*Full Transcription Below*
Hey, good morning everybody.
It's Friday FAQ time. And today's question is, "should I have an LLC for my mobile notary and loan signing business?"
My name is Bill Soroka, and I'm the founder of NotaryCoach.com and the Sign & Thrive Training Course and Community.
And before we get started, first let me say that I have to give you a disclaimer here. I am not an attorney or a tax advisor, so it's always recommended that you seek professional advice for your situation. There's actually another blanket law or policy that works for everyone in every situation. So I'm going to give you a little bit of guidelines here, kind of what I did, and what the majority of notaries do whenever they get started. But please know that it's highly recommended that you get the professional advice that you need.
Okay, so the question comes in from multiple people every single week, via email via. You can see it in the comments and the YouTube videos. I get Facebook messenger messages all the time. "Do I need to form an LLC or other legal entity before I get started as a mobile notary and loan signing agent?"
So the short answer is no, not usually. And there's a couple of reasons for this.
First to borrow an adage from my friend Chandler bolt: until you sell your services to someone you don't even have a business. So before you start spending time and resources like money on formulating a legal entity... Start earning some revenue.
Second, there's a lot of misconception about why we want to even form a legal entity like an LLC or a corporation. We think that that somehow this is going to validate us and legitimize our business. And suddenly our customers are going to come flocking to our doors. And that's just not how it works. Our customers don't actually care how we form our business entities in the background because the LLC, or otherwise known as a limited liability company, these corporations, are designed for two main purposes and client attraction and marketing is not one of them.
The first reason that you would consider a formal business entity like an LLC or a corporation is that they can help separate and protect your personal assets against any actions that somebody takes against you in business.
But still this has some major loopholes. And some of the LLCs can even be pierced, especially if you're a single member LLC. So this may not even give you or afford you all of those protections that you think you're getting by setting one up. That's why it's so important that you get the legal advice from an attorney that knows your situation and your laws in your state, so you can get the best situation for you.
Now the second reason to consider a formal business entity is tax efficiency. If you structure these things correctly and under the right circumstances, you can implement some cool strategies that will actually help in the long run, and even short term for your tax efficiency in your business, especially when it comes to self employment taxes.
Now, even with these two great considerations for using formal business entities, 90% of us will not need this to get started. We're just not in the situation where it would justify the expense and the time that it takes to set up one of these organizations. Most of us can just begin operations as a mobile notary and a loan signing agent right away acting as a sole proprietorship.
Now keep in mind that some States, counties, cities, they may have some business licensing requirements too. So you just need to do your due diligence and look up that.
So once your income crosses a certain threshold and it might make sense to formalize your business entity, that income threshold is going to vary per person, per state, per situation, but just in your mind kind of set it somewhere around the 6 figure mark. You start making around a hundred grand a year, you might be looking for some other options for saving, for tax efficiency or protecting some of your assets. So if you're making between $6k and $10k a month in this business as a mobile notary loan signing agent, you can likely afford the professional advice that you need to make the best decision about what's next for you when it comes to business entities.
Now, one of the other things that you really should consider everybody should consider is one of these prepaid legal memberships as well. Those services exist. It's almost like having legal insuranceso you have quality, high quality legal advice when you need it at a fraction of the cost, so you can just call in and get the advice that you need.
So I hope that clears up some of the confusion about how and when it makes sense for formalizing with a legal entity.
If you have any questions about this though or any other aspect of your business, I love talking business, so feel free to reach out to me. I think the best way is to schedule a free mentor call with me. You can do that on my website at www.NotaryCoach.com up in the upper right hand corner, there's a place that says book a call with Bill. And I set aside time every day to talk to notaries of all levels about all aspects of their business and I look forward to it.
Thanks a lot guys. Enjoy your Friday. Enjoy your weekend!
I'll talk to you soon. I'm sure.
Check out my favorite prepaid legal services plan HERE!
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