Hello and welcome to episode 162 of Design Curious Podcast.
I'm your host and mentor of Rebecca Ward.
Today on the podcast, I have Jonathan Feniak as a LLC
attorney and he has some really good information.
Let me tell you a little bit more about him.
Lead Attorney Jonathan Feniak is a driving force behind LLC
attorney.com with a mission to make quality legal guidance
accessible to business owners and individuals across the
United States. Specializing in asset
protection, estate planning, and business formation, he provides
practical solutions that empower clients to protect their assets
and build strong legal foundation.
Before becoming an attorney, Jonathan built a dynamic career
spanning operations and financial services.
As a leader at DHL in Manhattan, he managed daily operations
through the challenges of 911. Later, he transitioned to
finance, gaining expertise in deal structuring and asset
management with Wells Fargo Advisors and boutique investment
firms. Admitted to practice law in
Colorado and Wyoming, Jonathan combines this rich experience
with legal expertise to help entrepreneurs in diverse
industries and activists protecting their causes.
He previously worked with legal tech startup Term Scout and the
law firm Louis Best Williams and Weiss.
We have a great discussion about LLC incorporations or sole
proprietorship and how to form your business, what you should
be doing when you start out, if, when you should change it.
So you're going to want to listen in.
Let's get into it. You're now listening to Design
Curious, a place where you creative one, are here to learn
about what it really is like to be an interior designer.
And I'm your host and mentor, Rebecca Ward.
If you're worried about how to succeed in a creative career, if
you're ready to learn your next steps to become an interior
designer, and if you want the satisfaction of doing something
you love every day, you are in the right place.
Grab a coffee, a notebook, and let's dig into today's episode.
Hi Jonathan, welcome to Design Curious podcast.
It's great to have you here today.
Thank you very much. I am super excited to be here.
Design is near and dear to my heart, so I'm looking to really
helping your listeners understand the the legal parts
of running starting a business. Right.
Yeah, we were talking offline about how really close you are
to the creative industry and interior design in general.
Do you want to share a little bit about all your what you're
surrounded by? Yeah, yeah, this is this is
true. So my sister-in-law is an
interior designer in Denver, Co. My brother-in-law is an
architect in Denver. My sister is an architect in DC.
My father-in-law is an architect.
He doesn't practice anymore. My wife is an artist, Meredith
Finiak. She works with interior
designers as well as architects to do sort of large scale mural
installations is her focus. But she was a botanical
illustrator. So she's actually working on a
project in just about a month in Denver for a sort of a remodel
of a public building. And then my son is an artist as
well, Nathan Finiak. He graduated from Cooper Union.
And so artists and designers and creators are all around me.
I'm a lawyer. I don't have a creative bone in
my body. I think about things creatively,
but I can't put pen to paper on anything.
Yeah, well, I guess some people would say lawyers have to be
creative too. You know, not too creative.
Our arguments and yeah, but why don't you tell us then your
journey about the non necessarily non creative side of
becoming an attorney? Yeah, and she started out
English major undergrad was in transportation and logistics,
UPSDHL, got an MBA, worked in finance, was a financial
advisor, a securities broker, stockbroker, as well as working
with high net worth. Didn't graduate law school till
2019. So I'm 50.
You can't see the Gray up here, but I'm 50, two or three.
It's always hard to remember. Maybe I don't want to remember.
I became a lawyer much later in life and focused on, you know,
how can I do something different?
Did not want to be the standard attorney.
And so me and a group of other entrepreneurs, lawyers, those
were the business spirit. We created LLC Attorney LLC
attorney.com to make it easy to form LLC or corporations but get
the guidance and advice you need.
We're not a law firm, but we do everything is has been created
by attorneys. Our website has an amazing
amount of information. We've got our LLC Attorney
official YouTube channel where I do videos for folks like your
listeners as well As for others, whether you're in real estate or
whatever else. And so trying to really, really
democratize legal services in a way that make it easy to access
and you're getting what you need.
