Attorney or CPA for forming LLC

[Ye Tun Aung]

Who should I use for forming LLC? Attorney or CPA?

Any recommended Attorney or CPA around Los Angeles area? 

Thanks,

[Basit Siddiqi]

Attorney's should help set up entities.

[Sean O'Keefe]

You can use an entity creation platform like Zenbusiness or Legalzoom to incorporate but you'll want to make sure you understand best tax / legal structure before you use one of these platforms to create an entity. CPAs and Attorney's can help with this. 

[Scott Mac]

You might want to speak to your tax person about what would be the most beneficial way to set up tax wise before you have the attorney do the setup. This may be a single member or a multi member LLC.

Additionally, if you are in California or have what is known as NEXUS to California in any way, you may wish to ask your tax person what other options than an LLC might work for you tax wise.

Once you are comfortable with the knowledge of the LLC from a tax standpoint, then you might want to talk to your attorney and see if that set up is good for you from a legal standpoint.

Depending on what you want to accomplish as far as asset protection or just general business operation.

If the attorney recommends a set up that involves more than one LLC, get on the phone with your tax person and find out how much that is going to cost you for the tax returns, K 1 forms, payroll processing, etc...

That will allow you to make a more informed decision about how you want to have the LLC set up for your unique situation.

Realize also you have ongoing costs for each LLC that you set up, Yearly resident agent fees, possibly fees to have your meeting minutes prepared on a yearly basis, Tax preparation fees for each LLC Shell, and You're 1040, etc...

There will also be accounting/bookkeeping that will need to be done for the LLC, you may have to pay for that also, as well as a corporate kit.

Or You could wing it and try and do it yourself, if you think you know enough to make a good decision without expert help.

Good Luck!

[Sean O'Keefe]

Quote from @Scott Mac:

You might want to speak to your tax person about what would be the most beneficial way to set up tax wise before you have the attorney do the setup. This may be a single member or a multi member LLC.

Additionally, if you are in California or have what is known as NEXUS to California in any way, you may wish to ask your tax person what other options than an LLC might work for you tax wise.

Once you are comfortable with the knowledge of the LLC from a tax standpoint, then you might want to talk to your attorney and see if that set up is good for you from a legal standpoint.

Depending on what you want to accomplish as far as asset protection or just general business operation.

If the attorney recommends a set up that involves more than one LLC, get on the phone with your tax person and find out how much that is going to cost you for the tax returns, K 1 forms, payroll processing, etc...

That will allow you to make a more informed decision about how you want to have the LLC set up for your unique situation.

Realize also you have ongoing costs for each LLC that you set up, Yearly resident agent fees, possibly fees to have your meeting minutes prepared on a yearly basis, Tax preparation fees for each LLC Shell, and You're 1040, etc...

There will also be accounting/bookkeeping that will need to be done for the LLC, you may have to pay for that also, as well as a corporate kit.

Or You could wing it and try and do it yourself, if you think you know enough to make a good decision without expert help.

Good Luck!

Yes, if you have an LLC in California it is more complex then most other States. 

[Zachary Jensen]

Quote from @Ye Tun Aung:

Who should I use for forming LLC? Attorney or CPA?

Any recommended Attorney or CPA around Los Angeles area? 

Thanks,

 I would work with an accountant that offers this to clients of theirs. That usually gets you the best pricing and most applicable entity for your business and overall situation. They can also help guide you if it is even worth it or not. If you just go to a lawyer, they will always push for the thing that gets them the most billable hours 

[Stuart Udis]

@Zachary Jensen That’s a bold statement…. Are you suggesting accountants never bill hourly or over sell clients on services? Wouldn't you say accountants have more to gain year after year with tax return prep if their clients were to have numerous entities requiring business returns to be prepared…..I am not suggesting  there aren't attorneys out there who upsell services. In fact  there's a company that markets quite heavily on this BP that sells uneducated investors formation packages that are completely impractical and unnecessary but there are plenty of accountants out there who do the same.  

Getting back to the original posters question an attorney should be drafting the operating agreement but its beneficial to have an accountant weigh in on tax matters. At the end of the day it should be a collaborative approach. 

[Zachary Jensen]

Quote from @Stuart Udis:

@Zachary Jensen That’s a bold statement…. Are you suggesting accountants never bill hourly or over sell clients on services? Wouldn't you say accountants have more to gain year after year with tax return prep if their clients were to have numerous entities requiring business returns to be prepared…..I am not suggesting  there aren't attorneys out there who upsell services. In fact  there's a company that markets quite heavily on this BP that sells uneducated investors formation packages that are completely impractical and unnecessary but there are plenty of accountants out there who do the same.  

Getting back to the original posters question an attorney should be drafting the operating agreement but its beneficial to have an accountant weigh in on tax matters. At the end of the day it should be a collaborative approach. 

My favorite Charlie Munger paraphrased: "Show me the incentive and I'll show you the behavior". I would say accountants have to gain here as well, I would add the entity doesn't result in better tax treatment, ideally, it is not done (in general). The benefit is very clear and tangible. Having some complex legal structure where only the lawyer can explain why its good can leave folks wondering if there is value there at all. That is just my experience! 

[Katie Balatbat]

@Ye Tun Aung

Typically, formation of a business entity is in the realm of attorney work, and though some CPAs will handle it, it probably falls under the "unauthorized practice of law," at least in CA, which carries possible heavy penalties with it.  A business or some estate planning attorneys may be able to assist you.

CPAs tend to be best for consulting with the tax and numerical implications as to how it can affect your bottom line, and consulting as to the structure and right type of entity for you.  Attorneys tend to be bigger picture, including legal rights, asset protection, how it fits with your estate plan and general goals, etc.  Usually the CPA and attorney will work hand-in-hand.

I can give you names for either in the San Diego area if you're interested; just send me a message if you would like more info.

*This post does not create an attorney-client or CPA-client relationship.  The information contained in this post is not to be relied upon.  Readers are advised to seek professional advice.

[Tanner Lewis]

I would have both parties involved, especially if it is a complicated nesting structure. 

[Bob Stevens]

Quote from @Ye Tun Aung:

Who should I use for forming LLC? Attorney or CPA?

Any recommended Attorney or CPA around Los Angeles area? 

Thanks,

 Do you have a deal ?