P2 – Transcript - How To Set Up Your LLC
0:00
Well, thanks for joining me.
0:02
I’m going to go into some details and an overview of setting up the limited liability company and the different criteria that you’ll want to consider when you’re setting it up.
0:15
Because anybody can go to your secretary of state, can go online and you can type out the information in five minutes on forming a company. You can register one and then you can stop there. Most people actually do it that way, and that’s, that’s the end of it. And it’s amazing how people can, can just do that much, and then run a whole business and not even understand that there’s an operating agreement. And a whole set of rules and procedures and things that go along with it.
0:37
So, what I want to show you is how to use a limited liability company, even though it’s a creature of the state. It’s a creature of statute.
0:45
I’m going to show you how to use it to manage property and cash flow in a way that the state can’t interfere with, or the feds, OK? That’s really what we’re doing here.
0:55
So there’s, I’m gonna give you this overview, and then I’m going to dial it in and successive videos, right? So I know That’s gonna bring up some questions. Just be patient. Let me lay all this out.
1:07
I know that when I explain some of these sections here, you’re gonna have questions So just write those questions down. I intend to get to those.
1:15
Maybe it’s going to be in the second, third, fourth, or fifth video, but that’s the whole point of this, is just like a college course. OK?
1:21
So, let me just start with this or so, I’m going to take you through the process of registering a limited liability company and it’s known as a domestic, limited liability company.
1:30
The state makes a distinction between foreign and domestic, So, and also, the limited liability company that we’re using is not a limited partnership.
1:39
And it’s not a professional limited liability company.
1:42
So just keep that in mind, we’ll, we’ll go over that shortly.
1:46
I want to talk about California real quick, as we get started. So California residents.
1:51
There’s a law in California, we’re allows the Franchise Tax Board to send you a bill, or tax you, four, not registering a company in the state of California. If you are considered a resident of the state of California, and a resident would be someone who lives there, someone who gets mail there.
2:10
Someone who has a driver’s license there, someone who’s enrolled his children in public school, or houses name on the utility bill or owns some real estate, OK, or is employed in the state of California.
2:22
So, these are residents of the state of California.
2:26
So, I just think that California’s a good state to avoid. If you’re there, even if you live there, it’s good to organize outside the state.
2:33
So for, for example, purposes, let’s just say, we choose New Mexico.
2:39
It doesn’t mean you have to go to New Mexico to register your company.
2:42
So you’re, you live in California and you want to register the company, the LLC in New Mexico.
2:47
Now, the banks wouldn’t want you to opened an account where they, the company has registered. So if I register New Mexico, the banks want you to open the account in New Mexico, and they want it to be a New Mexico resident.
3:01
You’re not going to be able to do that as a California resident unless you set up a paper trail to start with. And this is legal to do this. Everybody does it, Whoever is going to run a business this way, this is how you do it.
3:11
So, in California, you would simply open a mailbox in the state of New Mexico, or whatever state. You’re going to choose to register the company. And let’s just say, New Mexico.
3:19
You’d use a Mailbox Service. You can find those on the internet.
3:22
You find a Mailbox service, and you you call them up, and you say, Hey, can I open a mailbox? I’m going to move over there, or I’m going to do such and such whatever I’m going to do. I want a mailbox, Or I’m running a business out of the state of New Mexico.
3:33
So, some will, some won’t.
3:35
They’ll open the box, so, basically, what that will mean is, you will have to send them money.
3:39
To open a box, maybe it’s a credit card, maybe it’s a money order.
3:43
And, you have to usually do a postal form.
3:46
The form number is 1983. So, I’m gonna, I’m gonna put, this form is going to be associated with this video, so you’ll, you’ll have quick access to it. But you can also find it on the Internet, You can go search on it, using the term form, 1 5, 8 3, PDF.
4:01
It’s really easy to find.
4:02
You can print that out, fill it out The one thing I’m gonna go over on that is how to how to file that form with your Postal service or your mailbox service, so that you get certain benefits from it.
4:14
Certain privacy benefits.
4:16
Now, so that’s one, that’s one important aspect.
4:19
So, when you, when you go to register a company outside of the state of California, you want to show that you have a mailbox where the principal place of business is in the state of New Mexico, even if you’re a California resident.
4:31
The reason being is when you submit the articles to the state in Mexico, It’s Secretary of State.
