Forming LLC, need advice

[indyeric]

Hello, I'm new to the forums. I'm looking to convert my company to an LLC and change the name at the same time. I've got an engineering background, with no formal business education. Just a strong entrepreneurial spirit.

Anyway, I'm working to establish my company as an LLC and need some advice here.

Info about me and my company: Sole-proprieter, small business, selling a product on the internet, no actual storefront ("garage" based business).
I was previously set up as a DBA two years ago, no real income, then this year I've been actively working on the business and things have taken off. Now want to make it more official and protect myself by forming an LLC. I was going to go the Legal Zoom route, but since I've taken some steps myself, I've made it too complicated and expensive to use them, but I get the feeling that Legal Zoom is really unnecessary for me.

Problems/current issues:

My EIN was for the DBA company, so what I understand now is that I simply need to write to the IRS, give them the old name "Advanced Motorsport Technologies" and what the new name "AMT Engineering LLC" will be. I also need to fill out an address change form, which is fairly simple.

LLC formation with the state. I went into this blindly and accidentally set up a corporation yesterday, but I've already contacted the Indiana SOS and just need to fill out a small 2 page form "Conversion of a Corporation into a Limited Liability Company" and pay $30 to get it sorted out. Does everything sound sensible so far?

Now, do I need LegalZoom for anything? I am assuming most of the other stuff in their package can be found for free on the internet. Please correct me if I'm wrong. The things they also include, but I have no idea if I need them are:

Filing articles of Organization.
Customized Operating Agreement.
Indemnification Clause
Restrictions on Transfer
Company Resolution for Banking

So, with me being a sole-proprieter and handling everything myself, do I need any of the additional items? And if I do, can I get some templates/sample forms for free somewhere? I've recently found a software package by Intuit/Quicken/Nolo called Legal Business Pro. It may have additional forms that will help me out for other purposes.

For legal reasons, should I include my wife in documents, or does that greatly complicate things? If you haven't caught on, I'm trying to do as much by myself as possible and inexpensively.

Thanks in advance for any and all help.

I look forward to participating in these forums to get things going and to help grow my company and market it.

[LSnyder]

You really do not need legal zoom. Your state office can advise you on the proper documents needed to do a name change and a business format change (which is sounds like you have all ready received).
Throught the IRS, if you are selling a "product" just make sure you have a sales tax id #.(if necessary)
It is really not necessary to incorporate your wife.
I know you are trying to keep your funds limited. Should you need any legal assistance, our office offers a 1/2 consultation for $50.

Good luck to you.

[indyeric]

Lisa,

Thanks for your answers. I have an EIN, but did not have a sales tax ID number, nor did I know about it, so thanks for informing me of that. Fortunately (for sales tax reasons), I have not yet sold anything within my home state of Indiana. I'll get on that.

Thanks,
Eric

[adambesq]

You do not need Legal Zoom for any of your LLC formation related needs. Other than filing the Articles of Organization and a Operating Agreement all the other things you described are unnecessary and a waste of money. You can file the conversion documents on your own and can get a well drafted customized LLC Operating Agreement online for under $40. Just do a search for "LLC Agreement" online and you will find a number of good options.

Note: The conversion of a “C” corporation to an LLC is generally a taxable event. Irrespective of how the “C” corporation is converted, the conversion would be a taxable event resulting in tax to the “C” corporation as if the “C” corporation had sold its assets at fair market value. The assets received by the shareholders would then have a stepped-up basis equal to their fair market value, which would then be the basis of the assets to the LLC upon transfer.

Thus, if there were built-in gains on the assets you contributed to the Corporation the conversion may create a taxable transaction.

With respect to the EIN - you can contact the IRS re the EIN name change or can get a new EIN for free in minutes at the IRS website by doing an online search for EIN and IRS

Hope this helps and good luck with your business.

Also, I came across this free information site on LLCs that shows you how to form an LLC for free and seems to have some good LLC related info -FormLLCDirect