Hi guys,
FYI
We have just acquired another home in Missouri and would like to share how easy/cheap it was to file for an LLC in Missouri to acquire this property under
Some buyers agents are charging $500-$900 to set you up with an LLC and file for an EIN if you are stuck in Australia and need someone's help to set it up. HOWEVER DON'T PAY THIS!!!
I paid a total of $147 USD and did it all from my home in Melbourne.
To complete the LLC process you will need the following:
– LLC registration,
– LLC Operating Agreement,
– Registered Agent annual Fee (it is compulsory when starting an LLC to have a registered agent who's business is in the state you are filing for LLC registration)
– EINHow to do it:
Step 1. http://www.sos.mo.gov/ > Business > Starting a Business > Register LLC
Step 2. Register you LLC name and enter relevant details including LLC name
Step 3. Enter the Registered Agent you will use (google Missouri registered agent and sign up for a registered agent. We paid $97 for the year)
Step 4. Enter the organizer. Because we will have our Australian Company owning this LLC, I put my Australian company as the organizer in the individual organizer section (the corporation organisation section requires a registered USA corporation, which most Australian's won't have)
If you will own the LLC in your own name then just put your own name, it doesn't really matter who the organizer is, as the operating agreement is the document that identifies who will own the LLC and what % if there are multiple members of this LLC
Step 5. Check all details are correct and proceed to Checkout
This will cost you $50 to file and you will get your business files in the following window (these registration documents are important for opening a bank account etc.)
Step 6. Apply for EIN,
go to http://www.irs.gov/businesses/small/article/0,,id=97860,00.html
Quickest way to get this EIN is to ring 1 267 941 1099 from Australia and apply over the phone. Because of the time difference, the IRS office opens at 9pm Melbourne time, so give them a quick buzz straight after dinner!
Step 7. Go to the registered agents website that you registered with and there will be free operating agreement pdf files you can download to fill in the gaps and outline how your new LLC will be organised, owned and operated. Here you can outline who owns the LLC and who has what % share in the company
If you can't find a free operating agreement go to http://www.northwestregisteredagent.com/free-operating-agreement.html
and fill in the blanks
So all up:
Registered agent – $97
LLC filing – $50
EIN – Free
Operating Agreement – FreeThis process can be done in any state.
For example if you are buying in Atlanta, just repeat process but go to
to start your application
Property Scout:
GREAT INFORMATION! It saddens me to see Australian investors pay upwards of $700 to file an LLC.Thanks for outlining it for everyone else on the forum.
Hi Property Scout
An enquiry if I may.
Do you not also need an ITIN (Individual Taxpayer Identification Number)???
Or by setting up the property under an LLC avoids the ITIN application and you simply need an EIN (Employer Identification Number)?
Thanks for the heads up on the LLC setup.
You shouldn't need an LLC, all you need is the EIN and this should help you get a bank account. ITIN is for an individual only and seeing as you only have a company set up over there, there is no need for an ITIN. Luckily too because that form looked very involved and aparently can take a long time to get approved. EIN is relatively quick.
Great information Property Scout.
Clear, concise and to the point.
A little more of a challenge to come wiith a bank account …but that is another postBiggaz13,
The LLC structure is totally individual, depending on how many houses you purchase and how you want to protect yourself. (Speak to your accountant about this)
In regards to the ITIN question, I was under the impression that an ITIN is still required in order for individuals to complete a US tax return every year. I will be visiting the US again next month and I will finalise it all when I am over there as I have understand (and you have pointed out) this is a more complex application process.
Streamline, my contact at Wells Fargo needed the LLC set up documents as well as the LLC operating agreement in order for me to open the business bank account, so I would say that the LLC is an important part for setting up the business bank account.
it also depends on your own circumstances, where you buy, what you buy, and what structure you are buying through! When you form your company in one state but operate your business out of another, you're considered a "foreign entity" in the state of operation. To remain in good standing in your host state you'll have to file for "foreign qualification" and registration, Also, you have entities such as C Corp or S Corp. and if your looking at setting up in places like Delaware or Nevada for tax purposes, but your investing in other states, it might not be the cheap haven you thought it was.
