Frequently Asked Questions
You have questions, we have answers. Below you’ll find answers to some of our most commonly asked questions regarding business formation and starting a new business.
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What is a registered agent?
It is a mandatory “agent” of the corporation or LLC who is officially designated at the time that incorporation or registration documents are filed in accordance with state requirements. A registered agent is designated to be responsible for receiving and forwarding lawsuits and other critical legal and tax documents on behalf of the company.
Does the registered agent need to be a member of the LLC?
No, the registered agent does not need to be a member of the LLC, but must be an adult individual (or qualified commercial registered agent service), not the LLC itself, with a physical address in the state of filing.
Why are P.O. boxes not allowed?
A registered agent is responsible for receiving any legal papers on behalf of the LLC, and often legal documents must be hand delivered to a physical address and accepted by an individual. Therefore, almost all states require that the agent’s address be a street address where the agent is physically located during standard business hours.
Can the agent be in another state?
No, the registered agent must have a physical address in the state in which you are filing.
Does the registered agent need to be a principal or owner (e.g., director or officer or shareholder) of the corporation?
No, the registered agent does not need to be a principal or owner, but must be an adult individual (or qualified commercial registered agent service), not the corporation itself, with a physical address in the state of filing.
Can an entity act as its own registered agent?
Most businesses choose an independent third party to serve in this important capacity and with good reason. Business matters frequently take essential personnel out of the office. In the absence of a responsible employee, an organization might be at greater risk for a default judgment for failure to answer a complaint within a court-mandated response period. Additionally, the location of a principal office address may change from time to time. The maintenance of a constant registered office eliminates the costly requirement of changing the registered office location of the company with the state each time it relocates. Also, an independent registered agent affords an economical level of privacy to avert the need to deal with private process servers and/or the court appointed law enforcement personnel when served in front of employees and clientele at the office or neighbors at home.
What purpose does a registered agent serve?
A registered agent will act as the representative for accepting Service of Process served upon the company within the jurisdiction of any state where the company conducts business, and will also forward any other official legal and tax correspondence from the state.
What will happen if my company fails to register or designate and maintain a registered agent?
Failing to register and designate a registered agent may foreclose or hinder the company’s ability to legally enter into contracts and gain access to the state courts. Moreover, it may subject the company to monetary, civil, and possibly criminal sanctions. Also, failure to maintain a registered agent may cause your company to fall out of “good standing” within the state. This will subject your license to do business within a state to forfeiture, with monetary penalties assessed to reinstate your company to a “good standing” again.
What if I have an existing entity and someone else is currently serving as the registered agent?
If your entity is already in existence with another registered agent on file, in most states a “change-of-agent” filing must be submitted for you to change to another agent.
What is the change of agent filing?
When requesting registered agent services for an existing entity, the state will require a filing that notifies them of this change.
What is the duration of registered agent service?
It is an annual service, renewing automatically in the month when service was first initiated. Failure to renew registered agent service may result in an agent resignation filing and will ultimately effect good standing with the state(s) where registered to do business.
What is auto billing?
For your convenience, Launch by LegalShield will automatically renew your registered agent service annually. Eliminate the worry about remembering to renew your registered agent each year. Failure to renew may affect good standing with the state where registered to do business.
What is the cancellation policy for registered agent services?
In the event you wish to cancel your registered agent service, please reach out to your LegalShield provider law firm for next steps.
Why choose Launch by LegalShield for registered agent service?
Launch by LegalShield will receive and forward official state and federal correspondence as well as state franchise, tax returns or annual reports when received on your behalf.
Who counts as a "member" of an LLC?
A member of an LLC is listed in the company’s Articles of Organization and/or in an internal Operating Agreement. Members may include individuals, corporations, other LLCs and foreign entities. Most states also permit “single member” LLCs, those having only one owner. A member usually contributes financially or otherwise to the company, has voting rights and shares in the profit of the company.
Can we add or remove LLC members later?
LLC members can be added or removed later by a decision of the current members, usually by vote. This should be outlined in the LLC Operating Agreement (the internal governing document). When the business adds or removes members, the business must reflect this in the information sent to the state. Some people submit these changes in their annual report, but some submit an Article of Amendment to their Articles of Organization to the state. Launch by LegalShield can file Amendments and Annual Reports for your LLC.
How many members can an LLC have?
Most states have no limit on the number of members an LLC can have. Members may include individuals, corporations, other LLCs and foreign entities. Most states also permit “single member” LLCs or those having only one owner.
What is considered a Multimember LLC?
A Multimember LLC is when there are multiple partners forming an LLC.
What are the government filing fees?
These are state-dependent required government filing fees that Launch by LegalShield passes directly to the appropriate government agency.
What does the standard state filing fee mean?