4:36
I believe there’s some arrangement with all the states in California.
4:40
Where, if anyone has a California resident showing a California address, philes Articles in a foreign state, that Secretary of State’s office will notify the State of California and the State of California will then send a bill.
4:52
There’s no other way for the state to, to know this.
4:55
I’ve looked at different situations. And I think that’s where the the Secretary of State is doing this. It’s notifying the state of California whenever someone does that. I don’t think it’s the banks.
5:07
And the reason I mention that is because, when you open your bank account, you’re going to need your California ID. We don’t need to change that to get your account open, and you’ll still get the same result.
5:16
We can’t get into, we’ll get into some more information about changing residency. It’s not so important to get your account open. It’s actually quite simple.
5:22
So, it sounds complicated, but there’s, there’s just some important things you want to do.
5:26
All right. So that’s one for California.
5:29
I would also recommend, if you’re in Illinois or Texas, don’t register a company in those states. You don’t even need a company in Massachusetts. Massachusetts charges way too much for its charge, $500.
5:40
That’s ridiculous. You can easily go to Ohio. It’s $99.
5:44
You can go to Pennsylvania. I like Pennsylvania, because the fee is $125, and it’s forever.
5:50
You don’t pay an annual fee, I don’t believe in you even need to file an annual report.
5:54
The same with New Mexico, you only pay $50, and there’s no annual report and your charter is good forever, OK?
6:00
Other states you have to follow at least a charter and pay somewhat of a fee, $50, $100, or something like that, to renew the charter or to file your annual reports to prevent the state from revoking the charter.
6:13
Let me make 1, 1 comment about that.
6:16
Typically, you can register a limited liability company or any corporation for that matter. And you can open all your accounts the way you want your bank accounts.
6:23
If it’s at a Crypto exchange account, you can do that.
6:26
You can title property, you can deal with third parties, you can get a commercial lease agreement with the company, and then you can let the charter be revoked or expired by the State. Because you choose not to file the annual reports or pay the annual fee.
6:40
You can choose to let that happen.
6:41
Now, the case law for our court system says that the charter is still recognized as being valid, even though it’s been expired or revoked by the state for failure to file the annual reports or pay the fee.
6:54
So there’s the courts will still recognize the charter, as valid. But if you have an invalid charter to this expire, for example, when you go into a bank to open a new account, it’s not going to let you do that.
7:05
The bank’s going to make you renew the charter.
7:09
So if you’re in that situation, and usually it’s cheaper just to set up a new company, so you can decide at that point.
7:16
Yes, so It’s OK if your charter is expired.
7:20
I tell everybody that it’s So just decide what you want to do if you want to. If you want to wait a couple of years and get into a commercial lease agreement, or open some new accounts, or have some, you know, you want to use that same company, you want to keep it in. Good standing, and for the most part, it’s pretty cheap and easy to keep it in. Good standing, You can file an annual report in about one minute, on the Internet. So, this is an interesting fact to keep in mind.
7:41
Now, when you go online to the Secretary of State for the state, Huge Tows, and like New Mexico, it’s gonna ask you to create an account. So it’s the same thing as you create an e-mail account. They just wanna have your e-mail address and a password that you can make up. Sometimes they ask you a couple other criteria.
7:57
Like, I think Ohio has some sort of, other additional code you have to remember.
8:03
So I keep a file with all that information in case I forget, And then you, once you get in, on the Internet you set up, you select the option to register a new company.
8:13
So, it’s going to be, like I said before, it’s gonna be a domestic limited liability company.
8:17
You can started out as one member, and make it as the managing member, So let’s say if it’s yourself Bill Smith, right?
8:23
So, Bill Smith is gonna register his own company.
8:26
It’s called Bill Smith LLC, and I’m not saying your name as the company name is a good idea. I’m just saying, for example, Bill Smith, LLC, so Bill Smith goes online. He names himself as the managing member.
8:37
He’s going to be the single member.
8:39
If you have two members that are not spouses, they’re not married. To members gives you legal protections called charging order.
8:46
Charter protection means that the companies, assets’, can’t be attached for the debts of the members.
8:56
So Bill Smith goes on there. He registers as a single member. He can also, if he has an address where he’s registering. So let’s say he lives in New Mexico in this example.
9:06
Let’s say, Bill Smith lives in New Mexico, and he has a home address or an apartment address.
