Industry sign banking new mexico iou simple
hey everybody this is my name is on there that you can all join us today though we'd have about 5 people we've got 17 people coming online Wow and Larry I see you there thank you for joining us so let me go in gets there i'm stacie Sacco I'm a professor at UNM I teach entrepreneurial studies also joining us from STC so she's gonna manage some of the graphics behind the scenes she's put all of you on mute I think each of you if you well there's a couple of ways for you to chime in here ask questions one you can use the chat page I'm also okay with if you wanna I think you can unmute yourself and then come on in and then ask a question so we can make this more interactive Wow we've got 20 people so let me flip over to my slides and I'll get started here one of the ideas we had in the beginning about having this workshop was to talk about the steps that you go through on different documents you need for starting a business so I need to tell you a friend I'm not a lawyer I asked one of my lawyer friends Larry to be on line with us I may have them say a word or two about or jump in anywhere in here Larry if I'm getting off track but you know I can't really give legal advice I could have disclaimer on this first page just so y'all know with the intent that I'll give you some background information and what you need to do to start a business some of the documents you need to get collected together and sign up for from my experience of working at I worked at West as a regional manager and so I would help people get started and I also I teach at UNM and I have a policy if I have any students do anything or I ask them to do something I go do it first so everything I'm gonna walk you through here I've done myself and let's see here yeah so this is can you all see my cover slide there I've got my contact information on here I talked to Cecilia from STC she's gonna put she's taping this and she's gonna put this online at the New Mexico rainforest comm website and all my slides so you'll have some materials here to refer back to but one of the let's see here one of the first things I want to talk about is right up front the steps to launch a new business and what I've got on here is this is actually this spreadsheet is from the Small Business Development Center Vic over there gave this to me who's Noah score and the whole idea was we're trying to explain okay what are the pieces of things you should have to start a business so of course there's an EIN or employee identification number you should get that established that basically replaces your social security number and becomes sort of your identity and when you're talking with other businesses in particular vendors and/or you're doing projects for somebody and they're gonna pay you and your invoice should include that you can register your new business up front you need to do that not with the taxation revenue department so you can start paying your taxes and gross receipts tax they have a pretty exhaustive set of slides on their website about how to go through individ iou's on how to use their services and pay of course they're trying to make it as easy as they can it's a little bit laborious but you can get through it I got through it anybody can get through it now then the City of Albuquerque and it's the fourth one here you'll need to get a if you're in Albuquerque get a business license when I worked out in Rio Rancho they of course have a city clerk out there and you can get a business license for any of the cities you're in or domains and then New Mexico Workforce Solutions if you have any employees they ask that either if you don't amount that you get there and basically say who your what your situation is have you hired folks and then this other one the New Mexico Secretary of State now they included this the idea of if you needed to get a trademark so there's other protections you could add and what I don't have here is any real information about copyrights and or patents and that's a whole nother animal normally where I send people for patents because I'll send you over to STC which is the Lobo rainforest downtown basically at Central and Broadway and they will help you walk you through the whole process of getting a patent patent the patent register and or applying for a pen and then getting a register I don't have any of those costs that's a whole different animal and that gets into some legal stuff i I don't know I've not been offense I really am NOT the expert at that the other piece of this is the copyrights which all that's all none other thing are being registered that can be another thing but what I would suggest any of that is that and then also tax went on vacations and you should have some people in your pool of confidants of people you go to for information so I invited Larry to come on today just to be their case we have any legal questions if you didn't disappear on me you still early yeah there he is yeah and Larry somebody I have always trusted to go to for any of this information because he's a he's an attorney and he's actually just down the street from I think you're at home though today right Larry yeah we're all working from home today or over that three from this beat is from the STC at the bird anyways the one thing that was interesting when I wouldn't gotten any LLC is that you want it from what I know and maybe even or you might come of this but you want to do that first because you're basically establishing your name and if you go into the do some research on your name and then you find out somebody else has it you're gonna get in a little bit of weirdness there so you really want to make sure that you're have done your homework you know you're out there alone I mean there's the classic story in New Mexico where we had the double rainbow restaurant up on Central that's now Flying Star because there was a company that had a double rainbow ice cream in California and they basically can there was a conflict there with using your name so I'm gonna pop ahead here but just so you know at the back of this document I have I have here the additional resources it's the last page page 10 Mexico Secretary of State business name research if I pop this up I've you can go there and put in your name if you put in my name Socko that's going to tell you that there's Sacco connections which is my company LLC and then there's also my brother Socko automotive you'll see several sockos and cling to my sister's design she has architecture so but you know you want to go look and make sure that your name isn't being used the other things I could hear is this registering your domain name once you've established what your name is generally it's a good thing as soon as possible to get from I work in this area is get your domain name to get you know if it's for me it's I have Socko connections comm and a couple others they really upfront don't cost generally that much if you're looking at something like just for fun last night I looked at