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Starting a Small Business/Determining Business Type to Register As

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Question
Mr. Staub,

I am wanting to register my professional face and body painting business and I have been told that it is wisest to establish it as an LLC, but I wanted to check with a professional before doing so.  I like that it protects me in the event that something were to go wrong, but I'm not sure if an LLC is the appropriate type of emtity undr which to develop my business.  We are not just a typical face painting setup - we are professional artists who will eventually be selling merchandise as well as services, we will keep a stable of artists for booking at various events, seminars, classes and workshops and will be doing more upscale work (fashion shows, photo shoots, etc.) as opposed to children's birthday parties and such.

Also, I've looked into starting my company using LegalZoom.com and in the process of creating an LLC, they mention the necessity of selecting a "registered agent" and that it is required by law to have one.  What is a registered agent, what do they do that I cannot and where would I find one?

Thak you for your time and advice.

Respectfully,
John

Answer
Without knowing more, it is impossible to say positively that an LLC is the best choice for your specific needs, but an LLC offers the advantages of limited liability and no income tax at the entity level. For most small businesses, an LLC is a very good choice. Nothing you have said about your business would lead me to believe that the answer would be any different in your case.

As for your question about a registered agent, the answer is that every business entity must have a registered agent.  The registered agent is simply someone who can receive notices from the state and, in the event that the entity is sued, can be served with a summons and complaint. You don't need to pay someone else to be the registered agent for your LLC, you can be the LLC's registered agent. In other words, companies that provide registered agent services don't do anything that you can't do yourself. In fact, if your entity never gets sued, the registered agent typically serves no function other than to forward mail that the Secretary of State would have otherwise sent to you directly.  If you do get sued, the other party to the lawsuit may choose to serve its legal papers on the registered agent rather than serve you personally, although it is not obligated to serve the registered agent writer than serve the company directly.

I hope this helps.

Starting a Small Business

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David K. Staub

Expertise

I am a business and tax attorney and have spent more than 35 years assisting people in starting a wide variety of businesses. I can answer questions about the basic differences between the various entities available to new businesses, including limited liability companies, corporations, S corporations and partnerships. I can provide guidance in other areas facing start ups, such as hiring employees, signing contracts and obtaining necessary licenses. I can also direct people to sources for answers to specific legal questions which cannot be answered in a forum of this nature.

Experience

I have an extensive practice in the mergers and acquisitions area and have been involved in the tax and legal issues on hundreds of business transactions.

Website
Staub Anderson LLC
Illinois business attorneys

Practice Areas
Business Organizations
-Corporations

-LLCs
-Partnerships

-Joint ventures
Mergers & Acquisitions
-Buying/selling business
Securities Law
Tax Law
Technology Law
-Software licenses
-Development agreements

Trademarks

Organizations
Illinois State Bar Association; Chicago Bar Association (former Chairman of the Corporation & Business Law Committee and former Chairman of the Mergers and Acquisitions Subcommittee; former Executive Committee member, Federal Tax Committee and Chairman of subcommittee on general tax issues); Keystone Foundation (Trustee); Association for Corporate Growth; Midwest Entrepreneur Forum; Midwest Association of Alpha Delta Phi

Publications
Commerce Magazine; YLS Journal; ISBA Section of Taxation Newsletter

Education/Credentials
Harvard Law School, J.D., 1977; University of Illinois, B.S. in Accounting, with highest honors, 1974

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