Limited Liability Company Articles of Organization

In order to start a limited liability company, you need to file the Articles of Organization with the Secretary of State in the State you are wanting to organize in.  Some state differ or allow you to do online, but below is the uniform Articles.


Pursuant to the Limited Liability Company Act of the state of [name of State], the undersigned adopt the following articles of organization.


NAME. The name of the limited liability company is [company name].


DESIGNATED OFFICE. The address of the designated office of the limited liability company is [address of designated office].

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Learning From The Competition

Football teams study an opponent’s offense to build their defensive schemes, we should do the same for our competition.

The first step is to identify the competitor or all competitors in your market you want to model.  Unless you know which one you want to emulate, you can perform a Google search, review the Yellow Pages or the local Chamber of Commerce.

If the company has a website, research extensively.  Search the local newspaper’s online version for any news. Save all advertisements, whether online or mailings from the company. Jot down notes if a radio or TV advertisement and create a folder for all of this information.  Your main goal is to learn all of the company’s product offerings, pricing and their unique selling point.

If a physical product, buy it in order to evaluate.  Ask your trusted customers their opinion of the company and their offerings.  If you know of the competition’s customers, ask them what they like about the competition and anything that can be approved upon (if you get the latter, you now know how to structure your selling point.)

The next step is to do a SWOT Analysis:

Using a local tax service that performs over 1,000 returns annually as a guide:

  • Strengths – In business over 13 years and experience with H & R Block prior.  Offers a good service at a great price (average returns are $120, which is slightly below what a CPA firm would charge for the same level of service and about 45% of what H & R Block would charge for the same return.) Unlike a CPA firm, they are better setup to perform the return on demand.
  • Weaknesses – Owners are not CPAs, nor do they have one on staff.  They have limited experience in complex corporate tax returns and they cannot perform assurance services if needed.
  • Opportunities – They could increase seasonal staff and handle more simple returns. They could advertise their experience more. If the consumer is price sensitive, they have a distinct advantage over H & R Block, Liberty Tax and Jackson Hewitt at the same time having more experience at the preparer position. Due to the Earned Income and Child Tax Credits, there is a large demand for quick service tax preparers in the area.
  • Threats – Many companies that cater to the simple returns offer 50% discounts for switching to their service and refund anticipation loans at a fee.

Lastly, if the competitor is a public company, buy stock in it.  As a shareholder you will have access to forward-looking statements and they may be required to allow you access to certain records on site if requested.

Model your competition’s best practices and improve on their worst practices!

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Partnership Agreement

Are you creating a new partnership?  If so, protect yourself and assign responsibilities, create a partnership agreement.






1.1 Formation. The Partners hereby agree to form a Partnership pursuant to the provisions of the Partnership Act of the State of [State] (the “Act”) and on the terms and conditions set forth in this agreement.

1.2 Name. The name of the Partnership will be [name of partnership].

1.3 Principal Office. The principal office of the Partnership will initially be at [location or where records held], but may be relocated by the Partners at any time.

1.4 Purposes and Powers. The Partnership is formed for the purpose of [description of partnership’s business] and doing all things necessary, incident, or in furtherance of that business.

1.5 Duration. The Partnership is created for no definite term or particular undertaking, as those terms are used in the Act. The Partnership will commence on the date of this agreement and will continue until dissolved as provided in this agreement.

1.6 Title to Assets. Title to the assets of the Partnership will be held in the name of the Partnership. No Partner individually will have any ownership interest or rights in the assets (including those contributed by the Partner) except indirectly by virtue of the Partner’s ownership of an interest in the Partnership. No Partner will have any right to seek or obtain a partition of any asset of the Partnership, and no Partner has the right to any specific assets of the Partnership upon the liquidation of, or any distribution from, the Partnership.


2.1 Initial Contributions. The agreed value of the initial capital contributions of each of the Partners and their initial Ownership Interests are as follows:

Name Amount of 




[Partner 1] $[dollar amount of contribution 1] [percentage of interest 1]%
[Partner 2] $[dollar amount of contribution 2] [percentage of interest 2]%
If more than 2 partners, insert more rows in table and add.