It's really hard to tell. Is it something that I need or
is this being just sort of sold to me right.
When I go to a mechanic, I don't know, I'm not, I'm not
mechanically inclined, you know, not not good with my hands.
My mind is pretty good, but not good with my hands or, or a
creative thing. But when they say, oh, you're
going to need new brakes or you need a new air filter or
whatever, I don't know if I actually do or they're trying to
sell me something. So we want it to be with LLC
Attorney Calm. If it's there, if it's offered,
it's something you probably need now or are going to need in the
future. So try to really focus on
delivering real value to the customers.
For LLC attorney, I also do consultations.
I have a law firm and do consultations with folks who
need some more guidance on more complex topics.
We have a bunch of different attorneys can help, whether it's
intellectual property or trade marking or tax and so on and so
forth. So tried to really democratize
LLC's and legal services. OK, Yeah.
So you are pretty much an entrepreneur yourself and
surrounded by entrepreneurs. So that's kind of the focus then
of your services for. Yeah, it is.
Yeah. It is over 100,000 companies
formed and you know over the course of a year I talked to
one-on-one, the last year is over 1000 individuals or
business partners, helping them understand what it is they need
to do, when they should start their company, what they should
do with it once they do form it. So I really have my ear to the
ground and our company is trying to meet that need, forming
several thousand LL CS a month for our customers.
OK, well, let's talk about the journey and kind of what
typically happens and what should be happening maybe when
you're forming a business. Like my story.
I like so many designers who have their own business.
Had a friend asked if I can help, you know, with their
living room. And so I said, yeah, let's do
this. And then I was like, well, I
want to do it legitimately because I was interested in
starting my business. And so I went and got a business
license and set up as a sole proprietor.
I didn't even really think about consulting an attorney for
setting up my business. I knew I needed ACPA, but I was
a sole proprietor for a long time.
Maybe you get. CPM We're not on video, so I'm
making faces. I'm saying yeah, you know,
whatever else, but. It's like, yeah, maybe, maybe.
But yeah, I'm, I'm sorry to interrupt.
Yeah, no problems. Well, I was going to turn it to
you because I think a lot of designers do set up as sole
proprietor first thing. What are maybe is that OK or
should should we really just go to LLC and now I'm set up as an
S Corp. I never did an LLC.
Awesome. So tell me then, what what would
you recommend if I was starting way back again all over, What
would you say to me? This is the typical path, right?
And I was listening to one of your other podcasts with, I
think it's Bree Hance with Enhance.
Her path was the same. You get asked by someone, hey,
could you do this? I know you've Got Talent.
You did your own house. I admire your house.
Can you do this for me? It's a friend.
In that case, you're like, sure, what's your risk, right?
That's really where the what this comes down to.
What type of protection do you need?
A friend, You know, you're not hiring subcontractors, you're
not going to be doing anything where there's a danger that it's
a load bearing wall or so you know, something to that effect.
The downside is really low. There's always some way that you
could get sued, right? But when it's a friendly person
and you're doing it for, you know, sort of a just to get your
feet under you, I don't think you need an LLC at that point in
time. Your protection that you need is
there's almost no risk. I want people to match the
complexity of their structure with really what the real world
risks are of them engaging in this business.
And as long as you're not stepping over those, those sort
of bounds, you're not getting into construction.
If you got a design build firm right or you're working with
contractors, there is more liability associated with that.
If you're working with an architect, the architect has the
majority or the engineer has the majority of the risk there.
You you pick out a wrong color, you pick out something that
they're not happy with or they decide.
A lot of times that I've seen with my family members, they
enter into the agreement and then their financial situation
changes and then they don't want to pay, right?
Not because they don't like what you did, but they come up with
reasons not to pay. And so most of the risk though,
in this business is really contract risk.
You've got contract risk that they don't perform on the
contract. They accuse you of not
performing on the contract. And when you're starting out
with friendly small dollar deals where you don't really have any
money on the line, you're not going and buying the furniture
and those things fronting it and then looking to charge and
collect from them, the risk is super low.