These are state-dependent government filing fees that Launch by LegalShield passes directly to the appropriate government agency.
What does home state mean?
A corporation or LLC is considered to be domestic only in the state in which it was incorporated. This is considered the entities “home” state.
What is a foreign state?
In all states other than the home state, a company is regarded as a foreign corporation or foreign LLC. Please indicate for which state you want to operate your corporation or LLC as a foreign entity.
I do not know my home state entity filing date or filing number. Where can I find this information?
Generally, the entity filing number and the filing date can be found on original articles of incorporation/organization. If you are unable to locate your formation documents, we will research the state database to obtain the number on your behalf.
What are the state requirements for company names?
Naming rules for corporations and other business entities are state-dependent. Some words may be prohibited and some words may be required. For Profit Corporations, required company indicators generally include Inc., Corp., Incorporated, or variations thereof, as listed in the Designator dropdown menu. For Professional Corporations, different naming rules apply which also vary by state. Launch by LegalShield performs a preliminary name audit to ensure that corporate names meet state requirements.
How many directors should I have?
Corporations may have multiple directors. However, generally, states require corporations to have at least one director. Launch by LegalShield performs a preliminary order audit to ensure that specific state requirements are met.
What is the incorporator?
The incorporator is the person who signs the company’s Articles of Incorporation and brings the company into existence. For General For Profit Corporations, in most states Launch by LegalShield acts as the incorporator. For Professional Corporations, Launch by LegalShield cannot act as incorporator; therefore, you must provide the incorporator info as requested.
Can Launch by LegalShield act as incorporator?
Launch by LegalShield is able to act as incorporator in most states for General For Profit Corporation filings. However, in a few states − and in all states with regards to Professional Corporations — you must designate an individual to be the incorporator.
What is an S-Corp?
An S-Corp is the same as a C-Corp, except for the way it is taxed. An S-Corp is taxed similar to the way a Corporation is taxed, i.e., income taxes are reported and paid by the owners rather than the company itself. There are pros and cons to the S-Corp tax election, therefore, competent professional tax advice is strongly advised.
What is the deadline for selecting S Corporation status?
To qualify as an S Corporation in the present tax year, a “calendar year” corporation must timely file IRS Form 2553 with the IRS. If a corporation was in existence prior to the present tax year, then this filing must be submitted to the IRS on or before: March 15 of the present tax year. If the corporation is a “New Corporation”, then the S Corporation election may be submitted at any time during its tax year so long as the filing is made no later than 75 days after the corporation has begun any of the following activities (whichever is earliest): conducted business as a corporation, acquired assets or issued stock.
What is the difference between an S Corporation and a C Corporation?
An S Corporation begins its existence the same way that a C Corporation begins its existence, as a general, for-profit corporation upon filing the Articles of Incorporation at the state level. However, after the corporation has been formed, it may elect S Corporation status by submitting IRS form 2553 to the Internal Revenue Service (in some cases a state filing is required as well). Once this filing is complete, the corporation is taxed like a partnership or sole proprietorship rather than as a separate entity. Thus, the income is “passed-through” to the shareholders for purposes of computing tax liability. Therefore, a shareholder’s individual tax returns will report the income or loss generated by an S-corporation.
What factors are required for a corporation to qualify for S Corporation status?
The corporation must: Be filed as a U.S. corporation. Maintain only one class of stock. Maintain a maximum of 100 shareholders. Be comprised SOLELY of shareholders who are individuals, estates or certain qualified trusts, who consent in writing to the S Corporation election. NOT have a shareholder who is a non-resident alien. Failure to observe ANY of the above requirements could revoke S Corporation status at any time.
Who should elect S Corporation status?
Owners who want the limited liability of a corporation and the “pass-through” tax-treatment of a partnership will often make the S Corporation election. In most cases, corporations that would benefit from S Corporation status are those who plan on distributing the majority of earnings to its shareholders in the year those earnings are derived. Corporations who plan on retaining earnings for future investments in future tax years often choose the C Corporation because under the S Corporation, earnings will be taxed as if they were distributed to shareholders regardless of whether a distribution actually occurred or whether the corporation retained the earnings for future investment.
What are the S Corporation formalities?
An S Corporation follows the same state formalities as does a C corporation (i.e. filing Articles of Incorporation and paying state fees). However, an S Corporation must make a special tax election under sub-chapter S of the Internal Revenue Code by filing IRS Form 2553. In addition, certain states require that the corporation file an S Corporation Election at the state level as well.
Why do you need my Social Security number?
The IRS requires the Social Security numbers of all shareholders in order to file the necessary forms to establish an S-Corporation.
Do I need to list all shareholders?
You must list all of the shareholders of the corporation. In order to qualify as an S-Corporation there can be no more than 100 shareholders.
Why do you need to know my spouse's name?