this site and put it in a few things that I thought might still be not bought or be out there like New Mexico connect calm oh my goodness it's $4,000 somebody's selling it so that's why you want to buy your name as soon as you can effect I always recommend and there you may comment but oh yeah I own Stacy stock Oh calm I think that's important to own your own name now it gets a little weird for me because there's five six other states of stock rows in the United States they're all women now ones in real estate in Florida I've actually called all I'm crazy and just said you know it's we have the same name and they're like what are you calling me for but it was fun then there's one other site I'd wanted to recommend it's on this if you can see my arrow I don't know if you see that but registering your used in a name across different platforms I think there's other sites that do this but this was my favorite if you put in like nm that likes is one of my sites if I put in nm net legs it's gonna tell me if there's an enemy links on Facebook Twitter Instagram all these other platforms and so if you're gonna be in a consumer market well probably business market too you want to make sure you own that too so I went out and I registered for nm net links on Facebook I own that LinkedIn I don't want anybody taking my name and using it another way so probably the sooner the better you get all of that is set up but you better know especially when you go to the city that are you Sacco connections LLC or soccer connections what's the full name you want to register it under that so the other things I have on this site or a couple books I am I've done them here great books to go to and then ultimate LLC I'm sorry the UNM level rain forest these are some of the resources they have available and they have I put in some of their workshops from before and then they have some other ones coming up so these are great resources for you to tap into I'll be teaching another workshop and they I'll just say it real fast it's gonna be up in Taos but you can pick it up here I just had to laugh everywhere I go I run into these people at SPDC and SBA and then I say oh nine out of ten businesses fail and I'm like hey guys that's bad news I don't want to hear that I'm a happy ending guy I like Disney movies so I said what's the one company that hasn't failed well our of the nine nine out of ten Mulla tell us about the one that isn't the film what ends up I did some research there's several hundred businesses that are over a thousand years old on the planet Earth so the oldest business on the planet is a Japanese company in [Music] I think it's northern Japan but they're a construction company and they have been around since 541 ad so I'm researching why are these businesses still around and so that makes for a great presentation about some of the things you'd want to build into your business succession planning maybe an LLC so you're protecting yourself that's why you get one of these things and then I also have the link there in New Mexico networking links that's my website I've got almost 4,000 links to resources you can tap into the UNM mobile rainforest has a resource directory - great resource it's got the five categories so lots of ways to connect into our community and then Mexico economic development department they have a resource directory - and then Larry I put your name your name on there on the bottom of that page in case somebody wanted to tap into you as an attorney going forward in the future oh that's okay I didn't ask for your permission to do that I appreciate it Kate can I mention one or two things real quick Stacy let's do it yes one is I was going to suggest I don't know if you wanted to add this to your list or not but I think it's pretty fun pretty important for new businesses what is commercial insurance and at the very least a general liability policy and if anything else talked to a commercial realest insurance agent to figure out what kind of policies are covered you might need depending on the kind of business you're in that is something that should probably be done sooner rather than later although I think forming the company should be step number one as it relates to the trademark I thought that was really good suggestion about doing the name check there's Stacy one thing I wanted to bring up that I get over and over again on a daily basis is people generally tend to look for the exact match and what I want people to know is it's not an exact match that matters if there's a pre-existing trademark out there and the example I give is somebody tried to trademark it was a name similar cubed Rojo and that was declined for trademark infringement against Redbox and so if you think about how does red box in cubed Rojo how are they the same from a trademark perspective and that the answer is we care about similarity in look sound or meaning and the reason you want to figure this out now is you don't want to go and buy product and inventory and domain names and spend money on branding when your brand might actually infringe on a pre-existing trademark so it does benefit you to spend a little bit of time to make sure that you're in the clear with your name on similarity in look meaning and sound so my comment about like this list here a business name serves when I went on there I didn't put in saco connections LLC or I just put in saco just to see what shows up and if it's it's gonna be part of a bigger name and that's one like I say if you put in saco it's gonna send you to my brother and sister and anybody other in our family that owns a business in fact it looked it sauce sockos splits out into other words so it gave me a whole list of different names that were close there wasn't the same and it wasn't like what you're probably describing at this red box and a must add something it was fairly familiar so then you would be infringing the the point is is that you want to do as much research in my mind before you start your business looking at your name because it's going to play out and everything the business cards what website you buy your Facebook page so you want to make sure you've gotten ahead of any potential competitive issues a Susan how are you discussion is right because Google sells every search and there are people waiting to hear what you're going after and you if you search on you name you thinking I'm using somebody may buy it and now you're gonna pay fifteen hundred three thousand four thousand dollars for so I'm for everybody that's here Susan Cornelius is one of our other instructors and mentors at the Lobo rainforest great resource also write her name down and come down some of her workshops cuz she's done a great job on how to get started she just did a workshop this last week I think you're doing another one coming up no I'm all done for the so if anybody wanted to get a hold of you what you do consult I don't you know I didn't know the rest of that story about how you help the community do you you have a consulting