Setting up a new business as LLC with partners in different state - Advice need

Discussion in 'Starting a Business' started by footballfangb, Nov 11, 2011.

  1. footballfangb

    footballfangb
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    I live in Minnesota and I have a friend that lives in WI. We are both interested in setting up a consulting business and have some clients that are ready to sign up? We were wondering how we setup this entity as he lives in a different state than I do. Along with this, I have plans to move to Chicago,IL in 6 months as that's where we want to setup our office finally and hire additional people, with him working remotely from WI.

    1.Should we set this up as LLC as our goal is to limit risk for us?
    2.If we set this up as LLC, what are all the steps we should do to deal with multiple states?
    3.How can we move the head office from Minnesota to Illinois and what do we have to do paperwork wise if we Minnesota as headquarters for 6 months right now?

    If there is an affordable expert(lawyers or similar resources) that you would recommend for us to use that can deal with these 3 states, please let us know aswell.

    Any advice from experts is greatly appreciated.
     
  2. Cobin H

    Cobin H
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    Definitely get a good written contract!
    Wouldn't hurt to LLC the company either as long as you can keep a good name for yourself. As far as website goes, I'm wanting to work with small business owners to get websites up and running to the public for I also want to build up a name for myself.
     
  3. ArcSine

    ArcSine
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    If you're planning on headquartering the business in IL, and you also figure that the majority of the employees will be IL residents, you could set up the LLC as an IL entity right from the start. There's no need that either you or your partner actually reside there now in order to do so.

    Check out this pamphlet from the Illinois Secretary of State for more info. Until you move there yourself, you'll probably need to find a party to act as a registered agent (see p. 4 of the booket). A Google for "registered agent in Illinois" will return a bunch of possibilities to research.

    Generally, you'll have to file a partnership tax return (LLC file returns as "partnerships") in each state in which the LLC conducts business. The good news is that multi-state filings are pretty commonplace, and most tax-preparer and CPA firms have experience in this area. When you're interviewing candidates to select an accounting firm / CPA firm / bookkeeper, just verify that the firm or individual has multi-state filing expertise. I doubt you'll find many who don't.

    Also check with the Secretary of State offices in MN and in WI to find out what, if any, documents you'll need to file in order for your IL LLC to conduct business within MN and WI. In the terminology frequently used in other states, your IL LLC will be a "foreign" LLC or entity with respect to MN and WI, and will probably need to obtain a "Certificate of Authority" to transact business there.

    All of this would be true no matter which state you choose to domicile your LLC in. If, say, you domiciled it in MN, then you'd probably need to obtain Certificates of Authority in both IL and WI.

    (Note: It looks like Wisconsin's SOS office has been budgeted down to a metal desk, a telephone, and a single file cabinet in the basement. You might need to go out to the Department of Financial Institutions link.)

    Best of luck with the new business!
     
  4. Hugo32

    Hugo32
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    Thanks for sharing this post with us. The post is really interesting. Keep posting the good work in future too.
     

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