I agree that there are places that take advantage of the unwary and charge excessive high fees, i know of some of them that were just blatant rip-offs, but there are also some that are very reasonable and charge a very nominal rate to set it up, and you also get the right expert advice on your own personal situation, so you know it's been set up properly. we have such a person on our team.
The bottom line, is that you have got to set yourself up properly from the start.
Hope that helped a bit.
thanks for the post… this site http://www.sos.mo.gov/ you mentioned, was that the right link or the site is temp unavailable?
DHCP,
try this link: http://www.sos.mo.gov/BusinessEntity/BusinessEntitiesOnline/help/mo/notice.aspx
For some reason that Missouri State Government website was down on my computer as well
Let me know if the above link doesn't work
Fantastic,thank you i will look at this after i have set up my Aust Trust !!
Great information Property Scout. I've been advising people of the same options after being asked for $1000US to do this.
Regarding the ITIN.
Yes you do need an ITIN but not to set up a company. Set up your LLC, apply for your EIN (employer identification No) and then you will be required to have an ITIN when you lodge your first tax return in April.
The form is a W-7 and it needs to be lodged with your tax return. Remember in the US an LLC is made up of partners, as in a partnership, not shareholders and directors, as in a Pty Ltd company. (For that you need a C or S corp). Therefore the tax return you make as an LLC is applicable to an individual and you will need an ITIN.
Also, it takes about 8 weeks to process and you need documents and verification of ID etc to accompany the W-7. So there are a few hoops to jump through.
To save time and hassle at tax time, I would apply for an ITIN once you have your company set up and before tax is due.
You can find the instructions and the form at the IRS website http://www.irs.gov/individuals/article/0,,id=96287,00.html
Google : W-7 IRS and the instructions pdf will come up as well. These are very important to follow and a total painPlease check all this yourself, but this is what I am going through right now and from my experience. In fact in 2 hours I am off to to a tax assessment office in Manhattan to lodge my W-7 which took me all yesterday afternoon to decipher and fill out.
Best of Luck.
Ian
http://theblockblog.com
Free Property Investment Info,Tools & Resources for Investors with a Sense of Humour.Also with the W-7, if you tick the boxes 'a' and 'h' – you will need to include documentation of the LLC's operating agreement which in turn must include the EIN in it's content, along with the usual details of those involved in the company and the procedure under which the LLC is operating.
You will need to add at 'h'
Exception 1a – Partnership Interest.
One other tricky aspect is finding out the 'Treaty Article Number' – It is either a 2 digit number or a 3 digit code. I thought I had it at '28' but after a visit to the IRS I will have to check that again via the IRS website. They arent very helpful at giving specifics unless its procedural, but are great at placing doubt in your mind.Ian
http://theblockblog.com
Free Property Investment Info, Tools & Resources for Investors with a Sense of Humour.sapphire101 wrote:Also with the W-7, if you tick the boxes 'a' and 'h' – you will need to include documentation of the LLC's operating agreement which in turn must include the EIN in it's content, along with the usual details of those involved in the company and the procedure under which the LLC is operating.You will need to add at 'h'
Exception 1a – Partnership Interest.
One other tricky aspect is finding out the 'Treaty Article Number' – It is either a 2 digit number or a 3 digit code. I thought I had it at '28' but after a visit to the IRS I will have to check that again via the IRS website. They arent very helpful at giving specifics unless its procedural, but are great at placing doubt in your mind.Ian
http://theblockblog.com
Free Property Investment Info, Tools & Resources for Investors with a Sense of Humour.Hi Ian,
You can view the income tax treaty between United States and Australia at http://www.irs.gov/pub/irs-trty/aus.pdf
Page 1 shows the 'Table or Articles' and you will see Article 6……………………………Income from Real Property
Therefore on the W-7 for you would enter:
Additional information for a and f: Enter treaty country: Australia and treaty article number: 6great info scout!
Just quickly did you set up a bank a/c when you were over there linked to your LLC? Or have you done all that from here?
I’ve just been into HSBC but for a bank a/c in personal name and you have to open an a/c with them here first and hold it for 3 months before they will open an a/c from here in the US. Slightly frustrating….
Great info on the ITIN guys!