business solutions I work with tech companies taking them from preliminary start up to their first round of funding right now I am really focused on working through AI core which is the innovation or for UNM under an NSF grant and for the university program at UNM Valencia and that is where I'm doing a lot of work well I'm so happy it came on board I was going to send you an email so if you're available come join us now too I want to do to honor Larry basic bottom line business things they need to take care of so I'm here thank you well in fact I've heard this student in the same story where somebody said they put they did some research on a name and the first time they looked it was out there under one of these outfits where you can buy the name and then they waited a few days and when they went back somebody bought it there's that story I've heard that story and so Larry's names at the bottom hey I know he'll come in here and there but I would certainly encourage you to create a relationship with the lawyer at some point when you start your business and in particular I'm gonna do a little commercial for you Larry it's just Larry's backgrounds been really focused on targeting small business so he's not paying me to tell you that not just but I know what's that I said thank you and citizen to wonderful resource STC wonderful restore supposed to be going to get a patent all that so Carol and Cecilia over there great resource so I'll go back to my second page of my slides which again are available anybody's joined us since we this is from SBDC and scored originally gave me this I actually followed up and went up to when you get an LLC there's three ways you can buy them you can go online sign up for its $50 well you complain when I worked at West because they'd say oh it takes months to get your thing in the mail so one of the people I was working with signed up for an online and she got it a week about a week later so I don't know where that it's the usual complaint that the government's not following up no they are following up and I was very impressed the other one way to do it is to get online and then you can push a button and order it so it's sent to you FedEx that's $100 for two-day delivery and then $150 to get it that day so because I wanted to
see what it was like I went and drove up to Santa Fe went to the office and I paid the hundred fifty bucks and I filled out I have the documents here which are on these sheets it's the articles of organization and the rest of the forms I had to fill out it wasn't a lot but then they printed out this which is my LLC certificate so I'm I'm ready to go but they've got done in about two hours it was fun actually I got up there and all the clerks that were helping me were my previous students so they were giving me a hard time like what are you doing up there I'm like what are you doing up there so I had about an hour to wait they sent me across the street to a great restaurant we can get green chili cheeseburgers so if you really want it you want to spend extra money you know you can do that you can also go to a lawyer like Larry and they'll do all this paperwork for you I generally for most of the things I do that are legal and especially accounting the rules change so damn much I usually go to somebody to have some of this stuff done for me there's a price you have to pay a little bit extra but then I know I'm getting some inside information and their take they're tracking what's going on with the legal aspects of this more than me so not that it's not that kind it's not really that complicated so first thing you want to do is do some research make your name make sure your name is not being used or you're not infringing on someone else's name as Susan was saying I'd be careful of going to a public website like Google but you can go to the States Secretary of State that basically manages the LLC documentation so the next sheet I have here is a similar type of list I had saved this from when I was at West they take even a sort of a bigger picture look at starting the business but I liked so they'll space you know writing business plan West has several business plan templates you can use they also have one of my favorite things that I helped out with knows there we were helping people do the financial side into their business so they were doing you know cash flow and then an income statement balance sheet the problem is those end up in separate pieces of paper or several reports so in West we created a template you can download that has all of those tied together now Larry said something that I thought was interesting I think like right now there's a big problem of course with people having to shut down their businesses because of the distance being and some other issues were very independent well I've wondered you know an LLC part of the reason why you get one and I'll go in a minute is to protect yourself and give you some a little bit of a veil of somebody wants to see you they're suing that the LLC not necessarily you know they could break that veil if you're not following some of the rules but having LLC gives you some protection but I think the other thing I went through about five videos on how to create an LLC last night and boy oh boy everybody's pitching the idea that you should have insurance and that might include business interruption insurance so Larry I don't know if you wanted comment on that but I was curious about that the business interruption insurance it doesn't replace an LLC in any way shape or form I know it doesn't what I like to say is it's almost like a you know like birth control no one mechanism or thing is is perfect and what you want to do is have multiple layers of protection and with an LLC what I tell people is treat it like you're having a child a baby and that baby is now going to be the business and it's a baby it can't sign its name so you're gonna do that on behalf of the baby but you want to ensure that child you want to have contracts in place I did want to mention even though you've formed you can form an LLC yourself with the state the state will not give you an operating agreement and that is a statutorily required document and you can think of it as a partnership agreement between the owners and if you're by yourself it's considered a sole member LLC and the operating agreement isn't that important but if you have one or more partners you absolutely want to have an operating agreement that should be one of the that is a bullet list here in my opinion but insurance would be another form of protection and it's interesting you know business continuity insurance disaster recovery there's a number of different types of policies out there depending on what kind of business you have and what you're trying to insure against another really important form of insurance is key man or key life insurance and what that does is it's really a life insurance policy against one or more of the owners and so if you lose a known or heaven forbid through a death or