Sequence of Events

Hello! David J here again bringing you more of the steps on my journey toward financial independence.

Again, tasks have taken top priority, and now I have "news from the front" to share with you.

THIS IS IMPORTANT!

In working with the company helping me build business credit for my LLC, what is taking the most time is simply completing the establishment of the LLC as a recognizable entity: getting the Employer Identification Number, the EIN.

Your personal Social Security Number is your personal key to getting everything from a job to a bank account or a credit card.

Likewise, your entity's EIN is the key to getting everything from a bank account or a business credit card to vendor credit or cash credit, as well as registering your entity in your home state, applying for a business license if required where you live, and so on. You really need the EIN to get everything moving.

If you read the earlier post, The First Thing, you know that the approach I'm taking is to set up a business entity - an LLC - and build business credit for that entirely separate from my personal credit. The reason why is outlined in the earlier post.

The first two most important steps in your entity set up process are:

1. Establish Your Chosen Entity

2. Get an EIN for the Entity

Let's look at this more closely.

Establish Your Chosen Entity

There are free and low-cost sites where you can establish your entity.

LegalZoom.com is one such website. Select the "LLC (Limited Liability Co.)" link under "Business Formations" on the left-hand side of their home page.

The Company Corporation is another website. Follow their navigation hints on their home page.

Both LegalZoom.com and The Company Corporation are low-cost options. Note that I am not affiliated with either one and make no repesentations regarding them. Other sites exist also but were not included in my research preparing this post.

You will need to be aware of certain things which MUST be done to make sure that your entity is 100% compliant with the criteria used by the grantors of credit.

For example, your entity must have a REAL street address, not a Post Office Box or a mail drop box at a place like the UPS Store or similar. Further, the street address for your entity may not have multiple entities associated with it. The credit grantors will be checking to see that your entity looks like a credible business. So, it needs to have a real street address of its own.

Also, get with your tax and/or legal professional to discuss any advantages of an out-of-state entity. Certain states have laws which are especially friendly to business, most notably Delaware for public entities and Nevada for private entities. Your professional consultants can explain the advantages.

Be aware, however, that if, for example, you live in Illinois and organize an LLC in Nevada, you will need what's known as a "registered" agent in Nevada in order to have the required local presence in that state. You will, then, need to register your entity in your own home state. Again, your professional consultant can help fill in the blanks. Remember that I am not an accountant or an attorney and cannot give advice or counsel on such matters, I can only tell you what I know which may or may not be applicable to your specific situation. In the end, you and you alone are responsible for your own entity. The registered agent represents an additional expense, but is required.

Get an EIN for the Entity

This can be done directly on the IRS website. Select the link which says, "Apply for an Employer Identification Number (EIN) Online".

In my case, I went with the company helping me build business credit for my LLC. In the packet of papers they sent me for my LLC was the IRS Form SS-4 for applying for an EIN.

As of this writing, it's been about six weeks since I began this process. I submitted my SS-4 to my coach a little over two weeks ago. I'm waiting to get notification back from them that the SS-4 was filed and the IRS responded with an EIN for my LLC.

The EIN Is The Key!

As I was looking to begin setting up bank and store credit accounts for my LLC, I quickly discovered that without the EIN I was going no where. Having submitted my SS-4 to my coach, I am now waiting for their response containing the EIN so I can start taking the next steps.


Since I'm waiting for the EIN, I'm holding off on store credit and so holding off on certain purchases such as office equipment and supplies. I'll be using those purchases during the time when I'm building credit history for my LLC. Then, I can look at completing the steps toward getting ready to apply for larger lines of cash credit.

The process continues ...

We'll talk again soon!

Take care - be well!

Much Success!