9:09
He can name himself as the registered agent.
9:13
Now, the registered agent is, an individual could be a company or a person that can accept a summons in behalf of the company.
9:23
And every, every state requires a company that’s registered in the state to have it, someone designated to accept service of process, being sued, OK.
9:34
Now, mostly, the companies we’re setting up are not going to be in a business, Are usually holding companies, they’re usually managing crypto accounts or cash flows. They’re not going to be involved in a business that would end up being sued, and even if they were in that sort of business, it would take years for that situation to develop.
9:49
So, the reservation is really not that important, so I get around a little bit by finding a real address. So, let’s say Bill was in Bill Smith is in California, and I needed a registered agent address. I cannot use a Post Office box, I have to use. I cannot use a Mailbox Service either. I have to use a real physical location. I can use an office address, but then, I have to pay for an office service, or monthly or virtual office, and that’s, those are fairly cheap, but it’s more convenient to just go on the Internet and find a valid address. So, here’s what I do.
10:19
I go to white pages dot com and I just search on a name. A last name in the state. I want the physical address and I find a valid postal address.
10:28
It’s actually a valid residential address where mail can be received.
10:31
It’s somebody’s address, It’s somebody’s house.
10:33
He doesn’t care that, we’re going to, by mistake, use his address with somebody else’s name, so that’s, that’s what I do in many cases. Some people don’t like that, but it saves $150 a year on agent fees.
10:45
If you’re running a real business, I recommend getting a real registered agent. If you’re just using it for cash flow in a holding company, it’s not, it’s not important.
10:53
So, if you go to web page dot com and get a valid address, then use that as the agent put. Put Bill Smith, your name, OK, whoever is organized.
11:01
Organizing this as a single member, make yourself the registered agent also.
11:06
And use that address you got from white pages dot com.
11:09
Alright, so what you’re registering are the articles.
11:12
So the information in the articles includes the company name With the LLC designation, it has to have that on there.
11:22
It’s going to be a list of the members, their legal names, the names that you would use if you’re going to open a bank account with each member’s address.
11:29
And, of course, your registered agent address, that’s part of the articles.
11:34
It’s also going to ask you, when you’re filling out the article or the prompts on the online, you do it on the Internet, it’s going to ask you that the term of the charter, how long is this going to be a company that you’re going to use?
11:48
And I always say perpetual perpetual, because, I mean, what was the point of telling? Registering it for only three years. It doesn’t make any sense. So I always just say perpetual, because I can dissolve the company anytime I want.
12:01
And then the purpose of the company.
12:02
Now, generally, you can just make a generic statement saying, this company is organized for all purposes. That could be the complete complete version of it lately. I’ve got some pushback from Pennsylvania, and they wanted me to give more specifics, which really isn’t their business.
12:17
I’m not asking for non-profit status. So I don’t have to be that specific but just to appease them and get the job done.
12:23
I went ahead and I started from now on and all states doing this.
12:26
I’m saying, the purpose for which this company is organized is for all lawful purposes.
12:33
Including, but not limited to live, not limited to investing in real estate, Or you can add whatever you want, something generic, then you can even be more specific. You can say the purpose for which this company is organized is for all lawful purposes.
12:47
Including, but not limited to, investing in real estate, Which may also include property management, and tax lien certificates.
12:57
Right. That could be it.
12:59
So that’s a little more detailed and just because you said that in the articles it doesn’t mean that’s all you have to do.
13:04
You you’re not limited to doing just what he said because you did say you can do whatever is legal, right?
13:10
Obviously we’re not gonna use a company for money laundering OK. Even though you’ll be likely accused of that, I’m not saying that that ever should be what your intensity.
13:19
And then of course, you can add other things.
13:21
Now, again, like I said before, this isn’t a limited liability company, It’s not a professional association, it’s not a non-profit, that’s different classification Altogether, we’re not getting into that.
13:33
And then what will happen is, when you submit this, dobie, a signature page for authorizing the charter and then, there’ll be a, there’ll be a prompt when you’re registering this.
13:44
If you’re doing this yourself, it’ll prompt you for the name. And the name. And address of the organizer?
13:49
Well, the organizer, If it’s Bill Smith, the Organizer’s, Bylsma, he’s also the managing Member.
13:55
There are no third party managers. He’s the member Manager.