And in those cases, I think a a structure where it's just you.
Hi, I'm Jonathan. Hi, I'm Rebecca.
I can do this for you. You're just going to cut a check
to me, right? That that's fine then when you
start taking on you bigger projects, you've got contractual
risk, you are hiring subcontractors, you have
potential where you're working with designers or or I should
say architects or engineers where they are going to look to
come after you in some way if something goes wrong right every
the blame tends to run downhill. And so in those cases, we think
about it from the perspective of how much risk am I taking on?
And then like, what could go horribly wrong?
And I have to say, I'm maybe I'm fun at parties, depending on who
who you're with, but people are always dying, getting injured,
getting sued, and every the conversation I have.
And that's the way my mind works.
Maybe not fun for my family, but for, you know, my people I'm
talking to as a lawyer, they appreciate that, right?
And it's up to you as the business owner to evaluate the
risk. But those first couple of
projects, getting your legs under you, does this thing work?
I think you could do that in your name.
You don't even need, don't even do a DBA.
Don't worry about an EIN number, just doing your personal name.
Then you start saying, all right, these are larger
projects. I've got more risk.
And if you're working with a in anything that's commercial,
they're likely going to require you to have insurance of some
sort for your, your subcontractors, for the
independent contractors you bring on the purse, who's going
to hang the wallpaper or, you know, be doing some woodwork,
insulation or something else. In that case, insurance is
great. Insurance is the first thing and
it should be even before an LLC. If you're working in as an
individual, get insurance. There's a company out there.
I, I like, I don't have any affiliation with them.
They're called Thimble and Thimble is really cool because
what they allow you to do is get insurance for a specific
project. You're doing 1 project a month
or one project 1/4 when you're first starting out.
You can get it for just, I need the insurance for this, right?
Very cool. And they also, they do it in all
sort of funky industries and so on and so forth.
I, I recommend checking out Thimble and, and my wife, I had
said she's an artist. She's working on this project in
Denver within the next couple of months.
She does very one project every year or so.
And so for her get that insurance.
She doesn't need insurance over the entire term.
She needs it during the period that she's there on site.
So think about where your risk is and then definitely
insurance. And then we start saying, OK,
when does an LLC make sense? Well, when you're getting into
these contractual relationships where the liability potential
outstrips your insurance potentially, or there's
something that's not covered by insurance, insurance is
typically going to cover things like liabilities.
Someone gets hurt, they slip, they fall.
But to have like you made a mistake on picking out something
or something fell down and hurt someone.
You installed a bookshelf, had a bookshelf install it fell on
someone, something like, again, the terrible world I live in,
someone's always getting hurt. So in that case, you say, OK,
LLC makes sense when this is becoming something substantial,
substantial of your time, substantial amount of liability
and forming a business entity. And I say LLC because 95% of the
time and in this space, I would say almost 100% of the time, an
LLC is the appropriate business entity.
Having that LLC where the LLC is the one that's taking on that
business risk. It enters into the contract with
the homeowner, with the business owner, with the architect, with
the engineer, and it is the one that gets sued.
That is what we want to happen. That's what LLCS or business
entities do. They limit your liability.
Now, whatever's in the LLC, if you take $100,000 and put it
into your LLC or it has $100,000 sitting in the bank account, if
that company gets sued, that $100,000 is subject to those
claims. But that's it.
If you do it right, you respect the entity, then they can't say
we're going to go after Rebecca as well.
We're we're going to limit our liability to that business
entity and it's an agreement with the state.
The state says we'll let you to foster entrepreneurship, to
foster businesses. We'll let you limit your
liability, but we need to make it easy to sue you.
And that's where your registered agent comes in.
That's where the filing with the Secretary of State, you say, OK,
anyone who wants to sue this company, you can look at the
Secretary of State's site and it says serve the legal papers here
makes it very easy. That's the trade off.
If someone wants to sue Rebecca and then you just showed up,
they don't know where you live or whatever else.
