Should Richard Keyt or LegalZoom Form My LLC? and more...


Should Richard Keyt or LegalZoom Form My LLC?

Question: People frequently ask me “why should I hire Richard Keyt to form my Arizona limited liability company rather than LegalZoom?

Answer: You should hire me, Arizona LLC attorney Richard Keyt, to form your AZ LLC instead of LegalZoom for the following major reasons:

  • I’m cheaper for comparable services – $75 cheaper as of 1/30/16 (see the table below).
  • I’m an Arizona attorney who has formed 4,900+ Arizona LLCs since I formed my first LLC in 1992.
  • I don’t require my clients to agree to disclaimers like the following found in bold text in LezalZoom’s “Terms of Service Agreement“:

I understand and agree that LegalZoom is not a law firm or an attorney, may not perform services performed by an attorney, and its forms or templates are not a substitute for the advice or services of an attorney. Rather, I am representing myself in this legal matter.”

Why would you hire a company that tells you it is “not a substitute for the advice or services of an attorney.”  That language should cause people to run away, run away.

  • Unlike LegalZoom I don’t require people who hire me to agree to be legally bound to the terms and conditions of six lengthy legal agreements.  LegalZoom requires its LLC customers to agree to 56 pages of legalese contained in the following six contracts:  (i) Terms of Use (13 pages), (ii) Terms of Service (10 pages), (iii) Supplemental Terms of Service for Corporate Center (7 pages) (iv) Supplemental Terms of Service for Advantage Subscriptions (8 pages), (v) Legal Plan Contract (7 pages), and (vi) Privacy Policy (7 pages).  As a contract attorney I am blown away by number and complexity of agreements required by LegalZoom.  Nobody should agree to be legally bound by any of these agreements without first having them reviewed by a contracts attorney, agreeing to all of the terms or modifying terms that are not acceptable.
  • My son Arizona LLC attorney and former CPA Richard C. Keyt (480-664-7472) and I (480-664-7478) answer LLC questions for free.  I don’t know if LegalZoom answers LLC questions, but if it does, do you really want a nameless LegalZoom sales rep with unknown AZ LLC experience to answer LLC questions?

See a summary of services for my three LLC formation packages and detailed contents of the Bronze ($397), Silver ($597) & Gold ($997) LLC Packages.

How to Hire Richard Keyt to Form Your Arizona LLC

See the two easy ways to hire Richard Keyt to form an AZ LLC.

For a service by service comparison read the table below.

LLC Formation ServiceRichard KeytLegalZoom
LLC Formation ServiceRichard KeytLegalZoom

LLC formation package as of 2/1/16

Silver $597 Standard $289

Fee to file the Articles of Organization with the ACC on an expedited basis

included

$85

Cost to publish the Notice of Publication in a newspaper

included

$50+

Statutory agent service for the first year. Arizona LLC law requires all AZ LLCs have a statutory agent.

included

$159

Obtain the LLC's federal employer identification number from the IRS

included

$79

Shipping

included

$10

Total cost to form an AZ LLC with similar formation services

$597

$672

Additional cost to hire LegalZoom to form your LLC

$75

Unlimited phone calls with an AZ LLC attorney who has formed 4,800+ LLCs to answer your LLC questions for free

no

Name selection advice from an AZ LLC attorney

no

Confirm LLC's name with Arizona Corporation Commission (ACC)

Prepare and file ACC's form Articles of Organization

not used

Prepare custom Attorney researched 4 page Articles of Organization with Springing Member & Noneconomic Member provisions and other provisions that tie into corresponding provisions in the Operating Agreement

no

Prepare a Notice of Publication required by AZ LLC law

no

Publish the Notice of Publication in an ACC approved newspaper in the appropriate county & deliver an Affidavit of Publication to the ACC

no

Custom 45 page Operating Agreement prepared by an AZ LLC attorney

no

Operating Agreement prepared by an unknown person

no

Arizona LLC Operations Manual, a 170 page book written by an Arizona LLC attorney who has formed 4,800+ AZ LLCs. We sell a pdf version of the Operations Manual for $97 in our online store.

no

LLC legal audit 60 days after forming the LLC

no

Storage of all LLC documents in Adobe pdf format in a secure folder using Citrix' Sharefile service.

no

The Operating Agreement and other LLC documents can be digitally signed

no

Checklist of 29 tasks that the LLC must accomplish in the first 75 days after formation and the deadline for performing each task

no

Membership certificates for each member

Worthless, but cool looking seal that has no legal significance under AZ LLC law that misleads people into thinking it has value

no

LLC portfolio that contains the LLC's formation documents organized behind tabs

The post Should Richard Keyt or LegalZoom Form My LLC? appeared first on Arizona Limited Liability Company Law.