13:59
And he’s also the registered agent. And he’s also the organizer.
14:03
All right. If I had another member left, let’s see if it’s his friend.
14:07
Wanted to do it Paul, something Paul Smith.
14:10
All right. So we’re going to add Paul’s name in there and he can be a member or he can be a managing member.
14:15
He could also be a non member. I wouldn’t I wouldn’t get into that because it’s not necessary. You don’t need non members for what I’m describing here.
14:22
So you’re going to be a member managing member.
14:25
And you’re going to be the organizer and the registered agent.
14:30
When you’ve submitted everything, you’re going to pay a fee.
14:32
You can use a credit card in New Mexico, they want you to fund the account, first with the credit cards. You pay first.
14:39
And now you have money in the account.
14:41
And then when you go register everything, you just say, use my account.
14:44
You’ll get it. It’ll pay out.
14:47
So the secretary of state will assign a file number when you get the file number, don’t do anything with the company until you get the file number. It’s a registration number.
14:54
I know sometimes in the acknowledgement or the receipt for the payment, you get a document number that isn’t always the file number assigned by the state when it’s accepted as a valid charter.
15:05
So waiting till you can confirm.
15:07
So the way you confirm is that the Secretary of State has assigned a file number, or a registration number, or a document number.
15:14
Except as your charter is just by simply going on the Internet and searching.
15:19
You search on the name of the state, and then you search on the phrase, Business search, where you can search on the name of the state, the term Secretary of state, and then the term business search. And you’ll get to a website, where you can type in the name of the company that you just registered.
15:34
And notice that you’re not logging into searched for it. You’re going to just search for it, just like anybody else would.
15:38
And you’ll be able to see the listing of the company, if it’s valid, if it’s been accepted by the state.
15:43
It will have a file number, and then copy that file number, and that’ll go in your other documents, and I’ll explain what those are in a second.
15:50
So you want the file number first.
15:51
Now, once you get the file number, you can apply for your employer identification number. You need your EIN, if you’re going to use a bank account.
15:58
If you’re going to use the LLC to hold title to real estate, and that’s all it’s going to do.
16:03
Or maybe it’s going to hold a lean to some real estate, and you do not need an EIN for that.
16:06
You only need the EIN, because the bank is going to say, We won’t open the account unless you have an EIN for it. Just getting an EIN does not create any new obligations.
16:15
It doesn’t make the person who gets the EIN obligated for anything.
16:19
Think of it like, if you were organized, helping your friend organize a church, and it was his business, and you’re just volunteering, and he wants to open a bank account for it, and he you’re the Secretary, that’s your volunteer job, you would use your SSN to apply for the churches, EIN.
16:36
That doesn’t create an obligation for you, that doesn’t create an obligation for the church, there’s still a separate, uh, there’s this separation and legal separation there. So don’t be so concerned about that.
16:47
So once you get your file number, you can then apply for your EIN and you’ll see a link.
16:54
It’s either next, associated this video or in my instruction set, there’s a link there, but if there’s no link, I mean, you can just go search on the Internet for Redis IRS EIN Application Online.
17:08
OK, those phrases, if you put them in the search term on Google or whatever search engine you’d like to use, you’ll get to the website.
17:15
Now be careful, because there are some services that try to sell you the service and getting an EIN for $50. It’s not necessary, you can do for free.
17:23
It takes just about maybe 5 or 10 minutes. You gotta fill out this application. You gotta give them all kinds of information. I’ll go over that in a minute.
17:30
And then you’ll get an EIN Approval letter with an EIN on there and the name of your company.
17:36
It’ll list your name as a member, and then you want to save that document. There’ll be a PDF on your screen and save it immediately. Don’t wait. Because if that document goes away and you can’t recover it, it’s really difficult to get it back from the IRS. And you can easily just go get another number. You can assign two numbers to an LLC, it has to be just that one number.
17:54
Likewise, you can’t use an EIN from another company for a different company. It has it stuck with that company forever.
18:01
Don’t, don’t ever try to use an end, is assigned to a company, don’t ever use it for another company, just like you wouldn’t use a registration plate for a different car when it’s been assigned to another car. That’s, that’s not a good idea.
18:15
So, what you’re going to do is you assign, you apply for the EIN.
18:19
You can use your SSN to do it. It’s very easy, it doesn’t create an obligation like I said.