incapacity you can the company can get an injection of cash to either help buy off the estate of the deceased owner and/or use that money to hire another key person in the business so that you don't have any interruption that way Susan did you ever comment yeah I'd love to hear anything yes they do [Music] so our background is engineers assists and we get practice insurance through the I Triple E which is an international engineering Association they work with several insurance companies to offer policies at really good prices and those are practice insurance both personal liability and liability in terms of your company ApS American Physical Society which is for physicists so the suggestion is if there is a student if you're a student and there's a student version of your professional societies you're gonna belong to when you graduate talk with them as a student entrepreneur about insurance and then talk with them if you're not a student entrepreneur about insurance because they typically work with the big companies and they offer because they sell so many they offer the insurance policies at a discounted rate for the members that's an excellent idea yeah work through some of your organizations that are part of your industry you know the other thing I think you mentioned alaria it's kind of like with anything in insurance you sure don't want he after the fact trying to buy insurance so you want to get it early we used to I used to laugh I shouldn't be laughing but when I was in Orange County my god if we ever had an earthquake and I worked at Transamerica insurance at their national corporate headquarters and we'd get these calls right after to the after the earthquake oh my god can I buy insurance like no their earthquake already up in you know you can't buy it after you have to buy it ahead of time so it's kind of a bet on you know it's gambling in its own weird way but you certainly don't want to gamble your whole business because something happens and you didn't think ahead to think about what this impossible outcome so getting insurance his pardon parcel this whole idea which I'll go through and then and why you again an LLC there's a reason but it's really about protection and about strengthening your business supporting your business so if something happens you have a legal recourse so any other comments Larry you touched on something else you didn't say it I don't think piercing the corporate veil that is that's really in LLC if you operate through the LLC and what do they mean by that the LLC is doing business so for example you lease a premise or a space you want the LLC to be the tenant not yourself and because if you're yourself as the tenant then you're responsible to the landlord personally if you have the LLC as the tenant then it's the LLC's that's responsible I'm not talking about personal guarantees by the way that's a separate issue but you want the LLC to be the named party in various relationships when you do that if there is a problem then the LLC gets sued not you personally there is an exception to that though called the the doctrine of piercing the corporate veil and there's a number of different ways to do that it's really hard to do but the two most common ways to do it is commingling funds which we don't have to discuss too much but you can google that or on DuckDuckGo excuse me go ahead was gonna say I definitely encourage my students when they start a business is keep you know you have a business account that's separate from your normal personal checking account so then you if you're paying for anything you actually how would I do this you might actually write a check on your wow this guy sound weird but you make sure that all the final payments through the business at all so that's where the final check comes right that's right that's right well if the business needs money you can certainly loan the business money exactly but you don't want to do is have the business writing personal checks so lights your mortgage your cell phone stuff like that groceries you don't want your business to do that and if your business needs money don't write a personal check for the business the second way that piercing the corporate veil happens a lot is not following corporate formalities and what does that mean well that's back to the operating agreement again and if you don't have an operating agreement you got to look at the statute and so unless everybody here is familiar with the New Mexico limited liability company Act in the requirements of that Act you should have an operating agreement that you can refer to it controls how you manage the company such as how you borrow funds how you let members come or go how you indemnify people that would be in the operating agreement and if you don't follow that then you can open yourself up to a piercing the corporate veil argument by epsilon if so let me go to the next slide here because I think it starts to speak to some of that well there's an I'm sorry a couple more slides I'll just say this real fast there's lots of different legal structures for a business this is rate out of one of my books in my new venture strategies class of course the bottom one is limited liability limited liability why do you want to do it is because it gives you some liability so if somebody goes to sue you like Larry was saying you're basically in taxed once if your Inc or incorporated then you have I think there's two tax levels and there's less rules then I know one of my buddies has always given me a hard time saying you should be an S corporation but when I looked at his accounting it's a lot more complicated about all the stay in LLC for that reason but there are other things that here's another description of comparing the different kinds of legal entities and the LLC is the simplest of all these interesting enough rather than sole proprietor not being a LLC but I think that LLC gives you that additional wall in a way if somebody's going to sue you that they'll sue that which is why you want to do all your business under the name so my AC can I mention a couple of quick things on that area you go back to that slide real quickly yeah if if I were to summarize this I'd say there's three types of entities one is a nonentity which would be a sole proprietorship or partnership and that's just you're doing business and there's no structure to it and there's a lot of liability that can attach personally the other two types of entities are corporations or the LLC or limited liability company now a lot of people get confused because people will talk about C Corp or corporation or escort yeah that's really a tax status so you can have a corporation or an LLC and either one of those can be taxed under subchapter S or subchapter C the LLC is a little more flexible because you get two additional tax statuses with it you can have what's called disregarded if it's a sole member or it's owned by just a husband and wife in a community property state like New Mexico and that would be like a sole