    


Can I be the President of My LLC?

Question: I am the sole member of my Arizona limited liability company.  Can I tell the public that I am the President of my LLC?

Answer:  Yes, but I don’t recommend you use that term because some people may mistakenly think they are dealing with a corporation rather than an LLC.  Arizona LLC law refers only members and managers of an Arizona limited liability company.  The term “member” means a person or entity that holds an ownership interest in the LLC.  The term “manager” means a person or entity of a manager managed AZ LLC that is a manager of the LLC.  FYI:  If your Arizona LLC is member managed, then it does not have any managers.

Although the terms President, Vice President, Secretary and Treasurer are most commonly used when referring to officers of a corporation, an Arizona LLC could elect to use any or all of those terms when referring to people who are associated with the LLC.  If you own the LLC you can call people associated with the LLC anything you desire, but if the term is not member or manager it has no legal significance unless the term is defined.

If you insist on using a corporate term to describe somebody associated with your LLC I recommend that the LLC’s Operating Agreement specify the terms to be used and that it describe the duties and powers applicable to each position.  For example, if your Arizona LLC is manager managed and you want to call the manager the “President” of the LLC, add the following text to the LLC’s Operating Agreement:

The manager of this Company may be referred to as the Company’s President both internally and in matters dealing with the public.  The duties and powers of the President are identical to the duties and powers of the manager of this Company.

The post Can I be the President of My LLC? appeared first on Arizona Limited Liability Company Law.

    


Should I Create a C Corporation?

Question:  We discussed forming an LLC, but I’ve had some people recently tell me that I should create a C Corporation instead of an LLC. They said that the C Corporation gives the best tax advantages. I read on your website, that “Arizona recognizes that corporations may be formed for profit or not-for-profit, but not as C or S corporations.”   So maybe what I’m hearing from these other people is that they are in other states and their laws are different from Arizona law regarding C corporations?

Answer:   If a person tells  you that you should form a C corporation you should run away as fast as possible because that person doesn’t know what he or she is talking about.  No state in the U.S. has something called a C corporation.  All states have for profit corps and nonprofit corps.  The term C corporation refers to one of four methods of income tax under the Internal Revenue Code of 1986.  The person that says form a C corp or form an S corp is confusing the type of entity formed under state law with the method of federal income tax under the Internal Revenue Code.

There is something in the Internal Revenue Code called subchapter S, which provides for how an entity that elects to be taxed under subchapter S is taxed.  There is another subchapter called subchapter C, which provides how entities taxed under that chapter are taxed.

Before you form an entity the first question is what type of entity should you form under the law of a particular state.  The types of entities are LLCs, LPs, LLPs, LLLPs, general partnerships, for profit corps and nonprofit corps.  In Arizona, the LLC replaced the for profit corporation as the best entity to form.  For an in depth discussion of whether to form a corporation or a limited liability company in Arizona to operate a business see my article called, “LLCs vs. Corporations: Which Type of Arizona Entity Should You Form?

After you form the entity under the law of the chosen state the next question is how should the entity be taxed?  An LLC can be taxed as a C corporation under subchapter C by filing an IRS Form 8832 with the IRS.  When the LLC files the Form 8832 you can then say the LLC is taxed as a C corporation, but the entity remains an LLC.

To learn more about the four ways an LLC can be taxed read KEYTLaw attorney and former CPA Richard C. Keyt’s article called “How are LLCs Taxed?

The post Should I Create a C Corporation? appeared first on Arizona Limited Liability Company Law.

    


How Can I See If My Desired LLC Name is Available?