Maybe you're, you've kept your information private.
It's hard to sue you, right? You have to we, we watch movies
like you've been served, right? They come in and they, you know
what, wherever it is at your workplace or whatever.
So that's the role of the registered agent.
And you have to, under state law, you have to identify how
can this company be sued? It's our business part of LLC
attorney forming the business entities is also serving as a
registered agent. And some people have list
themselves as the registered agents to save a couple of
bucks. The problem is if you have an
office, then you have someone potentially suing you.
All your employees know that you're being sued now and that
can be negative or someone could show up at your house, right?
If you're only your registered agent, you don't have a
business, an office location, then they show up at your house
and you're having a dinner party and you know you've been sued
kind of thing, which can be problematic.
So small price to pay for that professional registered agent to
provide that service. So then we've got the LLC or the
business entity. I keep saying LLC, but it is we,
there are two choices. The two choices at the state
level for the overwhelm, majority of people are going to
be an LLC or a corporation that's at the state level entity
type. And the way I like to imagine
this or like people to the way I recommend imagining it.
If you go to a restaurant and they say it's like a fixed price
menu, and maybe this is elitist to say fixed price menu, but
we'll go with that. And they say pick one item from
column A and one item from column B, right, Column A,
business entity type at the state level, corporation or LLC,
there's other ones, professional corporations, there's all sorts
of other ones that's not going to apply to someone in the,
usually in this business. Now, if you're an architect or
an engineer, there may be professional entity requirements
where APC or sometimes you'll see PLLC, those are professional
Corp, professional, limited liability company.
So in most cases though, we're talking LLC or corporation at
the state level. And then there's tax
classification at the federal level.
When you get your EIN, it's going to be issued by the IRS as
either a, if it's a single member LLC, it's going to be
issued as a disregarded entity. A disregarded entity
classification means that the IRS is not expecting any
separate filing from this business.
It's saying you're just going to report the income of that
business on your personal tax return, your 10:40 or your joint
10:40. There's no separate reporting.
It's disregarded for tax purposes, but it's highly
regarded for legal purposes, and that's the distinction we need
to make here. No matter what, we need to treat
the business entity as separate and distinct from us.
It's not our legal entity. In businesses where it's a
services business, personal services business like this,
that's an important thing to make sure you're making that
distinction from tax purposes. Disregarded for legal purposes.
It's not Rebecca you're working with it is XYZRW designs, you
know, whatever it is. And so you're the lead, you're
the owner, but all the services are provided through Rebecca's
LLC. So at the tax level, I, I
digress there state level LLC or Corp tax disregarded entity.
And then if it's more than one member, you're starting up a
business with your friend, then by default it's a partnership.
Partnership has a filing requirement, but there's no tax
paying requirement. It basically splits the income
into the percentages of the owners.
The next thing you can do is called an S Corp tax election.
And I believe, Rebecca, you said that you have elected to treat
your business as an S Corp. An S Corp is a special type of
tax classification. It can be an LLC or a
corporation. This is one of the things that
many people miss is that you can have an LLC which elects to be
taxed as an S Corp. You don't need to be a
corporation in order to receive S Corp tax classification.
S Corps are great when you start to really make some money
because they allow you to split your income from that business
into two parts. 1 is a reasonable salary or reasonable
compensation that is subject to FICA taxes.
FICA taxes are your taxes from earning.
That's your Social Security and Medicare when if you work for
someone else's AW2 you see it come out of your check.
FICA tax or SSI, whatever it is and then the rest of it though
is not subject to the FICA tax. FICA taxes are 15.3% in 2025 up
to the 1st $175,100 of income. You pay 15.3% on it all the way
up and then above that you're going to pay somewhere between
2.9 and 3.8% all the way to Infinity.
So if you're making good money with your business, making that
S Corp election, choosing the right reasonable compensation or
reasonable salary, then it allows you to save for every
$10,000 you're saving $1500 in taxes, which is not a bad deal
right now. Did you form a corporation at
the state level or an LLC at the state level?