18:23
You can also use another company to apply for the new EIN for your new company.
18:28
You can use its EIN, and its name, and its address as the applicant for the New EIN for your new company.
18:35
OK, you can also use a friend’s SSN if you really want to.
18:38
I’ve done this before.
18:39
I’ve gone to find companies that were abandoned through the Secretary of State’s office, and some of the companies had listed ends.
18:46
And I was able to use the EIN and the company name and the address, and I noticed that was inactive, OK, don’t use an act of one to do this.
18:54
Although, it shouldn’t be a problem, I just wanna do it that way. Make sure it’s been inactive for awhile a couple of years.
18:59
Use its … as the applicant for this new UI, and if you really want to, you can do it that way. I rarely do it that way, but I just want to share that with you. So here’s what you do.
19:08
The, the, the applicant, your company is the applicant, but you’re going to sign for it.
19:14
It’s going to be a single member LLC. I don’t care if it’s a multi-member, you tell the IRS it’s a single member, that’s how you started out.
19:21
Remember what you say in the EIN application is not binding on the company. Only the articles are binding.
19:27
What you say to the bank is not binding on the company.
19:31
It’s a single member, that’s how you’re going to apply.
19:34
You’re also going to say that it’s member managed, that means there’s no third party that’s going to manage the company.
19:40
You can do that later if you want to, and there are reasons why you’d want to, we can go over that later.
19:44
OK, the EIN you’re asking for is only for banking purposes.
19:50
And of course, you want to say again if you’re asked for what reasons you’re getting this EIN, and what reasons the company is getting it.
20:00
It’s going to be for real estate investing.
20:03
You can tell them whatever you want. I’m just saying, if you disrupt, don’t want to answer the question, just skim a generic response like that.
20:08
You get that approval letter. Save on your computer, print it out, you know walk into the back. If you’re going to open the account, the bank account online, you want to be able to e-mail it to the back.
20:19
We’ll get we’re without a second.
20:21
So you want to keep it on in your file. So open a folder. With your LLC’s name and you put all these documents in there, OK, You keep records of everything. You’re gonna get an abstract. So if you have my service do it, we’re gonna give you an abstract. Now. nobody does this. This is just my creation.
20:35
I’ve done it this way over the years and abstract is is a watered down version, very watered down version of the operating agreement.
20:43
It’s just enough to get your account open. Now you don’t go and tell the bank. It’s an abstract of the operating agreement.
20:48
You tell them what it says at the top, it’s an operating agreement, This is your operating agreement.
20:53
As far as the bank is concerned, OK, it’s usually it’s one page. I mean, I might make them, too, But pretty much every one page, you’re going to have that, I’m associated with this video, you’ll be able to download it. I have a banking resolution.
21:04
Basically, all this means is the the banking resolution is where the members are the managers which in this case happened to be the members are authorizing an individual to be signing for the LLC at the bank account.
21:20
So, The banking resolution is where the members saying, yes, I’m authorizing this individual this member to be a sign up for the account while Bill Smith that he’s a single member.
21:29
He’s going to authorize himself to sign as managing member, OK? Now remember, he’s, this is his title.
21:36
This is not Bill Smith individually anymore. This is Bill Smith authorizing.
21:40
Bill Smith as a managing member, authorizing himself as Managing Member to be a signer for the account.
21:45
Now, it sounds funny, but this is how we do things. This is how companies operate.
21:50
Now with that, you’re gonna get, you should include, if you don’t have this, if you don’t get this for me, or you don’t have this, the bank will have this is called a Certificate of beneficial interest.
22:01
All you’re doing is stating what the members, interest is in the company. So I always say that it’s more than 25%. That’s all they care about. They don’t care what it is, they just care whether or not it’s over 25%, it is 100% if you’re single member.
22:15
But the Certificate of Beneficial Interests just says that the member who’s signing here has more than 25% interest in the company.
22:22
There will be times when it can be zero interest if you’re the managing non member, so we can get into that later.
22:30
Now, the real important document is your Operating Agreement.
22:33
Now, we don’t show that to anyone, but it is, it is written, it is how your company operates. It is the law of the company.
22:41
And it’s there to protect your interests in the company.
