.
At that point, though, it's your idea.
They will help you.
They will support you.
But they will not give you the ideas.
So we got to get the tax treatment.
Then there are lots of little things
that we can do with an LLC-- little things like give you
twice the asset protection.
I going to go in, I'm going to teach you
about doubling the asset protection of a corporation.
An LLC can give you twice as much asset protection
as a corporation.
Nobody ever talked to you about that.
I'm going to sit you down in one of the courses,
and I'm going to talk to you.
But at least go, follow the link get the free operating
agreement.
If you've already got an LLC, fine.
Compare it to what you've got.
You can go back and amend it.
If you don't have an operating agreement, at a minimum
use that one.
And let's go one step further and customize it for you.
This is Lee Phillips.
Your LLC is an important part of your success.
But it isn't just a piece of paper
that you put in the filing cabinet
and you forget about forever.
You've got to operate it.