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Road to LLC

This Web page discusses what I did in order to form a Limited Liability Company in the State of Delaware known as Electric Lichen L.L.C.

This is by no means legal advice, but I hope it helps others who may be thinking about starting up their own company. Please be aware that the following notes represent the unique specifications of our firm. Therefore, you should contact a lawyer to help you form your own L.L.C.

Alot of people these days are forming L.L.C.'s in Delaware. Why? Here a few of the major reasons:

The first step was to determine a business location. According to The San Francisco Tax Collector, "business in San Francisco includes all activities engaged in or caused to be engaged in within San Francisco with the object of gain, benefit or advantage, whether direct or indirect, to the taxpayer or to another or to others."

A business location is basically the address where you do the work that the money flows to. Obviously, our government makes substantial revenue from every new company and this becomes a vital point for the local, county, state, and federal jurisdictions.

We opened our office in the financial district of San Francisco because it was already in a commercially zoned area and it was within easy striking distance of our first client. For people who work out their homes in San Francisco, the city advises that you check with the Zoning Center to determine if you are allowed to conduct your type of business there.

Zoning Center
City Planning Information Center
1660 Mission Street
1st floor
415-558-6377
tel 415-558-6377
fax 415-558-6409
hours: 8am-5pm
So, we finally finished the project and were ready to be paid. The first question the client asked was "Who do I make the check out to?" So it was time to talk with my partner Don about the name of our new company so I could register a fictitious business name in the city of San Francisco. Our name, Electric Lichen, was inspired by the world's largest living organism, Armillaria bulbosahas, an underground fungus that covers 30 acres in northern Michigan. Lichenologist Trevor Goward once said, "Lichens are fungi that have discovered agriculture." And as my partner Don noted, "Fungus has fun in it and you are a 'funguy.'"

In order to register the fictitious business name I needed to:

In order to deposit our client's check, we needed to open a business bank account. Bank of America requires a Federal ID Number a.k.a. "FEIN." FEIN's are obtained from the Federal Government with a phone call to your local TELE-TIN Unit. Sole proprietorships often use their social security number in lieu of the FEIN. But this does not apply to L.L.C.'s.

In order to obtain the FEIN, I needed to:

Now I was ready to begin the "incorporation" process. A Limited Liability Company is actually not a corporation and is born via Articles of Formation, rather than Articles of Incorporation. There is alot to this process, so I hired The Company Corporation, in Wilmington Delaware, to handle it all for me. Unfortunately, they have recently been bought out by another firm. But here's a short list of other companies in Delaware that can do this too.

In order to hire The Company Corporation to form the L.L.C. in Delaware, I needed to:

Once I received the fax confirmation, the new company was a legal entity in the eyes of the US Government.

My next step was to legally operate as a foreign corporation in California, because Electric Lichen L.L.C. does business in the state. More forms and money were needed, so I hired The Company Corporation to handle it.

In order to hire The Company Corporation to file Electric Lichen L.L.C. as a foreign corporation in California, I needed to:

Once I received the corporate kit from The Company Corporation, I needed to store the following five important records, a.k.a "Limited Liability Company Minutes and By-Laws":

Taxes, taxes, taxes. Why else do we go through all of this paperwork?

Here are the taxes I needed to investigate:


** Update 30 April 2002 **

LLCs require 2 things:
a) a registered agent with a delaware street address.
b) payment of the $100 annual franchise tax by June 1st. (the agent must handle this.)

There is no filing to be done, there is nothing else. If The Company Corporation's fees are deemed excessive, one can shop around for a less expensive registered agent.

Jim Gleason

electriclichen.com Last modified: Thu Mar 03 15:33:530 EST 2002