22:45
If the company sued or there’s an investigation, and someone wants to subpoena the opening agreement. So it’s important to keep it going, it’s important to update it. It’s important to memorialize agreements in the operating agreement. If you bring on a partner, you want to put a provision or at an article into the operating agreement.
23:03
And just like we do with the blockchain trust, that is how we treat certain classes of assets.
23:09
So, the blockchain trust describes how the company is going to interact with its assets held at the cryptographic exchanges. All right.
23:17
So, the operating agreement is important, but we’re not going to show it to anybody unless it’s under subpoena.
23:22
Now, I’m gonna go in a little bit more here.
23:24
I’ve got about another 12 minutes.
23:26
I think, some of this is redundant, so that’s probably a good thing.
23:31
We will get into more detail, but this is really is largest overview, as I can provide at this time.
23:36
So we, we’ve covered this EIN application process I think pretty well.
23:42
The address that you’re using in the EIN application, just use the address that we chose for the registered agent address. You can use any address just to be consistent, though. Use the one for the registered agent. That’s common practice because on the approval letter, it’s going to show the address that was used. You can also use the principal place of business.
24:02
I would, again, I would use the registered agent address. That would work, in most cases. You may be asked along the way. Maybe the bank will ask you. I don’t think the IRS asks you, but the bank may ask you.
24:12
What’s the tax treatment for the LLC.
24:14
Now, most of these I’m doing for managing cash flow and accounts at the exchanges, most of them are not going to file tax returns.
24:21
So you could say that it’s an S corps, but it doesn’t matter.
24:24
You can tell whomever is asking, it’s an S corp, it’s not an S corp until you file the right documents, and you’re never going to do that, but it doesn’t matter again. So just to ask the question, just tell them it’s an S corp, and that’s your tax treatment. If you have, if you’re asked the purpose of the LLC.
24:38
What I’d like to do is answer in a way that that ends the conversation quickly.
24:42
So if I say something like, I’m a multi-billion dollar international real estate tycoon, and I’m going to build a hotel right here in your town, the banks, the personnel at the bank, are trained to engage you in conversation. They’re gonna say, The person you’re talking to is going to say, Wow, that’s interesting. Well, how did you learn how to do that? Do you already have your investors can ask you a lot of questions? And don’t think he’s being your friend. He wants to collect information, so what you want to do is answer the question so that it ends the conversation. Here’s how you do it. You say, Yeah, I open an account, because my my friends said, He’s going to show me how to invest in real estate. So, what that says is, you don’t know anything about real estate. Don’t bother asking me any questions.
25:21
And this is I’m a newbie, right, And this ends the conversation.
25:26
You want to be polite to the back the bank personnel. They’re going to ask you a lot of nosey questions. Be polite but give them responses that are not getting.
25:33
You don’t need to know that you’re involved in cryptographic currency and all these things and whatever it is you’re doing.
25:37
Just give them enough to get the account opened.
25:41
Because the companies that we’re typically using here, there are some exceptions.
25:46
I know that I I do these on occasion but for the most part the it’s not going to have any employees, Your LLC is not gonna have any employees.
25:55
There’s gonna be no W twos.
25:56
W fours, it’s not gonna pay wages. Again, no W twos. Know Debbie for wages means I’m, I’m paying out and reporting on a W two.
26:05
If I’m reporting on a W two, that means I’m filing tax returns, We’re not doing that. What is managing some assets for measuring some cash flow?
26:11
It’s gotta be a pass through in a tax deferred structure.
26:16
The reason why I say that is because the State may send you forms, requesting you to fill things out or make affidavit or things like that. You want to respond, respond without filling out their forms. Do not fill out the forms. You want to respond with a written letter or phone call, whichever you’re comfortable with, and explain.
26:35
First of all, how did you get this information? Because I didn’t give it to you. How did you know anything about my company?
26:40
I didn’t disclose anything to you.
26:42
And how did you conclude that I had wages was paying wages, or had employees and they were receiving wages? How did you make that conclusion? You can do that if you want to try to get them to step back a little bit, but you don’t have to. You don’t have to be argumentative with them.
26:54
It’s simple enough to just tell them, Hey, I’ve got your forms and everything, but none of this applies to my company because it’s just a holding company. I’m not. I don’t have employees, and we’re not paying wages.
27:05
However, maybe we might So we’ll let you know. But, in the meantime, we don’t have those in our plans. And we don’t have anybody on our, on our records that suits that criteria.