Corporation. A corporation mistake?
You messed up. Why do I say that Well cuz a lot
of times and accountants will say yeah you form an S Corp,
right? There is no S Corp S Corp
doesn't exist, right? It's either an LLC or
corporation. But people here Corp and they
think they need to form a corporation to obtain that
benefit. No, it's actually the default.
If you formed a corporation at the state level and went for an
EIN number, employer identification number from the
Internal Revenue Service, they would issue it.
Default classification would be AC Corp, which you definitely
don't want, almost definitely don't want.
So you could have formed an LLC and then gotten the S Corp tax
election 'cause it's a separate they call the check the box
election. You have to file this form.
I like throwing the the form numbers out there.
I chose what I'm talking about, right?
It's like if you know, as an interior designer, you see it,
see something and you're like, oh, that's a Roche boubois couch
with this, you know, and I I'm throwing up my high end design
here. You know, Roche Boubouis couch
that came out in 2022. Like you know those things and
it shows your expertise and authority.
So there's it's form 2553 is what you file to make an S Corp
tax election. You can do that with an LLC.
Why have an LLC over a corporation?
OK, this is the heart of this thing.
LLCS are just easier to administer and they have
superior asset protection. So a corporation has
shareholders, it has a board of directors and it has officers.
And each of those you have to the shareholders need to vote
for the board. The board then needs to appoint
the officers. The officers have the authority
to take action on behalf of the corporation.
So you have these 3 levels. There's also the corporate laws
are structured in such a way because the, the idea from the
state level is corporations, we want to protect the
shareholders, right? We really want to protect those
shareholders. So there's you got the, when are
the meetings called? What's a quorum, blah, blah,
blah, all these different things that come into play with an LLC.
The simplest version of an LLC is called a member managed LLC.
There's just you, it's just Rebecca.
Rebecca gets to make all the decisions and there's no
shareholders or board or you are the owner and you are the one
who runs the company. And so the ability or the the
opportunity to potentially screw up and miss some record keeping
is very low. You can have informal meetings
when you just have your member managed LLC and Rebecca.
Most cases you don't have actually any record keeping
requirement. I highly recommend you keep
records, keep records of contributions to the company,
putting money in distributions, money coming out or when you
make a decision that could potentially get you sued.
And those are, you know, special meeting minutes.
We call them. You can do all of these things,
by the way, in the LLC attorney.com.
We want you to be compliant. I don't want anyone, anyone's
LLC to get sued and it does not deliver on that promise of
limited liability protection. So really easy meeting minutes
go in, I'm putting money in, I'm taking money out or making an
important decision. I'm going to do meeting minutes
for it. Put it on your calendar once a
month. It doesn't need to be
contemporaneous. It could be, you know, once a
month you do that boom and you've got 12 meeting minutes.
That is great protection for you, but it's very easy to stay
compliant with an LLC, a corporation lot more complexity
in the business structure. So I recommend an LLC.
Well, let's start the path here, right?
The path is do you need an LLC at all?
Almost no risk, probably not right?
You start having a some more risk, get insurance you can get
in your personal name. The LLC itself is it offers
other benefits than just the asset protection.
It shows that you are serious. This is not a family by night
operation. I've got a business I took the
time to form XYZLLC, Rebecca's Interior Design LLC and it shows
the other party like in a business setting, if it's just
an individual saying how serious are they?
Are they going to be able to deliver on this and LLC actually
limits your risk. What makes you seem more
professional and then use that to go, you know, you get your
website and all those things. A lot of people really focus on
the name of the LLC and it's not that important.
That's the whisper. What is important is the LLC
exists and it could be a fairly generic name.
Again, you know Rebecca Ward Designs LLC, but you want to
call it something else in the public space.
You want to present yourself in some some other way, then you
can do what's called the DBA or trade name.
