Start up costs? Incorporation fees

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Hey everyone. Can you give me an idea for how much it costs for the legal fees (and associated fees) to create an LLC?

I'm new to starting a business, but it is looking more and more like that is what I am going to do. I don't even know what kind of answers you need from me to give a decent estimate. It would be to start a track day type of company.

I have a very good handle on the fixed and variable costs, but what I need is a range for the legal fees of actually creating the entity.

Also, does a merchant account cost anything to set up? I assume that has to be done after the legal entity is created.

Thanks!

 

1. <$500-$3k depending on complexity and the type of lawyer you are using.
2. Merchant accounts don't usually require upfront money to open (maybe if it is a new account and there is no sales history), but most of the time the MA's have different requirements to keep in mind: 6 month 10% rolling reserve is fairly standard and impacts cashflow directly.

 

LegalZoom will probably be a cheap way to go to setup a company, they're fairly quick too. As far as costs, bg got it. It can vary from a couple hundred bucks to a couple thousand.

 

email: rushdriven@hotmail.com
atty : john eltringham
phon: 206-650-6560

you can also do most of the leg work on line @ olympia.wa.gov for around $375.00 all-in

call john and he'll set you straight.

 

Thanks.

I didn't realize #2! Could you define in more specific terms the 6 month rolling 10%? If that does not address the question of how that effects cashflow, please explain that too.

 

The rolling reserve is 10% of your daily sales that is held-back for 6 months. This is to cover chargebacks, refunds, ect.

6 months to the day after the sale, the 10% is released. So, the first 6 months your payouts will only be 90% of your sales. After that your payouts will be 90% of your sales plus 10% of the sales from that day 6 months ago.

If you already are using a merchant account and can prove all of your figures and are in a low risk industry, you could get this reserve down to about 5%.

I'm only involved in online retail- it's possible rolling reserves are only applicable in "card-not-present" transactions. If you are opening up a storefront, this may not be standard. However, you will likely only know after applying with your MA company.

If you are e-commerce you can just accept Google Checkout or Paypal if credit cards will be too much of a hassle initially.

 

This is a Franchise type thing, so I'll add this to my questions to ask the other franchisees. Thanks for pointing this out.

This is a 95% web based transaction (with a few call in's and pay at the event type tranactions).

Cheers,