Cost to incorporate LLC via attorney vs. online

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Cost to incorporate LLC via attorney vs. online

Michael Andrews
Eau Claire, WI · Member since 2017 · 39 posts · 3 votes

I am in the process of getting my real estate investment LLC off the ground and after meeting with an attorney and comparing costs to an online solution like Legal Zoom I am wondering if there is a benefit to one or the other. The attorney mentioned that she would draft the operating agreement to protect my initial investment from future marital disputes (currently single) as the funding for the startup is coming from an inheritance. She has advised me that if I were to get married some day down the road and potentially get divorced the capital invested in the business could be kept safe from the 50/50 marital property laws in Wisconsin if she drafts the operating agreement. To form the LLC with all applicable filings and an EIN she quoted me $800-$900.

I know I could use Legal Zoom or similar and get this done with boilerplate language for much less than this, so I am wondering if she has a point in trying to protect my investment down the road or if she's offering something overpriced and unnecessary.

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Bob Okenwa
Real Estate Agent/Investor · Peoria, AZ · Member since 2016 · 2k+ posts · 2k+ votes
8y

You can file the LLC yourself through the Secretary of State website for free outside of the initial filing fees with the state. It's $135 for the filing fee and $25 a year for the annual fee. As far as the other costs go and operating agreement, I'd get a 2nd and/or 3rd opinion from other attorneys and stay away from LegalZoom as they are more cookie cutter and your situation sounds to be more unique than anything they'd cover. Also, getting an EIN from the IRS costs $0. It takes like 5 minutes through their site.

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  • Bob Okenwa
    Real Estate Agent/Investor · Peoria, AZ · Member since 2016 · 2k+ posts · 2k+ votes
    8y

    You can file the LLC yourself through the Secretary of State website for free outside of the initial filing fees with the state. It's $135 for the filing fee and $25 a year for the annual fee. As far as the other costs go and operating agreement, I'd get a 2nd and/or 3rd opinion from other attorneys and stay away from LegalZoom as they are more cookie cutter and your situation sounds to be more unique than anything they'd cover. Also, getting an EIN from the IRS costs $0. It takes like 5 minutes through their site.

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  • Tom GimerBusiness Member
    DMV · Member since 2017 · 3k+ posts · 3k+ votes
    8y

    As a single member LLC and just getting started, you don't even need an operating agreement. The LLC Act in your state provides the framework.

    However, if you want things done right, with your best interests in mind, all questions answered, and future plans (such as adding additional players) covered appropriately, go with an attorney.

    Gimer Law516 Reviews
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  • Justin K.
    Depew, NY · Member since 2017 · 44 posts · 40 votes
    8y
    I'm no attorney, and time will tell if it was a good decision, but I'm in the process of forming my own LLC in NY. LLC University on YouTube has step-by-step instructions that are easy to follow.
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  • Ryan Seib
    Attorney and Real Estate Broker · Madison, WI · Member since 2016 · 265 posts · 100 votes
    8y

    Operating agreements can also be helpful if you bring on a partner, or in a liability situation such as a lawsuit. I have also seen people set up their LLCs incorrectly (or not at all). In one case one of the two landlords for a bigbox store property was an LLC that was deeded the property years prior to its formation. That creates a potentially huge problem.

    That said, it may not be worth it to make the cash outlay at the beginning of your business unless you have the cashflow to justify it. If you have a few properties, I highly recommend having an attorney not only set up your LLC but serve as an outside advisor. If you have nothing, there is a lot less to protect. Make your own informed judgment, though! Research on BP and talking to an attorney is a great place to get some feedback.

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