proprietorship you report all your income on your Schedule C the other option you get with a limited liability company is a partnership and so the partnership is a form of pass-through income like an S corporation is but there's different tax rules that apply S Corp is really the most popular for a multi member or multi owner company and when you talk to an accountant in an accountant says S corp make sure you ask the accountant are we talking about a corporation or an LLC and usually they're not talking about either they're just talking about the tax status well that's they kind of alluded to that one of my friends owns these guys he's set up as an S and I guess he makes more money on the back end it's it's less the way he's figured it out is it's lower tax so he's always giving me a hard time and then I said well wait a minute okay I'm listening show me what you do and then when he showed me all the paperwork I'm like what I mean it was craziness now whole nother level of accounting and you know I'm teaching I've got 20 things going so to me that just seemed like a big uphill battle for not a lot of money well you could say 15.2% on self-employment tax so it really depends on how much money you're making and you can add up yeah in this case I own that my my business on the side is part-time extra work it's you know consulting so it's not gonna be a lot but for somebody that's that's their main company well you might want to shop around or look at all these different options and in terms of legal structure and again I would probably call somebody a legal lawyer or some outfit where they can give you some very specific updated laws in terms of what your options are because again and you can speak to their Ellery do these laws change quite a bit or they they're not staying the same every year right oh no they change a lot although the tax rules are really where the big changes are like for instance Trump's 2017 Tax Reform Act that didn't really help professionals like lawyers like myself but it does help in a lot of other areas depending on where or how you spend your money those rules are changing very frequently and then of course we got the PPP funding you know the Paycheck protection program with the SBA and believe it or not there are some tax issues there even though they say that it's it's could be potentially forgiven and potentially not reportable as income but it's not for sure thing so that's fine I was surprised when they said that in fact we had a lot of people coming to me as the head of the Small Business Institute and saying can we get student teams to consult on this for small businesses and I'm like no way no spur we'd be reading what we're you know they're putting out but I don't want to have any student liable for that I think you've really got to take all this stuff to the next level it pays to have somebody and you're on your team that knows what they're talking about something so this was I thought the good part of the one thing I found in my then the other thing I did was back to this articles of organization I have mine for my group my business but and I was going to put them on here and I thought well wait a minute I've got all kinds of numbers on their social security ein and I thought I didn't want to necessarily share that so I just cut it up and said here's the typical things that are on there you create this articles of organization to say how you're gonna run your business and by the way you mentioned partnerships and I thought I better say a lot of people are starting partnerships which is great there are couples whatever but when I was at West again boy we had horror stories about people starting a partnership and then not getting agreements about who gets to paid what if something goes sideways who's supposed to be responsible for this or that I even started a partnership at the at Pepperdine rose in college and my buddy and I started a little business well it's pretty obvious right in the beginning of it he's getting all the money and I'm doing all the work at least that was my opinion so I bought him out we're still and I said I'm gonna be your best friend forever but we need to not run a business to get there dude so we didn't do that but now in retrospect I think we could have done very well if we had put everything in writing so having as much as you can you know just having what are the parameters in terms of what who's doing what and how people get paid and then the whole chain of events that might happen you've t
ought it through so you're not all of a sudden six months into it going why am i doing all the work there that's exactly right I think there's three reasons why I don't think anybody should do a partnership ever and reason one is what you said there's as things get better or if they get worse then you have finger-pointing friends family members start fighting with each other it's unless you write it down and have a formal mechanism you're just asking for trouble the second problem is liability if your partner is driving somewhere in furtherance of the company and gets into an accident and hurt somebody you're personally liable for that even though you had nothing to do with the traffic accident and then the third issue that a lot of people don't think about is is something happens to one of the partners and they become you know they die or become incapacitated the partnership dies immediately upon the death of either part so ceases to exist and creates all kinds of problems with assets and bank accounts and contracts and so on so I do not encourage a partnership at all well so you know because I would say that at West I'd have people come in and I go oh you know let me see your what you've got in writing and then we try to work this out and I'd say go see your lawyer make sure you're cool but then I'd look outside and I go wait a minute you got companies like Google these three four guys started this thing you've got all kinds of interesting stories all of this throughout this country where people have started these businesses and they're doing very well and I'm like how the heck are they doing it and you've got little companies in New Mexico that are exploding you know or imploding one way one direction or the other so I thought there's got to be some mechanism where that seems to work I just haven't figured it out so I mean maybe you've seen it I cuz I always would discourage people from doing a partnership to and that's the same with LLC you can get an LLC partnership or court and I would be uh I just you want to go in with your eyes open and you want to have things thought through and does that make sense yeah absolutely what I tell people is if you want to have a partnership that's fine just do it under an LLC it's very inexpensive easy to set up very formal but just an informal partnership and you got to be careful because in the state of New Mexico it's called a de-facto partnership the moment you have two or more people saying hey that sounds like a great idea and somebody