27:15
That should end the conversation. That’s what you want.
27:18
Sometimes you have to similar, I think you should send them a letter, because you want to keep that letter in your, your company folder on your computer. So it keeps a history of what you’re, what you’re doing.
27:29
So that way you can remember fairly easily, all right.
27:32
And if you bring on a partner or if you sell the company, there’s a record as to what happened.
27:37
Again, this is a pass through.
27:39
It doesn’t file, and the reports are tax returns. However, you should do some accounting.
27:43
You should keep track of what’s going on with your assets and your income so we can make good decisions. Let me give you a couple of notes on, on the accounting process, and then I’ll, I’m gonna close. Will go into the next video, Like I said, I did the biggest overview.
27:54
I could, and then as we proceed to the next video, it’s going to get more detailed.
27:59
All right.
27:59
So on the accounting, I like to have bookkeepers. That’s just my preference.
28:04
So I use bookkeepers.
28:06
They don’t, they don’t tend to ask a lot of questions. I use bookkeepers that don’t have a CPA status.
28:12
They’re not enrolled agents, I don’t. I don’t like those guys too much. I don’t care about those. And they’re not special.
28:17
I just need someone to push the buttons on the computer, and generate my balance sheet in my income statement, or analyze one particular asset in my portfolio, with its own income statement, or balance sheet.
28:28
Or, maybe I need a report, so I can open a bank account. Or, maybe I need something, because maybe, I’m going to buy an asset, and the broker is asking me for my books and records. And I don’t want to give them all my books and records. I just want to go get some accounting, so I can show them the specific part that was that’s pertinent to what we’re.
28:44
Trying to do because when you’re when you’re buying another asset, usually you want to go through a broker and the broker is going to try to qualify to make sure that you can actually even talk to his cellar. OK, So that may be another reason to do accounting or at least have regular accounting records on file. And again, back to the abstract I have a note here. I use the abstract to open all accounts.
29:03
So, the abstract we, I referenced earlier, we’re talking about the Operating Agreement, I used that for the bank accounts, and crypto accounts, and any third party accounts.
29:15
Yeah, any, anything anywhere? I’m going to manage money, right?
29:18
I use the abstract for that purpose. I don’t, I don’t ever give out the operating agreement, or any portion of it, it’s nobody’s business.
29:23
The same with the blockchain trust. You don’t give that data out to anybody that is part of the operating agreement.
29:29
OK, now, I know that when you go to Gemini, and these other exchanges, they’re asking you for things like an organizational chart.
29:37
You’re not required to have an organizational chart. They’re not going to penalize you for that. Just tell them.
29:41
Either, we don’t have an organizational chart at this time, or we have no plans to create one, where it’s not necessary for what we’re using the company for and in our estimation right, in my estimation, right, because I’m the single member.
29:57
You don’t need a business plan open accounts either. It’s going to ask you for a Business Plan, Gemini, especially may ask you for that.
30:04
Now here’s another thing, some of the information that’s being requested.
30:07
You’re a member, a managing member, you can call yourself Vice President of this LLC, if you want.
30:14
You’re a representative of the company. It’s your job to operate the company in the proper manner.
30:20
If your company happens to have a contract, like a non disclosure agreement, nobody needs to know or see the agreement, but they can take your word for it, that you’re, that the information being requested as is protected by a contract, non disclosure agreement.
30:37
It’s also subject of a trade secret, OK?
30:40
It’s under Agreement, or it’s under the Trade Secrets provision in your Operating Agreement, in your company, so you’re not permitted to disclose that unless certain conditions are met and they won’t be able to meet the conditions. It doesn’t matter what they are.
30:51
So you can just tell, whoever is asking for certain information, whether or not you have it, is irrelevant.
30:57
But you can, just to answer the question, you can say, Well, I can’t give that to you because that’s 70 of a trade secret. Or I can’t give that to you because it’s not within my custody or control. Or, I can’t give that to you, because I’m under a contract to not disclose it, right? So, in most cases that will answer the question, they can move on. I’m gonna, I’m gonna get into the uses of the LLC in the next video.
31:15
I think that’s going to be, this is going to be a good breaking point, and I think before I do that, I’m gonna start off with covering more of the issues about the tax questions. So, y’all can do some research and see for yourself how this works. So, let me cut this up now, and then I’ll go into next segment.