Question:  I intend to form a new Arizona limited liability company.  I know that the Arizona Corporation Commission will reject my Articles of Organization if my desired LLC name conflicts with the name of an existing Arizona entity or an Arizona tradename issued by the Arizona Secretary of State. How can I insure that my desired LLC name will not be rejected by the ACC?

Answer:  Actually, the latest version of the ACC’s online database has an easy to use name checker that will tell you if your desired name will be accepted or rejected.  Here’s how to check a prospective LLC name.

  • Go the the Arizona Corporation’s name checker website.
  • Click on the text that says “Name – Forms for entity name reservations.”
  • Click on the text that says “Check Entity Name Availability.”
  • Enter your desired LLC name in the Name field.
  • Click on the down icon to the right of the text that says “Select an Entity Type.”
  • Click on the letters “LLC.”
  • Click on Check Name.

The ACC’s database will then tell you the desired name is bad or it is available.

Name Reservation Warning:  Although the ACC’s database will ask if you want to reserve the name, I don’t recommend that you waste the $45 unless there is a lot of money riding on the name.  Before purchasing a name reservation ask yourself this question:  Given that the desired name has been available from the beginning of time up to the moment you checked the name, what are the chances somebody will use your desired name before you file your Articles of Organization?

The post How Can I See If My Desired LLC Name is Available? appeared first on Arizona Limited Liability Company Law.

    

KEYTLaw Clients Use RightSignature to Digitally Sign Contracts

KEYTLaw continues to use cutting edge technology that benefits our clients.  In addition to giving clients online access to their documents using the highly secure Citrix ShareFile cloud storage service we are now creating contracts that use the state of the art digital signing service called “RightSignature.”

Digitally signed documents are legally binding.  The United States has enacted laws that provide electronic contracts the same legal validity and enforceability as traditional pen-and-paper contracts. RightSignature is the trusted and secure solution for obtaining electronic signatures that fulfill key requirements of the Electronic Signatures in Global and National Commerce (E-SIGN) Act and the National Conference of Commissioners on Uniform State Laws’ Uniform Electronic Transactions Act (UETA). The world’s largest companies rely on RightSignature, and users have executed millions of contracts using RightSignature.

There is a significant movement toward signing legal documents electronically. You can sign legally binding contracts online and even from your phone. With RightSignature you can upload contracts and have them signed in a faster, cheaper, and more secure way than paper documents.

RightSignature makes signing the Operating Agreement of a multi-member LLC a piece of cake compared to the old fashion way of signing contracts.

The Old Fashioned Method of Signing Contracts

  • The member in charge of signing makes a copy of the Operating Agreement.
  • The member in charge gets all other members together to sign the Operating Agreement or circulates the Operating Agreement among the members for their signature.
  • The member in charge collects the fully signed Operating Agreement from the other members
  • The member in charge makes copies of the document and distributes a signed copy to all of the other members.
  • The member in charge saves the fully signed Operating Agreement in a safe place for future reference.

KEYTLaw’s New Technology Digital Signature Method of Signing Contracts

  • KEYTLaw emails to each member a RightSignature configured pdf version of the Operating Agreement.
  • Each member digitally signs the Operating Agreement and hits the reply icon to send the signed agreement back to RightSignature.
  • When all members have signed and returned their Operating Agreement to RightSignature, it automatically emails every member a message with the fully signed Operating Agreement attached.
  • RightSignature automatically uploads and saves the fully signed Operating Agreement to the LLC’s ShareFile folder and stores it online for future access, printing and downloading by all of the members of the LLC.

To learn more about our use of ShareFile for secure online document storage see “KEYTLaw Formed LLC’s Documents Stored in the Cloud.”

Purchasers of our Silver ($597) and Gold ($997) LLC Formation Packages receive our ShareFile cloud storage and digitally signed Operating Agreements.

Watch the 7 ways RightSignature documents can be digitally signed:

 

 

7 Ways to Sign Documents on RightSignature from RightSignature on Vimeo.

The post KEYTLaw Clients Use RightSignature to Digitally Sign Contracts appeared first on Arizona Limited Liability Company Law.

    

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