goes and does something research goes talks to people it's in furtherance of a partnership you have a de-facto partnership and you are now liable if somebody gets in a traffic accident or there's another problem so we've got about twenty minutes you just cut to the chase on a few little parts of this that the first couple pages of this talk about you know where do you get your LLC there's the three ways you can pay the $50 do it online wait a couple weeks you'll get your paperwork you can get it FedEx to you for another hundred dollars and then or I think it's $75 or is that oh no it's 50 more dollars so it's a hundred dollars for two days which is FedEx and then $150 if you wanted that same day which is what I did and they were very great up there and Santa Fe very helpful but you know that's all depending on what you're trying to do probably what I'd recommend is the $50 and just get it sent to you you'll get it once you've established your LLC as part of that you need to have this articles of organization I have another document I'm not showing you that is much more detail about when we meet as a board who's on the team who's managing this and then that becomes the third piece of this which is and so these are this is my paperwork and then I filled out when I went to Santa Fe just to show you it's basically you know certain it's basically that same list who's the designee what's the address etc what's your name and then this is what they sent me to say you're you're a company the other and then here is those resources the other piece of this is that and I've met as a board outside running the business where I've brought in basically I documented what I've done my finances and then I work with my wife and we have a meeting and then we have minutes of that meeting so that we look like a legitimate company well we are a legitimate company but there's a piece of this that you have to remember that once you start an LLC you need to do some additional people for work that infinitum going forward that has to happen or the LLC gets a disqualifying so any comments on that would be an interesting familiar about the follow up and what do you do to maintain that LLC well in general it does whatever your operating agreement says in terms of having annual meetings fortunately in New Mexico there is not a reporting requirement if you have a corporation you would have to submit what's called biannual reports that most people forget about and then they close the company and then you got to pay an outrageous fee to get it reinstated fortunately LLC's don't have that but whether you go by statute or operating agreement you should have an annual meeting at the very least and then if you're going to do something important borrow a lot of money buy some real estate sell a significant asset bring on a new member you should have a meeting in a vote on something like that and then what you do is you write down some sort of corporate resolution what did the members vote on what did they decide just document that and put it in your three-ring binder for the company so you have this history of the company that's really what you need to maintain it and then oh yeah my reminder but yeah your what was interesting was I thought when I first did it that I had to report all this stuff because I've you know worked and major companies and no against the state and that's part of the money that's such a great program is that you have the benefits but not as much work as you would if you were incorporated as a corporation so but you still need to document that so I have a file for all that the meetings and who is there and you know what did we talk about and it's not that substantial but it's not something I have to then send into the state and make sure verify something with them that's right and it's one of the advantages of the LLC is if you know heaven forbid you know you talked about a flood over a 90 percent failure rate bridled after three years it's not difficult to close or dissolve the LLC either a corporation big pain in the butt you got to go and get a tax tax certification you got to get what's with New Mexico Texan rap you got to make sure you don't have any Google's up state a gross receipts tax you got to get certification submitted there's a whole process you got to follow that adds cost and expense to that too so let me kind of end on a note is that the reason a lot of people were encouraging me to get an LLC originally was if somebody were to sue me you know my wife worked at Sandia owns a winery so they they sue me but they'd be going after her because that's where the money is so I'm trying to do my best to protect the family from any of that now of course I'm just a consultant so that's right not much you're gonna do this to me but the one guy I was working with he was a plumber oh he went in and fixed somebody's pipes and the pipes broke and then it flooded their basement well it killed their TV and some other furniture so he was liable for that now of course insurance would probably cover a lot of that so that's again it's about risk reward but the LLC helped protect him from some of the suits that were coming his way because in a way they could sue the LLC for what money it had but his deep pockets were somewhat protected now again you don't want to do something where they can break that veil or cut through that but I'm surprised I'm a good lawyer out there I'm looking at you learn what a good lawyer might figure our way around it but do you want to make sure you take care of yourself but that's the reason you spend the 50 bucks is to have more of a protection for your business so I think there's value in doing it I did it for myself even though as a consultant and I'm doing training and I'm not gonna have a pipe burst so I get it but depending on what kind of business you have you might want to protect yourself wrong what some of the contingencies could be you know Stacy you brought up a really good point by the way I just want to reiterate insurance that's why you get insurance but you also need to recognize or know that insurance does not cover intentional acts and I'm going to give you one example of where that was a problem for a client of ours I had a client who did flips with Holmes and so he had a rehab where they pretty much gutted the entire place yeah they hired a contractor to go and do the you know the the complete remodel and everything this home and they had a a chain-link fence surrounding the property in the Zender at night didn't fully close and lock the front gate and it allowed some kids to sneak into the property at night and one of them got electrocuted and it was a terrible situation and the insurance company said intentional act you intentionally left the gate unlocked and of course my clients like I didn't leave the gate unlocked my contractor left the gate unlocked insurance company doesn't care and so now my company is fighting with the contractor to figure out who's responsible for this but it would be really