And many people's sole proprietors start out by doing
just a trade name. They don't actually form an LLC,
which is fine. You can have that trade name and
sometimes you'll, you, you may want to have more than one trade
name depending on what market you're focusing on.
One of the trade names could be Rebecca's Residential Interiors
and the other one could be RW Corporate Design.
And this way you can have two different websites, right?
You've got two different websites, two different sort of
brands that you're putting out to the world.
And maybe if someone's, if you're doing business, they want
you to do corporate interiors, it may be a Ding against you if
they see that you also have this website with residential stuff
and it may be residential that may see because you're dealing
with different markets. So I recommend that LLC name is
fairly generic, still on brand, but then you've got these Dbas
or trade names, super easy to file at the state level.
And you can then hold yourself out to the public in different
ways to capture different sort of segments of the market,
different websites and so on and so forth.
And you don't have the complexity of I need multiple
companies here. It's still from the perspective
of the for the taxes and otherwise, everything still goes
into the LLC name, bank account, but it helps with that branding
angle, which is incredibly important in your business.
A question on that because I think I've been on the receiving
end of this. So when you have the one bank
account, is it the name of the LLC that's on the check, right?
So when it goes to. It is right the LLC.
So the LLC should enter into the contracts and you get the
contract you enter in with that, that other person or that other
company would be XYZLLC comma DBA Rebecca's Design.
And that's how you word it. But if someone gives you a check
for Rebecca Design, it's OK because you'll notify your bank,
hey, I got this trade name. And the bank will accept checks
that are made out to the LLC or to the Rebecca Designs or
whatever your trade names are. So the bank will accept them and
you are fine. Just you're holding yourself at
ADBA or trade name really can't enter into a contract.
It has to be the the company name.
And then on those contracts. The other thing is a lot of
times, you know, so someone says I'll send you over a contract.
They only know you as Rebecca and they send over the contract
where it just has Rebecca Ward as the person who's entering or
the The Who they're entering the contract with.
Don't sign that send that back. Hey, it's going to be under my
LLCDBA, blah, blah, blah. And then in your signature line
it says Rebecca Ward Designs LLCDBA and then Rebecca Ward
manager or member or whatever your title is.
So you're setting it out. If they send that over, you sign
the contract with your name on it.
You are on the hook right that that is going to be the best
evidence of you being personally liable.
Right. And so it's in the name of the
limited liability is like putting that name, that
corporation on the contract limits your liability.
Exactly. Otherwise you, you entered into
it with them and you are the brand and it it's with Realtors
and with designers and people lawyers as well.
Who are you entering into this agreement with?
Make sure you're clear it's not Rebecca.
I am behind the company, but you're entering an agreement
with Rebecca as the Rebecca's LLC.
Really good recommendations there.
So that respect the business entity a lot of times as well
people want to pay you through, you know, I'm just going to
Venmo you what's your Venmo and they send it to Rebecca Ward's
Venmo. You should not do that.
The income from the business should go into the business bank
account. Expenses of the business you're
paying subcontractors or otherwise should come out of the
business bank account. And there's also this concept of
undercapitalized company that if the company has no assets in its
bank account, there's nothing in its bank account, then someone's
suing says, well, the company's just a shell.
This company then therefore we should hold Rebecca responsible
because she takes every last penny out.
You should have what I call reasonable working capital
reserves in the business bank account.
What is that? Three to six months worth of
expenses. So if you get, you know, your
first check comes in and I know you want to, you know, your 5000
dollars, $10,000 comes in. I'm not saying keep all 10,000
in there, right? But don't take out every last
penny. Keep a portion of it in.
You know, I've got my own businesses.
I've got a bunch of different credit cards and debit cards and
bank accounts for a bunch of different businesses.
We actually have a special relationship LLC attorney with a
bank called Relay Financial. And Relay is like they call it a
profit first is their focus. And one of the things that I do
when I do my banking with that is that all the money comes in
to my main operating account and I've set a threshold.
What is my minimum working capital reserve X dollars?
Anything above that it automatically I set the rules.