Give description of how contributions are received by each partner. Could be cash or transfer of assets. If transfer of assets, attach an Exhibit [designate exhibit #] to the Partnership free and clear of liens and encumbrances in accordance with the terms of a deed containing warranties of title and good right to convey. All contributions are being made at the time this agreement is signed.

2.2 Additional Contributions. No Partner will be required to contribute additional capital to the Partnership without the Partner’s consent. Additional capital contributions will be accepted only if the Partners unanimously approve and set the maximum total amount of the contributions. If the Partners do so, the Partners will have the opportunity, but not the obligation, to make the additional capital contributions on a pro rata basis in accordance with their Ownership Interests. If any Partner elects to make less than the Partner’s pro rata share of any additional capital contribution, the other Partners may contribute the difference on a pro rata basis in accordance with their Ownership Interests or on any other basis the other Partners may agree upon.

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Business Structures

There are several ways to structure your new or existing business.  Some are easy, others have tax and liability advantages. Here are the basics:

Sole Proprietor

This is a business owned and operated by one person. A sole proprietorship is the easiest to start.  The only thing needed is to go to your City or County tax office and get a business license.  All income and losses are the responsibility of the business owner and the business is not a separate legal entity.  For tax purposes, the individual will most often prepare a Schedule C to go along with the 1040.  Since the assets of the business are not separate from the owner, creditors can go after the owner’s personal assets.

I would not recommend this type of business unless you are very small, have limited liability or plan to form an entity later.  If I make any income from blogging this year, it will be as a sole proprietor.


This is a business owned by 2 or more people. The partnership may be informal, but should be operated following a written partnership agreement that spells out partner control and allocation of the profits and losses. Like a sole proprietorship, a partnership is very easy to start, just obtain your business license.

Partners have the implied authority to make decisions for the partnership in the ordinary course of the business.  All partners can participate in the management and most decisions are made by majority vote. Unless an partnership agreement states otherwise, partners share equally in profits and losses.

The Partnership needs to prepare its own tax return, a Form 1065. The Partnership will not pay taxes, instead the individual partners will receive a Schedule K and add to their individual tax returns.

Partners are jointly and severally liable for the liabilities and obligations of the partnership. This means a creditor does not need to collect or sue from all partners equally, instead they can sue one partner and the business. It will be up to the partner sued to collect from the other partners.

Limited Partnership

This is a business owned by 2 or more people that has at least one general partner and one limited partner. Most often a written partnership agreement exists with this type of entity. Forming a Limited Partnership is more complicated than a general partnership since you must file with the Secretary of State in your State (see Georgia as an example.) The general partner(s) have the sole decision making authority of the partnership. The limited partners’ role is limited to voting on decisions that fall outside of the partnership’s ordinary course of business, such as the sale of assets or voting in a general partner.

Unless the partnership agreement states otherwise, both general and limited partners share equally in the entity’s profits and losses.  Like a General Partnership, the entity files a separate Form 1065 and the profits and losses flow to the individuals.

The general partner(s) are responsible for all liabilities and obligations of the partnership. Limited partners have no liabilities. Like with the General Partnership above, a general partner’s personal assets are at risk.

I have seen many accounting and legal practices, plus estates use this type of entity.

Limited Liability Company (LLC)

A LLC is an entity separate from its owners.  Like with a Limited Partnership, a LLC requires State Filing. A LLC can be managed by members or other managers that are not members.

Unless a member agreement states otherwise, members share equally in the profits and losses. Most often the LLC needs to file a 1065; however, if a single-member LLC, you can prepare using Schedule C on your personal return. I like LLCs because as long as you keep a separate bank account and do not co-mingle funds, you have less legal liability. LLCs can also elect to be taxed as corporations.

Most new corporate entities created are LLCs.

S Corporation

A S Corp is a corporation under State law, but elects to have profits and losses flow through to the shareholders for income tax purposes. S Corps are made for small businesses due to the shareholder requirements. To qualify for S corporation status, the corporation must meet the following requirements:

  • Be a domestic corporation
  • Have only allowable shareholders
    • May be individuals, certain trusts, and estates and
    • May not be partnerships, corporations or non-resident alien shareholders
  • Have no more than 100 shareholders
  • Have only one class of stock
  • Not be an ineligible corporation (i.e. certain financial institutions, insurance companies, and domestic international sales corporations)

Like with an LLC and Limited Partnership, creating a S Corporation requires a State Level filing. The entity will prepare a Form 1120S and the shareholders will receive a K-1. Profits and losses are allocated to the shareholders based on their percentage of stock ownership.

Like with a LLC, liability is limited to the corporation and not the individual shareholders.

C Corporation

This entity is different from the above since the profits and losses do not flow through to the individuals. This is unfavorable for small businesses starting up since the losses are carried forward to future years instead of reducing adjusted gross income of the individuals. My tax business is organized this way as a Professional Corporation, thus the $520 in losses carries over as a Net Operating Loss (NOL) and will reduce profits for up to 20 years. Also, if you distribute profits, the corporation is taxed since it does not reduce income and the individual is taxed as dividend income, thus taxing the same income twice.

The C Corporation files a Form 1120 annually. The shareholders are not liable for the corporation’s obligations or liabilities.

If you have any questions on the above, let me know. You may give me my next blog post!

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Legal Engagement Letter

All new client engagements should have the scope of services and fees adequately defined. Otherwise, you are inviting unnecessary risk to you or your firm.  See below for a sample of an engagement letter for legal representation:


(Client Name and address)

Dear (Client):

I’m pleased that you’ve chosen (firm name) to represent (client) (the “Company”) in connection with (legal matter.) I want to confirm the terms of the representation that we have discussed in this letter.

  1. Client

You have asked us to represent the Company in this matter. The interests of the Company and its individual officers, directors, or shareholders are likely to be the same, but if there should be a divergence of interests, we will represent the Company and the individuals will need to retain their own lawyers.

  1. Scope of Representation

Our primary task will be to (outcome desired.) I anticipate that we’ll be providing the following services to the Company: (list.) This may not be a complete list of the work we need to do, and it may be necessary for us to discuss, and agree upon, the particular services the Company would like us to perform from time to time.

We anticipate this matter concluded by (date.) As we have discussed, the first step will be for us to review the Company documents relating to the matter. We anticipate being able to complete this review and to provide you with a preliminary report within (#) days after you supply the documents to us. After we review the documents, we’ll have a better idea of the time that may be required to complete this matter.

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90 Day Plan To Quit My Job

Like so many of you, I am not satisfied with my job.  My wife is finishing her teaching requirements next week and should start working next August.  Our current monthly expenses are approximately $3,250.  Once she starts working, I will maintain paying about $2,100 of those expenses.  Working from home, I have a net margin of 65%  That means I need to earn $38,770 in revenue to break even.  Together we will make a gross income of less than $74,000 and $60,000 net of business expenses.  I currently make $50,000 now, so we should be better off.  With 4 kids, we will have very little tax liability, so her withholding should cover.

In 90 days I will start my own accounting practice.  I have not given notice yet, but June 23rd will be my last day.

I have already done most of the leg work in starting my business.  I have registered with the Georgia SOS, local county, have a bank account and tax preparation software.  I have also purchased a website address for the business. YTD I have only earned a little over $1,100, albeit part time, so sales is my top priority.  The next 90 days I will work on getting leads, contacts, social marketing and other tasks to hit the ground running in 90 days.

Please check back to see my progress.

Week 1:

The first few days have passed since my decision.  Day 2 I got a new tax client through a referral.  Day 3 my wife was offered a job next school term and I notified my boss that he will need to start looking for a replacement. Now I am committed, so no going back!  I also continued to email people for tax services, even though tax season is almost over.

Week 2:

I did not do much this week, sent a few emails and postcards.

Week 3:

My timeline has changed!  I had taken Tuesday off to handle some errands and I got a call at 8:15 am that my boss had been fired. I was shocked. I enjoyed working with him and am not looking forward to the extra workload on my part until they find a replacement. I made a bold move and gave my two weeks notice. 

Week 4:

I completed my last return for the season this week. I also sent a few postcards and emails, plus sent my Resume out to a couple companies that may have a need for a part-time controller. Nothing really promising yet…

Week 5:

Worked my last day. Before leaving, I told my employer I would be willing to work PT if needed as an outsourced contractor. They told me they would think about it, which really means “no thanks.” I’m a little nervous, but excited at the same time. I will post about my sales efforts in another post.

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My Experience With Progressive Insurance

I switched from State Farm to Progressive Insurance in February.  I did this because I got a price increase on my wife’s minivan from $52 per month to $71 per month due to rating changes within State Farm. That was going to cost me an extra $228 per year.  I got angry and decided to make a statement with my wallet. THAT IS TURNING OUT TO BE A BAD IDEA!

I had been with State Farm for 22 years for car insurance and almost 13 years for my home. Plus I have had life insurance through them and have a surety bond.  I felt betrayed. I went online to Progressive and did an online quote for car and home since you must bundle for the best discounts.  The car insurance came out significantly cheaper and the homeowner’s insurance quoted was about $150 more per year for the same coverage.  All together I was going to save more than $600 per year.  I called State Farm to give them a chance to match and they could not, so I decided to switch.

After making up my mind, I first added the car insurance.  Immediately they increased my rate from $384 to $435 per month.  The reasoning was I was in a wreck over two years ago.  I was not at fault, a SUV pulled in from of me on the highway and my car was a total loss. The other driver was responsible and was cited, but that still affected my rate. Even with the increase, I was going to save $294 per year.  I was upset, but that’s enough to still switch.

Next I added my homeowner’s insurance.  Progressive acts as an agent only, they do not provide the coverage.  They placed me with a terrible company, Homesite. I was placed in a policy and proceeded to go to State Farm to cancel my insurance.

I had always paid my home insurance through escrow; however, I made a $306 down payment and signed up for 9 additional $102 payments.  Yesterday (3/16/2017), I had a letter in the mail from Wells Fargo that they had paid my insurance premium of $1224.  I was immediately suspicious since I had set to not pay from escrow and Homesite just got double paid.  I called the company and they told me that is was to be paid through meand not escrow and they would refund Wells Fargo’s payment directly to me.  Then they told me that my policy was to be cancelled effective 3/27/17.  That is 30 days after I started the policy and I had not received any notice.  They told me they evaluated my home on 3/7/17 and I had to make certain repairs of my insurance was to be cancelled.  But, I had not been notified of this!

The problems were my right garage door had rot, my gutter was away from the house in one area and I had rot in that spot on the fascia.  I have locked and do not use that garage door and I replaced my other one with metal several years back.  I was in the process of removing my gutter, so I could replace that area of the fascia. The agent had gone in my backyard, which is enclosed with a privacy fence, and made the notes.  I had no knowledge or advanced warning they would be doing this.

Now I am scrambling to find homeowner’s insurance so I do not default on my mortgage per the contract!  

I am also worried about being listed as denied insurance on Comprehensive Loss Underwriting Exchange.  That will affect my ability to get other policies for my home in the future.  To combat this, I have started the complaint process with the Georgia Office of Insurance and Safety Fire Commissioner. There are specific statutes regarding non-renewals and cancellations.  I believe they fact I did not receive any written notice puts Homesite non compliant.

I will continue to update regarding my progress with Progressive and Homesite in the comments.

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Filing An Income Tax Extension

As the March 15th S-Corp and 1065 deadline approaches, you may need to file an extension.  Corporations and individual tax returns are due April 18th this year.

Filing an extension for your business return will also most likely mean you will need to do the same for your personal income tax return.  It helps you avoid the late filing penalty. If you expect to owe, filing an automatic six month extension does not stop the requirement to pay taxes by the original filing deadline of 3/15 or 4/18.  You must estimate the taxes owed or risk the late payment and interest penalties.

If you prepare your own return and want to file an extension, the forms can be found below.

Federal Business or Personal

Alabama Not required to file an extension form if Federal extension completed

Arizona Business or Personal

Arkansas Arkansas will honor an accepted federal extension and your due date will be the same as the federal return.  You will need to check the appropriate box on the front of your Arkansas return when you file

California Not required to file an extension form if Federal extension completed

Colorado Only file if money due. Business or Personal

Connecticut Business or Personal

Delaware Business or Personal

Georgia Business or Personal

Hawaii Business or Personal

Idaho Not required to file an extension form if Federal extension completed

Illinois Only file if money due. Business or Personal

Indiana Not required to file an extension form if Federal extension completed

Iowa No extension forms, nor does Iowa honor Federal extensions.  90% of tax must be paid by April 15th to keep from incurring penalties

Kansas Not required to file an extension form if Federal extension completed

Kentucky Not required to file an extension form if Federal extension completed

Louisiana Business or Personal (Online)

Maine Not required to file an extension form if Federal extension completed

Maryland Not required to file an extension form if Federal extension completed

Massachusetts Business or Personal

Michigan Business or Personal

Minnesota Not required to file an extension form if Federal extension completed

Mississippi Not required to file an extension form if Federal extension completed

Missouri Not required to file an extension form if Federal extension completed

Montana Not required to file an extension form if Federal extension completed

Nebraska Not required to file an extension form if Federal extension completed

New Jersey Business

New Mexico Business or Personal

New York Online 

North Carolina Business or Personal

North Dakota Business or Personal (payment)

Ohio Not required to file an extension form if Federal extension completed.  Payment form.

Oklahoma Business or Personal

Oregon Not required to file an extension form if Federal extension completed

Pennsylvania Not required to file an extension form if Federal extension completed

Rhode Island Not required to file an extension form if Federal extension completed

South Carolina Not required to file an extension form if Federal extension completed

Utah Automatic, no forms to file. Still must pay liability by 4/15.

Vermont  Not required to file an extension form if Federal extension completed

Viginia Automatic, no forms to file. Still must pay liability by 4/15

West Virginia Not required to file an extension form if Federal extension completed

Wisconsin Not required to file an extension form if Federal extension completed


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2017 Income And Finance Reporting

With the first month in the books, I still have a long way to go to reach my $7,957 savings target.

My income & savings for January included:

$150 from the Hospital. $17.18 from selling a study guide for the GACE exam online from Amazon.  No affiliate sales from Amazon yet, but with 150 page views per month, it may be a slow process.

Total receipts for January are $167.18, which I transferred to my savings account. I am contributing 100% of revenues at this time, since my expenses have been low.  Later if expenses increase, I may only be able to contribute net income instead of gross.

GIMO, my largest holding, had a bad month after a poor earnings release.  I have lost $387.91 (37.8%) since I purchased in December.

My balances today are:

Brokerage – $710.37

Savings Account – $267.64

Pepsi Co DRIP – 360.84

My income & savings for February included:

I have grossed $516.25 YTD in my tax business.  I lost $520 last year, so I have a net operating loss (NOL.)  It costs about $2,000 annually for my software and other expenses. I will probably pay myself any profits toward the end of the year after all expenses are covered.

I received my Federal tax refund.  I used to pay off my credit card debt, paid $2,000 in my HSA (spent $1,992 last year in that account, so this will most likely not accumulate.)  I also switched Home and Vehicle insurers from State Farm to Progressive to save $294 annually.  I used the tax refund to pay upfront, so I should get a $600-700 refund.  I will use that for savings along with the $693 State refund expected.

I still have not made any Amazon Affiliate sales.  I also did not have any hospital earnings this month either.

My account balances are now:

Brokerage – $754

Savings Account – $568

Pepsi Co DRIP – $380

My income & savings for March included:

I have grossed $953.75 in my tax business YTD.  I only have one more return to prepare, so this year will be another loss.  In an effort to earn more online income I plan to start creating small business and legal forms for purchase.  I have only added one to my website so far, but plan on doing several more.  The Legal Engagement Letter I created took about 4 hours and I will charge $1 for a download.  If this takes off, I will create a separate niche site later.

I still have not made any Amazon Affiliate sales.

My account balances are now:

Brokerage – $808

Savings Account – $1542

Pepsi Co DRIP – $384

My income & savings for April included:

I left my job this month, hoping to build real value in owning my own business. I have not pulled from savings yet, my account balances are:

Brokerage- $720 (GIMO continues a downward spiral)

Savings Account – $1548

Pepsi Co DRIP – $388


Brokerage- $953

Savings Account – $1449

Pepsi Co DRIP – $400

May was a horrible month for revenue, I made less than $700. I withdrew $100 from savings to pay bills and will most likely continue if I do not get more revenue.

I am a firm believer in keeping track of my contacts and using to analyze my revenue. I contacted 106 companies for audits. From that, I submitted 2 proposals. One for close to $10,000 and the other over $25,000. I sent my Resume to 42 companies for PT or temporary consulting/accounting work. I received one offer in Atlanta for 4 weeks, but had to turn down due to the first week required, my wife was on vacation (her reward for graduation) and I had to stay in town for the kids. I contacted 10 companies for janitorial services, no one responded. I applied to 13 PT jobs to help pay my expenses through January. All were entry level, so the companies probably recognize that I would not stay.

I also started writing an ebook to sale on Amazon. I am about 7,500 words in. I expect it to be 36,000 words in total.

Even with withdrawing money, my investments increased in value, adding $146 to my goal. I had to add my withdrawal back to my annual savings goal:(

Only $497,198 to go to reach my lifetime goal and $7,072.40 to reach my 2017 saving goal!

I will update this post monthly to show my progress.

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Sample Sales Letter For A Tax Service

After being in business part-time nearly 14 months, I have built my email list to 317 primary contacts at various businesses.  Finding email addresses of small business owners has proved difficult and time consuming in my area.  Several years ago (2005) when I sold insurance it was much easier.  I was able to get that information from the membership directory at the local Chamber of Commerce; however, they changed a couple years later to an online contact form and then later removed completely in order to reduce spam for their members.  I could dial, but I work 8-5 pm, so everything is after hours, thus email is the best and cheapest solution for me.  I am also afraid to buy leads, since I have not verified the contacts, addresses change and it is costly.  I am trying to bootstrap my business.

I use a form letter, but send one at a time and personalize with the names in order to get past spam rules.   The letter is very simple and quick to read.  I want everything in the first couple of sentences so the potential client can read and decide whether to take action.  Using this, I have only received 2 unsubscribe responses.  See my letter below:

Mr. or Mrs. Name of Contact,
Tax season opens Monday for efiling, let me know if I can help you prepare your business or individual returns. I also perform bookkeeping and payroll services.
Thank you,
My Business Name
My Phone Number
My P.O. Box
I work full-time as a controller for a large food service company in My City and part-time as a controller for a hospital in the area.  I am trying to build my tax practice, thus the email. If you do not want any future emails, please reply unsubscribe.  If you have any questions, please let me know.

Sending emails helped me land my largest account, the hospital.  While the hospital is very small, 25 beds, I have been asked by several people if I can prepare their tax returns this year.

My letter may not be the best, especially if you are a copywriter, so please share any samples or suggestions in the comments.  My conversion rate would be 0.3% considering I only landed one client, but if that one client brings in $2-3K, I am happy with the results.

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