To LLC or Not to LLC

13

OCTOBER, 2017

Nancy A Hetrick

As you start to ramp up your divorce-niche financial practice, I’m often asked whether or not CDFA® holders should get a separate LLC for their divorce businesses. This is especially relevant for those that are RIA or RIA reps as you are most likely to have the choice. However, if you are with a broker dealer that has approved an outside business activity, this applies to you too.

The short answer is YES!  You should have a completely separate business entity for your divorce practice. The main reason is simply to limit your own risk. If a divorce case goes bad and you are sued by a client, you don’t want anything other than the assets of your divorce business at risk. Also, I have a very strong feeling that the SEC or FINRA don’t need to know anything about my divorce clients in an audit so keeping a Chinese wall between the two businesses is my preference. I have 2 CRMs, 2 email addresses, 2 websites, etc.

Forming an LLC is just not that hard. There are easy online resources like Nolo.com and Legal Zoom that can do it for you for about $150. For most of us, that’s all we need.

“Forming an LLC is just not that hard.”

When you start a business, the name you give your LLC may be something you’ve thought long and hard about. Before you get too attached to the name, you’ll need to make sure it is available in the state you are filing in. If another LLC has the same name, you won’t be able to use it.

You also want to be sure the name fits your state’s requirements. Most states will require that LLC or Limited Liability Company be part of the name. Additionally, your state may prohibit some words from being used in the name, often words like “bank” or “insurance.”

“Be sure to protect yourself, your business, and your clients by setting up your business entity properly.”

You’ll also choose a registered agent and for most of us, that will be you!  If, however, you have a large firm and many employees, you can also hire out the duties of a registered agent that include filing an annual report if it’s required in your state. Again though, for most of us, that’s a very simple form to fill out and easily handled on your own.

Be sure to protect yourself, your business, and your clients by setting up your business entity properly. For more detailed information on business setup, processes, recordkeeping and marketing, consider enrolling in our online mentoring program, Business Blastoff.

0 Comments

Submit a Comment

Your email address will not be published.

Want new articles before they get published?
Subscribe to our Awesome Newsletter.

#1 trusted source for information & courses that will ensure your success as a Divorce Financial Planner.

Velocity

Step-by-Step 12 month program for CDFA® holders who want to grow & sustain a profitable business.

Two Day workshop for Divorce Financial Planners to design your divorce niche & complete your roadmap to success!

Talk to us today to discover the right solution for your specific situation.

Whether you just received your CDFA® accredidation, or you are ready to take your business to the next level, let's get started today!

We will contact you shortly to learn more about your business, and get you setup with the right support that meets your business needs.

Start Using Your Personal Retainer Agreement Template Today!

This is your ready-to-brand Retainer Agreement. When that first client is ready to hire you, you’ll have what you need to for a successful engagement.

Check your email!