Legal Question in Business Law in New York

Re: DBA question on LLC

AN OVERVIEW so you know what you're talking about when (not if) you speak with an attorney about helping you with forming your business (YES, you NEED a lawyer):

DBA is the abbreviation for "Doing Business As." It is a county-based designation in NY. Its taxes are relatively simple. DBAs are the least formal business form -- just run your business in a legal way. However, this business form is just you doing business, and accepting for your personal self all the risks of doing business.

An LLC is an unincorporated entity that is registered with the Department of State. It is a very, very new business form in the law (NY LLC law went into effect in 1994), and it does not cross state lines well. An LLC is taxed like a sole proprietorship if it is a single-member LLC (a "member" is similar to a corporation's "shareholder") and like a partnership if it has 2 or more members. NYS collects an annual franchise tax from the LLC, but the IRS essentially ignores the existence of the LLC as long as there is only one member. An LLC drops what's called the "corporate veil": it separates the owner's personal assets from liabilities that the business incurs as long as the owner complies with proper business practice and as long as owner does not make any personal guarantys to creditors (creditors generally require personal guarantys from new businesses of any form, so the corporate veil doesn't do much for most businesses for the first few years). LLCs require some corporate-type formalities to run.

There is rarely a good reason to go out of state to form a business. By going out of state to form a business, the owner sets up for unnecessarily complex tax issues, for an out-of-state LLC not operating as would one formed in NY (especially in NY courts), and for liability for lawsuit in the LLC's state of formation.

As for giving out your home address, you're right to be cautious. You can always rent a PO box or one of the commercially available mail-reception boxes and use that as your business address. You can meet clients in alternate locations (restaurants, rented or borrowed conference rooms) until you get to know the client well.

You need to hire a lawyer to help you with getting your business up and running. There are many business lawyers who can help you out in your part of NYState. If you don't know one, call the local county bar association or the NYS Bar Association for a referral. This is NECESSARY. You are mucking around in a complicated area and you can really screw yourself up if you do it wrong.

THE INFORMATION PRESENTED HERE IS GENERAL IN NATURE AND IS NOT INTENDED, NOR SHOULD IT BE CONSTRUED, AS LEGAL ADVICE. THIS POSTING DOES NOT CREATE ANY ATTORNEY-CLIENT RELATIONSHIP BETWEEN US. FOR SPECIFIC ADVICE ABOUT YOUR PARTICULAR SITUATION, CONSULT YOUR ATTORNEY.

Re: DBA question on LLC

I wouldn't recommend going to just any business lawyer. Film law is a specialty and you should select a lawyer who has experience in this particular industry. I would look for attorneys who handle entertainment law matters on a regular basis.

A LLC will offer you more protection than if you just filed a DBA, however you should speak with an attorney to see when would be the best time to establish your business. Please feel free to contact my office if we can be of any assistance in this matter.

Re: DBA question on LLC

An LLC would probably be reccomended for several reasons, specifically liability and unless there is a particular reason, it woudl probably not be advisable to file out of state. Our firms specializes in startups such as yours, specifically with regard to film and music companies. However, we would need some more information before making a complete and proper determination. You are welcome to contact us for a free consultation.

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