So you’ve decided to start a for profit, cash flow positive, self funded, jump started business in the great state of TX. You’ve done your research and found that you want to start a series LLC to provide maximum flexibility and asset protection.
This is the exact route I took with Turn Net Systems. We were formed in the last days of 2015. Three years later (almost to the day) I have learned quite a bit about forming, administering, governing, operating an LLC. Yes those are four distinct functions.
- You are not immediately taking outside capital. You want to reserve that option for later.
- You are granting equity to founders, with desire to retain option to pay salary later
- You want to run it as a real business , with a Board Of Directors , officers etc
- You aren’t afraid to armchair legal/accounting all the standard off the shelf bits.
- You are starting with ~10 total people , across directors and founders (split perhaps into officers (managers) and individual contributors. For reference as of 12/9/2018, TSYS has four directors, three officers (CEO/CFOO/CTO) and four individual contributors. Officers are authorized in the operating agreement to enter into contracts , they report to the board quarterly etc. Individual contributors have broad authority (including budgetary) but do not have ability to bind the company into contracts (and some other pro forma items).
Here’s what I used to get started , with all the above in mind (80% of that was in place day 1, 20% evolved over 3 years)
Buy his book: https://www.lonestarlandlaw.com/book-info.html
Buy the Nolo books
Use Quickbooks Online, neat.com, get TurboTax . Your taxes won’t be that complicated the first few years as you are starting up. Keep good records, scan them to neat. Integrate neat to QBO.
Here’s a collection of links I used when forming the LLC/drafting operating agreement etc.
http://www.baylor.edu/content/services/document.php/181957.pdf << a great article on what exactly is liability from a legal perspective. capital calls are given extensive treatment.
http://www.lexisnexis.com/legalnewsroom/tax-law/b/federaltaxation/archive/2012/06/11/substantial-economic-effect.aspx << here be dragons. You don’t want to be subject to a “substantial economic test” it’s where laywers and IRS act like cats playing with mice before killing them.
http://www.swlaw.com/assets/pdf/news/2010/02/18/Series%20LLCs%20(BXS)_BaharSchippel.pdf << the professionals are nervous about series llc, but that is their job no?
http://apps.americanbar.org/buslaw/committees/CL690000pub/newsletter/200807/kean.pdf << lots of good tax info in here
http://www.mosaichub.com/answers/question/how-to-create-a-vesting-schedule-for-a-company << vesting llc practical
http://www.brightjourney.com/q/actually-setup-vesting-agreement-co-founders-w-breaking-budget << more llc vesting stuff
http://www.baylor.edu/content/services/document.php/181957.pdf << withdrawl/expulsion of members. ties into vesting.
http://foundrs.com/ << equity calculator
https://www.clerky.com/yc-stock-plan-forms << equity vesting for yc companies
Here is a good collection of curated links on accounting:
Most of the links were sourced from: