A Couple Questions

[BeastMaster]

Hey guys. I have a couple questions about a business my brother and I are going to be starting. My brother and I would like to start a creative services business mainly doing photography and graphic design work. Both of us are currently working full time in other non-related fields and would like to make a change. We are both currently doing some freelance work on the side but find it hard to take on more jobs while working our other full time jobs. We are living in Florida at the moment and would like to officially and legally start our business.

There are a couple things we are wondering about at the moment. In February of next year we will be moving to New York. We would like to have this be a legitimate business so would being an LLC be best starting out and for your business type? How would this affect moving to another state or what would be the best situation for us? We would like to get this started as soon as possible to give us time to get out name out for when we move to NY.

We have also come up with a name. For this public forum I will refer to it as "Whispering Goodbye." We are concerned with name similarities. Looking on sunbiz.org a search revealed several names that are similar to ours, such as "Whispering Goodbye INC," "Whispering Bye LLC," etc. But most of all of these are listed as Inactive. I have looked on the site for NY names and there is another business with the name "Just Whispering Goodbye LLC" and has a status of active. Would this be a problem? I am unable to find out what kind of business they have if it makes a difference if the businesses are similar.

I appreciate any information or other resources anybody here can provide for me on this matter. Let me know if any other information is needed. We are very excited about this and wanted to get this started as soon as possible.

Thanks!

[vangogh]

First welcome to the forum BeastMaster. And congrats on starting a business.

One of our members, David, had a great site about LLCs (http://www.limitedliabilitycompanycenter.com/) that's worth checking out for info. Having said that you don't need to be an LLC to be a legitimate business. The easiest business for you both to form will be a partnership. Forming any business is going depend somewhat on the state you file in, but for the most part you'll fill out a few simple forms, pay a fee, and you'll have formed a partnership.

You do want to register your trade name with the state too. You can do that online through the website for the Department of State (http://www.dos.ny.gov/corps/bus_entity_search.html) for the specific state. The link takes you to the site for New York. Again there will be a small fee and you'd search like you have been to make sure the name is available. The form to register should let you know right away if the name is available.

If you look under Business Entities > Limited Partnerships in the menu on the left you can find the forms to file a partnership.

It sounds like you want to register in New York since you'll be moving there. I'm not sure if you need to be living there first to register the trade name and file any paperwork. I would think you do, but maybe there's a way to get all the paperwork set in advance. If you have an address in New York or know someone who'll let you use their address that will probably work, though I'm guessing it's not what you're supposed to do. You can change the address later when you have one of your own.

If you don't want to wait till next year you can file everything now in Florida. Here's the Department of State (http://www.dos.state.fl.us/) website. When it's time to move to New York you'd probably have to file the same paperwork again, but at least you'd be in business for a year. I'm not sure if an LLC lets you register in both states or not. David would know more and the information is probably on his site. If you can register in both states then it certainly makes sense to go that route. The major difference in filing is more paperwork and a larger fee, but nothing outrageous.

Hope something above helps.

[Evan]

The names probably are similar, and could present a problem even if the state allows the registration (which more likely than not it will).

If you had Company Inc., you could easily create Company I, Inc; Company II, Inc; Company XIV, Inc., etc., etc. as you like with little issue. Problem is, I can probably do the same thing as well... And it's when that happens that the question becomes whether it is really a unique company or whether I'm infringing on this name. Part of it will be whether you're in the same line of business, or something completely different.

As a more classic example, you have McDonald's, as a fast food restaurant. If you tried opening a McDonald's Family Restaurant, you may get a notice from the fast food chain saying you're violating their trademark. But if it was McDonald's Grocery, I think it's easier to argue that it's a unique business that isn't minimizing the brand of McDonald's.

[huggytree]

LLC is typically the best for new small businesses

what does Whispering and goodbye have to do with photography??? are you photographing funerals????????

id make sure any name you pick doesnt come up badly on websearches....if they cant figure out which company is you its a bad name.....you want to stand out....id try a different name if its too common

[vangogh]

what does Whispering and goodbye have to do with photograph

I think it was meant as an example so as not to mention the actual name in case it gave someone an idea to register the actual name.

[huggytree]

i need to spend more time reading i guess....i skim over posts too much

[Business Attorney]

An LLC is often the best choice for a new business, but there are many subtle factors that come into play. For example, in forming an Illinois LLC (http://www.limitedliabilitycompanycenter.com/illinois.html), the filing fees are substantially higher than for a corporation. There are also tax planning reasons to consider electing to have the LLC treated as an S corporation (http://www.limitedliabilitycompanycenter.com/llc-electing-s-corp-status.html) which might push you in the direction of forming a corporation (although an LLC can elect S corp status).

If you form an entity in Florida, there are two ways you can move to New York and still use the same entity. The LLC or corporation could remain a Florida entity and simply qualify to do business in New York. That means, however, that every year you would have to file annual reports and pay fees to both states. The alternative is to change the state of organization, typically by merging the Florida entity into a newly formed New York entity. For tax purposes, this is called an F reorganization (if the entities are corporations). The resulting entity is treated as if it were the original entity.

A third choice, if you are very certain you are moving to New York, is to form the entity in New York. While you are doing business in Florida, you would have to qualify to business in that state but once you leave, your entity could withdraw and you would be back to filing only one annual report and paying one fee (to New York).

These are just some thoughts for you to consider as you read various materials and make your decision.