Bennyblanco – I had a Wells Fargo account set up when I was over in the US a few years ago, and it was in my personal name. All that was required for ID purposes was a passport and a credit/debit card.
I kept a good relationship with the guy who set my account up and once our LLCs had been set up, I then just emailed my him with all the LLC documents and operating agreement and he set it up for me within a day or so. I had to scan and sign and re email back the business account forms, but it was all very straight forward. The business accounts are now linked in the same internet banking window as my personal account.
Now, if you can’t get yourself to America to set up a bank account, and time is of the essence, then I could suggest the following:
Get on the phone to a Wells Fargo branch in any area (doesn’t have to be the same area you are looking to invest) and try and set up a personal account over the phone with one of the account managers, scan and send through your passport and debit card copies to their personal email. Most important is to keep that relationship handy for the future, especially living so far away. The more ID documents the better!
Im not sure if this will work and would be interested in hearing if anyone has done this already.
The have all your property transactions coming in and out of your business account and you have started the ‘seasoning’ process that banks look at when you are wanting to start borrowing money!
Hi peoples,
I’m a new investor and very new to this.
I have attended an information seminar and am suitably impressed. This seems to be the path that I have been trying to find.
I have an initial question. There is a lot of talk about LLC and C-Corp.
Can anyone enlighten me on this subject? What would the reasoning be to have a C-corp and an LLC and how would they be related?Hi guys,
FYI
We have just acquired another home in Missouri and would like to share how easy/cheap it was to file for an LLC in Missouri to acquire this property under
Hi Property Scout,
Did you use your Melbourne address in the forms?? Or did you use a US address?
I am trying to form an LLC in Florida (online), but the forms will not allow me to use my Sydney address, the fill-in boxes are pre selected with States of the USA. As such it keeps on rejecting my application until it is filled out ‘Correctly’…bugger.4Sighted wrote:Hi guys,Hi Property Scout, Did you use your Melbourne address in the forms?? Or did you use a US address? I am trying to form an LLC in Florida (online), but the forms will not allow me to use my Sydney address, the fill-in boxes are pre selected with States of the USA. As such it keeps on rejecting my application until it is filled out 'Correctly'…bugger.
4Sighted,
You will require a "Registered Agent" to act on your behalf in the state of creation for the LLC. If you are setting up the new LLC in Florida you may be able to arrange your property manager or other third party to act on your behalf as the physical street address for serving of legal notices. The Secretary of State (SOS) in each state usually requires this and will not accepty a foreign address or a PO Box for serving of notices.If you cannot arrange your Property manager to act on your behalf you can have one of the web companies do this for any of the 50 US States and charge I think around $60per annum.
Are you buying other property in FL in addition to the Missouri? Otherwise from this info it would appear better to create your LLC in the state of the property location unless intending to purchase in mutiple states. Most / some states will require your LLC to be registered in the state where the property is situated regardless of where the LLC is created. Do not forget there will be state taxes as well as the property county taxes
(still new at this)
Thanks Tassie, I was trying to reply to your post and inadvertently sent your post by itself, sorry.Anyway, thanks for your reply.
I am not buying anything in Missouri (once again a posting error), I am only buying in Florida.
I do have a registered Agent in FL, and have included their address in the application.
After failing for the fourth time with the online application, I sent an email requesting assistance to the Dept of State. They got back to me and suggested that I use “00000” for the Zip code and “XX” for the State on the E-Forms.
I tried this for the fifth time and after failing, I figured out that it was my ‘Apple’ computer that was the culprit as I do not have a ‘Back’ browser button, (maybe only my computer), so I filed it using a ‘Windows’ computer and viola, it worked. I guess the Zip Code and State bypasses are necessary when filing an E-Form with pre-determined USA drop down boxes.At the end of the day, my LLC has now been filed, tracking number received, fees ($130.00 including ‘Certificate of Status’ ($5.00)) paid and the form says that it will take about 2 days to go through the system before I hear back from them.
I’ll keep you posted on the progressive outcomesSo if you registered your own LLC, who will sign up for your legal docs when you buy property in the US remotely on your behalf? Who can you nominate or use as an attorney if you registered your own LLC compared with when you use an attorney to register an LLC and open the bank account in the US?
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