So that automatically takes a portion, puts it towards my FICA
tax, takes a portion and puts it towards my federal tax.
And then the rest goes into my profit account.
And I know that profit account, I can take whatever I want out
of the profit account. The other accounts, I've got
them ring fenced and identified as being these already have a
purpose. This working capital, the main
operating account is also one that I'm not going to let get to
0. You know, I'm going to have
proper capitalization of the company.
So when you need the LLC, getting the insurance, getting
the LLC set up, having that professional registered agent,
having your documentation for the LLC, keeping ongoing meeting
minutes, respecting the bank account contracts in the name of
the right party, you're going to be very well protected and maybe
not an issue here. Those special meeting minutes
when you make an important decision.
What I like to think of is, could this decision I'm making
get me sued? If it can, I want to have
meeting minutes that show I'm making this and exercising
something called business judgement.
The business judgement rule protects the owners of business
entities from bad decisions. You make a bad decision, you
hire a contractor and the contractor, you thought they
were licensed and insured, but they pulled the wool over your
eyes and the work then causes a fire right at the person's house
because they did some electrical work.
How did you make that decision? Did you exercise business
judgement? I checked, looked at the Better
Business Bureau. I checked and made sure that
they were licensed and insured as an electrician.
And then I hired them and here's what I did.
Now, if it turns out they weren't licensed, but you had
done your due diligence, you are going to be almost assuredly
protected from that. What turned out to be a bad
decision, the failing to do that, you hire, well, it's a
buddy. I know him from, you know, we
our kids go to the same school and he said he could do
electrical or she said she could do electrical.
So I'm just going to bring him in.
You didn't exercise business judgement.
That was because it helps Rebecca in some way, right That
that's at least what the other side who's suing you would say.
So if you're making a decision, hiring a subcontractor, someone
who's going to be doing something that could get you in
trouble. That's where I meeting minutes
put it in there. Boom, look for a licensed
electricity and found one checked their licensing.
They were good to go. I hired them.
We don't want anything bad to happen.
But if it does, you show you exercise business judgement.
Imagine it's three years from now and you get sued.
Prove that. Prove that you exercise business
judgement. How did you find this person?
I have no idea my Google history.
I delete my Google search history every 90 days.
I have no idea. So that is protective of you.
And that's ultimately what I want and I want LLC attorney to
be able to deliver is you actually get the delivery of the
the promise of limited liability protection.
Wow. Yeah, that's great that I think
that covers all of the steps going from when you're just
starting to being fully covered for all the risks that we can
have as interior designers. There can be a lot of risk as
you really increase your project size and scope.
So yeah. It isn't and and then, you know,
the, the contractors talk about that being one of the big issues
here with interior designers that I've seen is that people
that get cold feet, they back out their financial position
change if there's one partner who's really for it.
And then they signed the agreement and the other partners
like how much are you spending? You know, I'm sure you have
horror stories, right, of these strong contracts.
And as you are growing and the project size is getting bigger,
I don't think you need a an attorney right off the bat.
I don't think you need an attorney to form your LLC and
those sorts of things. But as your projects are getting
bigger, I think it makes sense at that point to reinvest some
money, spend a couple of grand probably to get that contract
that is going to protect you. There's a lot of remedies
available depending on what you're doing.
Is the mechanics liens, right? If you're doing that, something
becomes a fixture is installed, you get a lien against the
property. All right, don't pay me.
I got a lien. The government wants to protect
a licensed professionals who once you put in the electrical
or put in the plumbing or put in, you know, some fixture, what
are you going to do? Tear it out like that doesn't
make sense. So they they, they give you a
mechanism to do it. But having a lawyer draft those
agreements to protect you from that contract risk.
What are the interim payments they need to make?
So the progress payments, what are the payment terms on it?
You know, interest accruing and so on and so forth.
And having that strong contract protects you on the business
side. It protects you if you're
getting sued too. Limitations of liability, right?
What's the most they come after you for?
No incidental or consequential damages.