good you know if you had a problem like that to have an LLC in place to help minimize personal liability and a problem like that so what four people came in a little bit after the beginning the document we have here will be online cecilia from SDC is going to post all this and so there's it's not sort of a checklist but sort of about what do you need to do to get an LLC it's there's two or three documents you've got to put together and you want to do some research to make sure you're not infringing on somebody else's name or you're using a competitor's name and then i gave you some additional links here to check for your website and then is if there's your name is being used in facebook whatever because you want to make sure you own all that too and then i gave you a Larry's email here or website so because he is a small business lawyer here in Albuquerque Susan since we're coming to the conclusion here Susan you have anything else you want to add at the FTC we focus on designing your company most of it is tech companies okay biomedical companies and we start off with customer discovery before we're ready to launch a prototype and make any claims about what our product can do that is about the timing that we're looking at getting on your business paperwork file is do you guys concur yes oh you know you want to have well I think what's the latest it's twenty at Anderson School of Management other teachers tend to have students do a business plan and I'm taking everything I got out of your workshop Suzanne and have them do a business model canvas so I remember her name everybody that's on this call here today are on this workshop because she runs some other workshops and a huge resource so stay in touch with her and then Larry do you have any workshops coming up for anything Thank You Susan no and I should but well actually now I think about it I'm not a the ESPN channel I'm going to be on for an hour tomorrow answering business questions especially we're on Cole vid and what is a what is it an essential versus non-essential business and how to deal with PPP funds and stuff like that but other than that it's more like we just help people individually or you know and but I don't have anything to announce you know workshop wise I'm sorry you give everybody at first half hour free kind of thing and then to kind of assess where their needs are well if they're if they're related to you or rest a half hour otherwise three fifteen minutes okay and so you're on TV you're celebrity we didn't know oh yeah I'm a huge celebrity not at all delighted you and Susan shark came today and then I know Cecilia's out here from STC they're gonna do a workshop but you can pop in Sicilia about I know Craig White's doing a workshop on Cove it also will be having another one of these virtual seminars on Thursday I believe it's at 2:30 but it'll also be a zoom meeting with Craig white and he'll be going over various resources available for small businesses regarding um anyone who's been affected by cope in 1911 ah today is Thursday I talked about that earlier there's a lot of details involved in that so going to workshop like that or getting some advice on how to apply for these things is important because you don't want a part of its certain monies need to be spent for certain things and you need a document in a certain way it's a little bit of that we've still got a few minutes if anybody that's here we've got a lot of people online if you want to just unmute yourself I can't see all of you and just throw a question out we'd love to have it feel like an auctioneer going going gone any questions up there Stacey this is Dale Alverson yes can you hear me yes sir as often the case and maybe others are in the same situation back a few years ago I formed an LLC and but didn't do all these steps that you just talked about it's sort of like the horse out of the barn well phenomena but it seems to me that I could still go back and check these things out and then I'm particularly interested in this idea of commercial insurance and liability coverage I haven't had to face any issues in that regard but so any advice about those of us already one through some of those steps with the state formed an LLC but really didn't do all these other things so you asked the question is can you go back and remedy that is that what you're right right or do I need to to talk to Larry that nothing nothing is really nothing it's happened it's negative but you know in this day and age I know things can happen and I have people that are sort of working with me so I when I hear this thing about certified de facto they become partners it seems to me there's a lot of issues I have an intro so the question is how do you remedy it or do I like you somebody like Larry gana you so in and that's what I'm hearing if I'm hearing this is that and I'm guessing that you don't have an operating agreement you don't have some of those things in place you haven't met and so can you go back and sort of fill in those that gap or blanks that's probably anything oh thank you back there is that what were you're saying yeah no I think I'm sorry Stacy did you want me to answer that or Mary do you have any comments on them yeah no the yes I have some comments the quick answer is absolutely the more you could do to patch in the gaps in how you've created or set up your company the sooner is always the better as it relates to partnerships or other partners and people the quick little story I would give is I have two conference rooms in my law firm and they both have tissue paper the conference room table and of the hundreds of different matters I deal with you know on a quarterly basis the tissue paper is used when we deal with partnership disputes and partnership disputes usually come up because there wasn't a written document indicating who owns what and so if you have key employees or people that are expecting some level of ownership you probably should this is a good time to give it to them with the right operating agreement and other conditions of that ownership for example if you have to terminate somebody do you get to buy their ownership back where do they get to keep it if they haven't forbid die or become incapacitated does your company get to buy the ownership back from the estate or is the estate or family members now one of your partners so you really need to get that figured out very quickly and that I hope you don't have any disputes with anybody saying hey wait a minute I thought I was going to get 50% not 10 percent or whatever so you really need to hammer those issues out sooner rather than later before the company becomes more valuable you know and Dale real quick another comment and maybe Susan is run into this too bu