This is to establish whether you and your spouse, if you are both shareholders, must be listed separately as shareholders or whether you can be listed together. This is required by the IRS.
Do I need a Federal Tax ID Number (EIN) for a DBA?
Legally, one is required to identify a business with one of two numbers: either a Social Security Number or an EIN (Employer Identification Number). If you are a sole proprietor, your Social Security Number can be used on all of your government forms and other official documents, but most small business advisors recommend that you apply for an EIN and use that number instead. If you are a corporation, LLC or other state-level entity, you must obtain an EIN because your business is an entirely separate legal entity.
What is a DBA?
DBA stands for “doing business as” and is an official and public registration of a business name. DBAs are also known as Fictitious Names, Fictitious Business Names, Assumed Names, and Trade Names. Essentially, a DBA is the name of a business other than the owner’s name or, in the case of a corporation, a name that is different from the legal or true corporate name as on file with the Secretary of State.
Do I need to file a DBA?
DBA registration may be necessary if your company conducts any business under a name other than your own name (for sole proprietors) or its legal name (for state-level entities such as corporations and LLCs). “Conducting business” can include marketing, advertising, letterhead, business cards, etc., in addition to actual business transactions. Also, banks may require a DBA registration in order to open a business bank account.
Where should I file my DBA?
DBAs can be filed at the state level and sometimes at the county level depending on the state. Generally, one should file a DBA in the state and/or county in which they are conducting business under the name. In addition, certain jurisdictions require publication of a DBA.
What is an example of a DBA?
For example, if Jane Brown and had a business called “Donuts Unlimited”, she would register the business as “Jane Brown” doing business as “Donuts Unlimited”. If a corporation was named “ABC ,Inc.,” and wanted to conduct business under the name “Express Cabinets”, they may register the business name as “ABC, Inc.,” doing business as “Express Cabinets”.
Does a DBA give a company liability protection?
DBAs do not offer liability protection. Typically, companies looking to get limited liability protection form either a corporation or LLC.
Are there any maintenance documents (such as annual reports) to maintain a DBA?
Generally, the only requirement to maintain an active DBA filing is to renew the filing when the expiration date approaches (usually five years, although durations vary by jurisdiction).
Does filing a DBA exclude others from using the same name?
Generally speaking, filing a DBA grants little, if any, exclusivity to use of the name. In many jurisdictions, more than one applicant can file the exact same DBA. The only way to legally ensure exclusive rights to the use of a name is to register a trademark.
Are name checks required for DBA filings?
Generally, some states allow more than one DBA for the same business name, in which case a name check is not required. However, other states will not file the same DBA for two separate owners – in those states, Launch by LegalShield will perform a name check prior to processing documents.
What is the difference between Launch by LegalShield obtaining the EIN and preparing the EIN?
If you ask Launch by LegalShield to PREPARE your EIN form, we will prepare the IRS form and include the completed form in your final package. Upon receipt, the person designated as the IRS contact must call the IRS to obtain the EIN. If you ask Launch by LegalShield to OBTAIN the EIN, a Launch by LegalShield representative will personally contact the IRS and obtain your EIN.
What is the purpose of an EIN?
An EIN is a federal tax ID number issued by the IRS to identify a business entity (similar to a Social Security number).
What is the difference between a tax ID and employer ID number? Are they the same as Federal ID number?
An EIN can be referred to by many names including EIN, Tax ID, Employer ID, and Federal ID number. They are just different terms for the same number.
Do I need an EIN?
An EIN is generally required when a company has employees, business operates as a corporation or a partnership. A business files any of these tax returns Employment, Excise or Alcohol, Tobacco and Firearms. A business withholds taxes on income, other than wages paid to a non-resident alien. A business has a Keogh plan A business is involved with any of the following types of organizations, Trusts, Estates, Real Estate, Mortgage investment, Conduits, Farmers, Co-operatives, Plan administrators.
Why do I have to give you my Social Security number to do this?
The IRS requires a Social Security number or a TIN (Taxpayer Identification Number) in order to obtain an EIN.
I already have an EIN for my sole proprietorship, do I need a new one for my new LLC/Corp.?
Generally, if a business incorporates then it will need a new EIN. In general, a sole proprietorship will also need a new one if it takes on partners or if a sole proprietor purchases or inherits an existing business.
Can I obtain my EIN now or do I have to wait until after the filing is completed?
Launch by LegalShield does not obtain an EIN until after the corporation or LLC is formed at the state.
Why do I need to wait until I am filed to obtain an EIN?
Waiting until a corporation or LLC is formed ensures that an EIN is not obtained for a business name that may not be available prior to filing.
Why do you need my legal name?
In order to obtain an EIN, the IRS requires that the name provided matches the name for the Social Security number exactly.
How long will it take to obtain an EIN number?