The only thing they could come after you for is the amount they
paid you. Nothing.
Even if the plumbing breaks and it causes $100,000 of damage.
Sorry, the most out you're going to get from me is the amount
that we committed to. And especially because I
exercise business judgement and that person I hired was actually
licensed, insured, whatever else.
Yeah, that's really good. So if designer listening is
like, well, I feel like I'm getting to that point now of
needing a little bit more, is LLC attorney.com something that
they will find resources at that can help them?
Yeah, better than that. LLC attorney.com, not a law
firm. I've taken my brain in the
brains of other attorneys here and put it into an amazing
knowledge base that I've trained A-Team.
They call them Business Success Advisors and they will answer
the phone. You have questions.
All right, I'm in this state, I'm doing interior design.
What do I need to know? How do I set up the LLC?
How do I get the right tax selection or whatever else?
They don't engage in the practice of law, which is
applying your facts to a particular situation.
But the general that they say things like, you know, generally
speaking, you're going to form your LLC in the state in which
you're operating your business, right?
Generally speaking, the member managed LLC or manager managed
LLC and then form that and then you can make a tax collection
for an S Corp at a later date. If the math is math and didn't
make the S Corp election. When you're just starting out,
typically an S Corp doesn't make sense.
Accountants will tell you to do it on day one.
I recommend against that, but they have great resources.
I filmed a ton of videos on these things.
I've written our articles on our website are fantastic and so
they're information. We're information driven.
We want you to be able to deliver on the, the limited
liability company benefits. And so call the team numbers on
the website and they will help you if you get to the point
like, all right, this is moving into the practice of law.
Then they give you a resource book with an attorney.
You can book with me. I call myself a single serving
attorney. So you can book with 1/2 hour
increment with me. And it's a paid consultation,
but there's no retainer or. And nine times out of 10, you
walk away from that with all the answers to your questions.
But then there's going to be things again when you get to
that point and you're looking for the contract, right?
That's really protective. That would be go to your local,
go in your network, find someone who has a trusted attorney.
And you know, I never want to hire an attorney who it's their
first time doing something. So who have they done a contract
for? Your friends, others in the
place. Hey, do you have an attorney who
did your contract? And they were like, yeah, it's
this guy or this gal. And then you go and he was like,
Hey, I want a contract just like they have.
And, and and that point it's like, all right here, boom.
They get to basically reuse that maybe some slight tweaks or
modifications, but that's a good way to keep the legal expense
down when you are hiring an attorney.
But we have great resources at the website and call the number.
Check this out. Great.
Well, thank you, Jonathan. We're going to put all that
contact information in the show notes too, so people can easily
find it. It's been a pleasure talking
with you today. I think like really eye opening
and some good specifics that we really needed some
clarification. Actually, I haven't had it
explained to me quite so clearly before.
So that was really helpful. Thank you.
I really appreciate that and I am excited to be able to talk to
you. And I mean I did that.
Bree enhances her progress. I was.
Yeah. This is, I mean, this is it.
This is exactly what so many creatives go through.
Yeah. And I wish your audience all the
absolute best. And check us out LLC
attorney.com. Great.
Well, thank you. We will do.
Thank you. So much great information.
Jonathan had a wealth of knowledge and we even discussed
a little bit of my own setup afterwards.
It's just very giving, very generous.
So definitely reach out to him to find out what is the best
setup for your design business you are starting out or even if
you are an established designer, he can answer all those
questions for you. And if you're looking to start
your business, and this kind of goes hand in hand with that,
don't forget we have launched your business boot camp in
January. We do talk about how you set up
your business starting out. And so that is going to be
helpful to have Jonathan's expertise on hand for that as
well. OK, that's all I have for you
this week. Next week we'll have another
great episode. And until then, stay creative.
Thanks for listening. If you love this episode, please
leave a rating and a review. This helps me reach other
curious creatives like you. If you have a topic request or
would like to contact me, simply head over to my website
arworddesign.com or e-mail me at podcast@arworddesign.com.