it's certainly at last and I don't mean to pick on West but it was just one of my experiences where I met two three business owners every week help them do a business plan there was a lot of people I'm meeting with different issues well one of the is it came up a lot was a Heflin gentleman come and he's been making cowboy boots and selling them for like two three years in the community I said so let me see her financials I says you don't have any taxes in here if you ever paid taxes he goes tax it was like oh my god so I called the tax and revenue department and I said hey here's what's going on and you know what if you didn't call them and you let them call you I think that's a problem or if it's millions of dollars they're probably gonna find you anyways but you don't want to make them make them to hunt you down I went to this lady up there and she said oh no thank you for calling let's go through it she spent hours with this gentleman and I on the phone figured out his fine was about $35 because he wasn't making that much but you know he had five dollars for each time you're supposed to pay was a fine and then his taxes were just not that high so it was about $50 but anyways I she was so pleasant and she actually I was cracking up she stayed after 5:00 to help us and I thought aren't you supposed to be I mean your days she goes not want to help you and I'm like what Texan revenue Dobermans gonna stay on the line she didn't beat us up she was very generous I found that in most cases if you're willing to put it all out there and say hey here's what I'm doing help they're more than happy to have you come to them and and solve that problem with them they just don't want you to try to hide anything and I don't know if that's on the legal spite of anything Larry but or Susan and if you've had that experience but I tell you for me I was so pleasantly surprised by the government and how they responded to that thing is that we hadn't had this gentleman had not put all those things in place and that's maybe not really your situation Dale but it's in that there's stuff you need to have done you didn't well okay get it in place and then just let people know I didn't know and I think you know nobody's gonna at least what I saw was people weren't beating him up they were more than happy to have that dialog you I just want to say that I've had a client to give me an example where they underpaid their gross receipts tax of approximately 80 grand and New Mexico tax and read figured this out they didn't and when New Mexico tax rent came after them they came after and for penalties and interest which was over a quarter million dollars think about that from an $80,000 miscalculation of gross receipts tax turns into over you know around two hundred and sixty thousand dollars of an obligation to New Mexico taxing rent so if you know you owe gross receipts tax you definitely want to be the one going to them versus them coming to you well I think that was my point is that you need to take proactively move on these things now my situations were always very small small small micro businesses it wasn't the other eighty thousand I'm sure that gets in a different league anybody now deal and did we answer your question no no that's very helpful you know there's a lot of things I think I need to do to remedy before I have a problem you like your earthquake analogy yeah but but just you know I am registered and paying gross receipts taxes and and there are 1099 s as a consultant through my business so there's there's cross-checking one of the things that it's a detail but on my 1099 s one of the companies I work with as a consultant included my gross receipts tax you know I them consultant feed plus the gross receipts tax and my 1099 included it so there was a discrepancy between what the 1099 said and what I actually said were my gross receipts so there are little details like that but no it's i think it's been helpful to me and maybe the others on the call to do what i need to do to make sure fill the gaps that exist thank you so for anybody else that's on line 1099 is a form you there's also a w-9 r i9 you fill out when you collect money when I do a project for somebody I need to give them my information so they report that they paid me so they can write it off as an expense well now it's an income to me so I better have taxes that tie back to that income and so they're like Dale said there's this cross-check so you know it's not Big Brother so much but they're watching and they want to make sure that you're legitimately paying your taxes on what you earned so okay you pay that's what you do anybody else one last quick question anybody in on the on the call just to open up unmute and come on so my information is going to be on this I put in Larry's website you can check that out Susan I don't have your information if she's still on another great resource Thank You Susan for coming Cecilia thank you for setting this up Larry special thank you to you for being here today and everybody for joining us there's other workshops coming up I'm certainly available at UNM my informations on the front page I also head up the Small Business Institute so if you needed a team of students you wanted to tie to or needed to bring wanted to bring in some interns I'm happy to help with some of that too so stay in touch with me on that any last word Larry since I'm looking at you know I just want to tell everybody good luck with your business and what you have going on I do want to tell you though that the kovetz situation is really just about everybody is taking a pause the the uncertainty I think if you ask what does a business need its certainty you need to be able to plan and predict and figure out where your business is coming from we don't quite have that right now and so on if I can be political I'm not gonna I'm not a D or an R but we need planning and we need predictability so if we can get that from the feds in the state maybe Gordan 8 i think that'll help us small businesses figure out when to start hiring the people back when to start committing more funds and I do want everybody to be careful in investing a lot of money at least right now I have people looking at leases and I got to tell you our recommendation is to wait a little bit until we get a little bit more certainty in the marketplace yeah that's a tough time I've been home for about a month and I'm was named one of the better net workers in the city I've had people call me and say you seen a therapist how you doing there dude like oh my god I'm not out that I'm meeting people online so it's been I've been all my classes have been great everybody's been really helpful at UNM especially STC and all they've done so stay in touch with them their websites on here also so lots of wonderful resources a lot of people here to help all of us through a lot of what's going on right now so I think Cecilia if you can you know you're I think still the host of this will end the meeting again we're getting raided our time so I'd like to end on time I always like to do that start on time end on time thank you again Larry thank Dale for your question Thank You Cecilia for helping us run this today and let's all stay in touch anything we can do to help you our information there give us a call
