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Part 1 of 12FREE

You're a Business Now

Structure & Legal

Where Do You Stand Right Now?

Before we begin, let's see where you are. Rate yourself honestly. You'll re-take this at the end of the course and see how far you've come.

Pre-Course Baseline

Be honest. Rate your confidence in each domain. This is your personal baseline.

Legal Structure

Is your entity formed, maintained, and contracts signed correctly?

Not started
Weak
Getting there
Solid
Locked in
Tax System

Are you saving 25-30% per deposit and paying quarterly on time?

Not started
Weak
Getting there
Solid
Locked in
Financial Literacy

Can you read your P&L and know your real hourly rate?

Not started
Weak
Getting there
Solid
Locked in
Pricing Strategy

Is your pricing based on cost + margin math, not comfort?

Not started
Weak
Getting there
Solid
Locked in
Risk Protection

Do you have GL, professional liability, and appropriate coverage?

Not started
Weak
Getting there
Solid
Locked in
Money Systems

Complete separation, weekly review habit, cash flow visibility?

Not started
Weak
Getting there
Solid
Locked in
Growth Readiness

Client diversification, delegation plan, sustainable hours?

Not started
Weak
Getting there
Solid
Locked in
Situation

Maria has been cleaning houses for 8 months. She's collecting Venmo, paying cash to a helper, and feeling like she's finally building something. Then a client's 7-year-old trips over her vacuum cord. Broken wrist. Surgery. The family's lawyer calls.

What do you do?
A) Call your insurance company
B) Apologize and offer to pay medical bills personally
C) Tell them you have an LLC so you're protected

Why This Matters Before Anything Else

Scenario

You've been cleaning houses for 6 months. Collecting Venmo. No filings. A client's kid trips over your cord and breaks their arm.

What happens next?tap to reveal
Scenario

Business is growing. You sign a commercial lease for your first shop. You sign it as 'Jane Smith.' Not 'Jane Smith, Manager of XYZ LLC.'

What happens next?tap to reveal

The right structure protects you. The wrong structure costs you. No structure at all is a bet that nothing will ever go wrong.

Three Structures Worth Knowing

Sole Proprietorship
Default if you do nothing. Zero cost. Zero protection. You and the business are legally identical.
LLC
$50-$500 to form. Creates a legal wall. Lawsuits hit the LLC, not your personal assets. Same tax treatment.
When S-Corp Makes Sense
Above ~$60-80K net profit, S-Corp election saves money on self-employment tax. You pay yourself a salary (SE tax applies) plus distributions (SE tax doesn't). On $120K net: ~$9,000/year saved. Requires running real payroll. Don't do this without a CPA.
The $800 Tax Trap
California charges every LLC an $800 minimum franchise tax, every year, even if the business made zero dollars. Form an LLC there, or do business there, and you owe $800 before you've earned a cent. California is the biggest, but it isn't alone. Several states charge annual minimums or franchise taxes regardless of revenue. Two rules protect you. One: check YOUR state's annual LLC costs before you form, not after. Two: never form in a "famous" state like Delaware or Nevada because a video told you to. You'll pay their fees AND still have to register as a foreign LLC back home, which means two states' worth of paperwork and minimums for a business that operates in one.
The LLC is fragile if you don't treat it right
Owners form an LLC and think they're bulletproof. They aren't. Mixing personal and business money, missing annual filings, signing contracts as yourself instead of the LLC, and personal guarantees all erode the protection. The LLC only works if you maintain the separation.

The Setup Sequence

1
Check name availability
Search your state's business registry AND the USPTO trademark database.
2
File Articles of Organization
tap to continue
3
Get your EIN
4
Open a business bank account
5
Get required licenses
6
Write an operating agreement
7
Register for state taxes

Find Your Structure

How many people will own this?
Just me
2-3 partners
4+

The Personal Guarantee Trap

The single biggest gap in legal education for new owners. The moment you sign a lease, vendor credit app, or business credit card, you're often signing a personal guarantee that completely negates your LLC protection.

Find the Personal Guarantee (1/5)
"Tenant shall be personally liable for all obligations under this lease."
Personal Guarantee
No Guarantee Here

Contractor vs Employee: The $25,000 Mistake

Scenario

You hire a cleaner. Tell them what time to arrive, provide equipment, they only work for you. You pay them as a 1099 contractor.

What happens next?tap to reveal

Knowledge Check

What is the PRIMARY advantage of an LLC?

Lower taxes
Personal asset protection
No tax filing needed
Multiple owners
Takeaway

Your LLC is only as strong as the separation you maintain. One mixed deposit, one personally-signed lease, one misclassified worker, and courts treat your LLC like it never existed. Protection is not formed. It is maintained.

Pass the knowledge check above to complete this module.