LLCs Are Beneficial for Tax Lien Business Investors – Corporations LLC

A lot of people are not aware that there are certain risks involved when investing in tax lien or foreclosed properties. They simply forget that they need to protect their other assets as well. If the intention is to do business then as an individual this is a dangerous thing to go into. What an investor can do is form a Limited Liability Company or LLC. With the formation of an LLC and placing the tax lien property business under this, the investor is protected especially his other assets.LLC Formation MythContrary to what people think, formation of an LLC is faster than other types of business organization. People also believe that an LLC formation will cost so much. This is completely the opposite. An LLC is the least expensive of business organization.Benefits of an LLCMembers of the LLC are provided with limited liability protection. What this means is that in the event debts or liabilities, they are not personal accountable. The personal assets of the members are not part of the LLC and thus cannot be sequestered should problems arise.
LLCs do not pay taxes like other business organizations.
Being part of an LLC shows that the investor is a “serious” business person thus credibility is higher than sole proprietors.
LLCs have fewer compliance requirements so establishing one is faster than a sole proprietorship or a corporation. LLCs also have less reporting requirements.
Corporations have controlled number of incorporators. For LLCs, organization is more flexible.Negative Side of an LLCAs in anything, there is always an opposite side. When organizing an LLC there is no getting away from expenses. There are initial fees. Most states also require an annual reporting fee.There are also mandatory reports to be filed yearly.Adding members or owners to the LLC is not as easy as in a corporation where shares can be sold to other people. There is also some difficulty when transferring ownership when it comes to LLCs. Thus it is important to be sure who to include as LLC members.LLC formation rules and regulations vary from state to state. It is vital to get a firm to give you guidance on this matter else you will be wasting time and money.Find a good real estate lawyer or firm to represent you especially when you are not from the state where you have tax lien properties.

Aged Shelf Corporation – What to Expect When You Purchase an Aged Shelf Corp? – Corporations LLC

Keep this in mind when buying a new or aged corporation or an LLC, you are buying an corporate asset that begins or continues to appreciate the day you start the business. Should you ever consider closing or selling your business, determine the value of the aged corporation in the selling price. Most owners totally forget about the corporate value that can be sold later as long as it has been maintained properly. There are plenty of buyers looking for good aged corporations.What you get when you purchase an Aged Shelf Corporation?To create a corporation, articles of incorporation must be filed with the Secretary of State or other appropriate state agency, bylaws and organizing resolutions. A corporation will need to apply for a tax identification number with the IRS.New or Aged corporations, LLC’s include:1. Articles of Incorporation2. Corporate By Laws3. Organization Resolutions4. IRS Form or Phone Number to file for your business EIN.5. Custom Stock Certificates6. Corporate Seal & Stamp7. Corporate Business Forms. This is not always the case.8. Corporate binder – This is not always the case.a. In most cases a nice corporate binder is included to keep your corporate records and documents organized.What is the Cost to purchase a New Corporation vs. an Aged?This really depends on the age of the corporation and assets attached to the corporation. If you are starting a new company with all of the above items your cost should be less than a $1000.00. Maintaining your business annually will cost approximately $1000.00. Check with your state & local agencies for accurate rates.In order to get funding and financing for a new company, you will need to prepare your business from the beginning to build a credit ready business. This takes time… at least 6- 9 months for a new business to start building good solid reporting trade lines. Most banks or lenders will turn you down for for credit until you have a minimum of 2 years history and reporting good credit trade lines with vendors.What is the cost to Purchase an Aged Corporation?In order maintain corporations, LLC’s in good standing with the Secretary of State and local agencies owners spend an average of approximately $1,000.00 per year to maintain plus the owners time creating the added value for the corporation. Add 20 to 30 % or more depending on other services.When calculating a sales price:1. Initial Cost of set up, then Multiply the age of the Corp or LLC X Years = Shelf Company price.2. Add additional fees for products or services included with the aged shelf corp.Value goes up based on the work the owners have put into developing the corporation for maintaining history and building credit readiness for the buyer.Aged Corporations example basic annual cost break down:Example Owner operates in California using a Delaware Corp.- Owners Accountants annual filling fee $150 – 250- Annual fee Delaware registered agent fee $60.00- Annual fee for California Registered Agent . $ 60.00- Annual Franchise fee for Delaware is based on a issued share price.- If filed as a foreign corporation to business in CA.- Requires Statement of information to be filed 25.00 filed annual.- Annual Franchise tax annual report minimum is $800.00Aged Corp’s additional fees that increase the value of the purchase price.- The age of the corporation is number one factor.- Location of the Corporation – Delaware is number 1 choice for business owners, with Nevada & Wyoming number 2, Aged Corp.- Checking accounts- Trade Credit Lines established for the company- Cash Trade lines for the company- Dun & Bradtreet Duns Number 75 or Higher with at least 4 trade lines- Additional Credit reporting agencies.What are the benefits of purchasing an aged corporation?- Established history for your business.- Wish to enhance your corporations’ image with age.- Want to build corporate credit, as it may be easier with age.- Want to encourage companies to do business with you. Some companies are more willing to do business with an established company vs. a younger company.- Wish to bid on a contract that requires your corporation to be established for a certain period of time.- Wish to obtain a bank loan. It may be easier if you can show you have history of being incorporated.- Would like to obtain corporate credit cards and leases.Make sure you have the service provider assist you with additional products and services you need otherwise you may be on your own.Have a Terrific Day & Good Luck with your business new or aged Corporation. Call should you need assistance.All Rights Reserved – Copyright 2008