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I'm interested in forming a one-man LLC in California, to do a website software-as-a-service (SaaS) business. But the more I look into it, it seems like a lot of paperwork and tax filings (e.g. filing biennial "Statement of Information"). And I'm worried that I might miss something (e.g. do I need any state/local business licenses/permits I'm not aware of?)

Are there companies that just "take care of all of it" for you? In addition to being lazy, I'm just worried that I'm going to forget to file (or not know about) some 123partXYZ form, and get into trouble.

I'm aware of "getting incorporated" websites like legalzoom.com incorporate.com and rocketlawyer.com but I can't tell if they "look out for you" and make sure you file all the papers you need on a yearly basis. Do these companies do this? Are there others that do? Any recommendations?

Am I making too much of it? Is all the paperwork and hassle not actually that bad? I'd love to hear from others who are in a similar boat, and their experiences.

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4 Answers

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It is reasonable for an entrepreneur to want some hand-holding so he can work on the business and not worry about administrative details.

The online services will not provide what you are looking for.

You should retain an experienced business lawyer and an accountant / tax advisor. They will take care of their respective areas of responsibility and, upon your request, will exchange information from time to time to keep each other up to date.

Disclaimer: This post does not constitute legal advice and does not establish an attorney-client relationship.

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Typically, companies like Legalzoom will form the corporation for you but not look out for the filings that come along. Usually, a small or solo practice law or accountancy firm is more likely to do this, as they have more resources to look out for clients on a case by case basis. In addition to a lawyer who will advise you of all of the necessary filings to form the corporation and become licensed, usually an accountant or some tax preparer is necessary to file your taxes every year as well.

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[I asked my question to a friend who's started numerous companies in various fields. Here is the gist of his response.]

  1. You can do it all yourself.
  2. You're gonna get it wrong somehow.
  3. That's okay.

Basically, he told me "Don't get hung up on the details. Most mistakes are fixable. Just do your best and make reasonable/honest choices."

Also, he said that most "experts" don't really understand all the interactions between city/state/federal/taxes/etc... anyway. In some cases, you'll call the IRS hotline and they'll tell you one thing, and you ask some other license-issuer and they'll tell you another.

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