Generally, it takes about 3-5 business days to obtain an EIN. Our rush service can obtain an EIN in about 1-2 business days. In addition, all shipments are via priority shipping, for tracking purposes.
Who is the legal representative?
The legal representative is the person that will be the official contact person for the IRS. This will be the person the IRS will contact if they need more information or have questions concerning your filing.
What is the effect of a Withdrawal?
Filing a withdrawal will terminate the corporate existence in that state. It is important to note, however, that in most jurisdictions, the application for withdrawal is not considered complete until all required fees, penalties, and costs have been paid.
Why do you require my registered agent information for a withdrawal?
Generally, the Secretary of State requires listing the current registered agent information on the paperwork for the withdrawal.
What is the post withdrawal forwarding address used for?
Depending on the state, the Secretary of State may require an address where official correspondence can be forwarded after the withdrawal.
What is the LLC Seal/Embosser used for?
Some states require that entities comply with the formality of stamping all official documents with your corporate seal.
What is included on the LLC Seal/Embosser?
Your LLC embosser will display your company’s name, state of incorporation, and year of formation.
What does the LLC Seal/Embosser look like?
Launch by LegalShield provides you with a customized, hand-held, steel, LLC embosser.
If I have special instructions for my order, where can I put those?
Any special instructions regarding your order can be put in the comments section.
What if I want to change the name of my company?
The only way to change the legal name of a state-level entity such as a corporation or LLC is to file an amendment to the Articles of Incorporation/Organization.
How do I change the number, class, or par value, of shares that my corporation is authorized to issue?
In most states, the only way to change authorized share information is to file an amendment to the Articles of Incorporation.
What other information can I change by filing an amendment?
In addition to changing company name or authorized shares, the filing of Articles of Amendment can change the following information if desired: The name and address of the registered agent The principal office address The names and addresses of directors or members The description of business activities Any other information included in the Articles of Incorporation/Organization.
Does amending my name require a name check?
To make sure that your choice is available, Launch by LegalShield will conduct a preliminary, non-binding, name availability check before submitting your documents to the state office. It is important to note that the name you request is not final until your state officials approve. Never rely on a corporate name check until after you have received a copy of your amendment stamped with the state’s approval.
What is the legal plan and why is it included?
With a pre-paid legal plan, instead of paying a lawyer by the hour, you pay a small fee (starting at $24.95/month for personal and $49/month for small business) and get a variety of legal services. Services like consultation with a lawyer, document and contract review, debt collection letters and defense at trial are standard benefits.
Can I cancel the legal plan?
What if I already have a Personal or Business LegalShield membership? Is Launch included?
Launch is it’s own special service and is not included in any other LegalShield plan. However, if you purchase Launch, we’ll charge you the $149 now and suspend your normal monthly membership fee. Included in Launch is 3 months of a Personal Legal Plan with the Home Business Supplement. After the 3 months, monthly charges will begin.
What is a Provider Law Firm?
LegalShield has dedicated law firms that employ 1,900 lawyers in 49 states and four provinces in Canada, plus an additional 5,000 referral lawyers. The lawyers have been with their respective law firms for an average of 20 years and have a range of experience.
What law firm will provide my legal services?
LegalShield has arranged for you to have access to an accomplished law firm available to handle your legal needs. Law firms have been screened, are monitored daily, and are ready to handle your legal matters with the care and concern you deserve.
How do I contact my Provider Law Firm?
Members can call their law firm right from the LegalShield mobile app.
Will I work with the same lawyer for every legal matter?
LegalShield takes the selection of our Provider Law Firms very seriously. While you may not work with the same lawyer for every legal issue you have, you will work with the same Provider Law Firm, so you can be assured that you are receiving quality service with any of their lawyers.
What happens if my legal issue falls outside of my covered benefits?
You may continue to use your Provider Lawyer for legal situations that extend beyond plan coverage. The additional services are at least 25% off the law firm’s standard hourly rates. Your Provider Lawyer will let you know when the discount applies, and go over these fees with you.
What is LegalShield?
LegalShield has been providing legal service plans to North American families for over 40 years. Our customers can access legal counsel and advice from qualified lawyers simply by calling a toll-free number. Many other benefits are included, but even at the most basic level our plans allow you to have peace of mind.
Launch by LegalShield has a 100% Satisfaction Guarantee.
What is covered under a LegalShield legal plan?
Access a variety of legal services including: advice on unlimited issues, lawyer letters or calls made on your behalf, contract and document review (up to 15 pages each) and more. Review a plan contract for complete terms, coverage, amounts, conditions and exclusions.
How can I save money with a LegalShield membership?
The membership fee is significantly less than paying the standard hourly rate at a traditional law firm. Also, instead of ignoring a situation where you’ve been wronged, you can affordably and easily consult a lawyer.
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