Monday, September 4, 2017

How to Form a LLC

How to Form a Limited Liability Company (LLC)
What do I need to form a LLC?

Forming a LLC (limited liability company) is straightforward in most cases. Follow these steps and you'll be on your way to LLC ownership.

Form Your Own Corporation
LLC or Corporation?
American Startup Guide to Single-Member LLC
American Startup Guide to Multiple-Member LLC
American Startup Guide to Member-Managed or Manager-Managed LLC
California LLC Formation Kit
Delaware LLC Formation Kit

Step 1
1. Select a business name for your LLC. The name must be available in your state (not in use by someone else). In most states, you can search the state records online. For example, in California search for "California business search" and the link usually will come up in your search result. Your LLC name must include either one of the words or letters such as, "LLC, L.L.C., or Limited Liability Company, such as Mary's Cakes, LLC. The comma after the business name and before the LLC designation is optional. The best way to ensure that your name remains available for you is to file a LLC name reservation. The reservation allows you time (usually 30-60 days) to figure out the information needed to form the company such as address, members, and other details.

Step 2
2. Find the state form of certificate or articles of formation or organization for the LLC. Be sure to read all the instructions that usually accompany the state form and complete the information. At this time you'll need to determine whether your LLC will be member-managed (meaning all members will run the company together) or managed by a manager (the members designate one person to handle the management). You'll also want to designate a Registered Agent as required by each state. American Startup is an approved Registered Agent and can assist you in fulfilling that requirement. Order registered agent service and keep your company's business private.

Step 3
3. Submit your LLC form to the state with the appropriate filing fee ranging anywhere from $100 to $800 depending on your state. If your state offers an opportunity to obtain a copy of the document, order that too. The copy cost is usually only a few dollars more. We can submit your LLC forms to the state here.

Step 4
4. Prepare a operating agreement for your LLC. The operating agreement helps the members (and manager or managers, if selected) run the company by setting up the rights, procedures, and goals of the company. Nearly every state requires the LLC to have an operating agreement. The operating agreement also outlines the percentages of ownership of each member if, particularly important if ownership is not split equally. Have all members and any managers sign the operating agreement.

Step 5
5. Obtain a taxpayer identification number for your LLC. You may use IRS Form SS-4 or use the online taxpayer identification number application. Once you have your tax ID, you'll be able to open a bank account in the name of the LLC.

Step 6
5. Find the state form initial report or statement of information. File your initial report with the state.

Order your LLC Formation Kit
The American Startup LLC Formation Kit contains all of the documents and forms needed to for your LLC.
Need more information? No problem! Contact American Startup at (310)752-1157 or by email at

Saturday, April 1, 2017

Record Keeping for Coders, Inventors, and Startup Geeks

A startup's value to the company and its investors rests firmly in its intellectual property rights. Intellectual property ("IP") is the single biggest asset of 60% of U.S. startups today and that number is expected to grow exponentially over the next five years. If there is ever a dispute about who owns the IP, an inventor's notebook could very well be the saving grace.

Determining the Author and Inventor
To determine inventorship, you must first determine what the invention is and then determine who contributed to making it. Often, inventorship is defined by negatives. For example, an inventor is not someone who merely contributed non-inventive information; or, an inventor is also not someone who simply ran routine tests.
How to Record Your Invention
Keep detailed notes of meetings, telephone calls, alpha/beta testing dates and outcomes, work and other writings in a bound notebook. Have the pages of the notebook witnessed, meaning signed and dated by someone who understands the invention but is not a co-inventor. Maintain records of slides and or disclosures made in presentations and copies of your reports.
The Purpose of a Coder's Notebook
A software patent for example, grants its owner the right to sue those who manufacture and market products or services that infringe on the claims declared in the patent. Typically, governments award patents on either a first to file or first to invent basis. Therefore, it is important to keep and maintain records that help establish who is first to invent a particular invention.

The inventor's notebook is a systematic device for recording all information related to an invention in such a way that it can be used to develop a case during a patent contestation or patent-related lawsuit. The notebook is also a valuable tool for the inventor since it provides a chronological record of an invention and its reduction to practice. Each entry must be signed and dated by a witness. The witness should not be someone with a conflict of interest (such as a research partner). If an inventor ever has to go to court to prove he or she was the first to invent, then the witness would be called to the stand to testify that the signature is theirs and they signed that page on that date.
Virtual Mistake
A "virtual inventor's notebook", in which one scans note pages and emails them to oneself, would not provide the same legal protection as a bound inventor's notebook since it is easier to commit fraud with a virtual notebook.

The need for an inventor's notebook will diminish in the future as the United States is progressively implementing a first-to-file system. It has been said that first-to-file eliminates a troubling source of litigation, particularly for individual inventors who may lack the processes and legal resources to defend against evidentiary challenges by large corporate research organizations.
Physical Requirements for Your Notebook
Integrity is the primary reason for a physical book. To best serve its evidentiary function an inventor's notebook should be in a form where it will be readily apparent that the contents have not been tampered with, such as having pages that may have been removed, replaced, or altered. Accordingly, an inventor’s notebook should:
  • Be permanently bound with a fixed number of pages (no loose-leaf binders);
  • Have all of the pages sequentially numbered;
  • Have space on each page for at least one witness to sign and date.
Permanency matters, so be sure to:
  • Write in permanent ink & legibly; 
  • No empty spaces or skipped pages;
  • Permanently attach any supplemental materials;
  • NEVER make alterations of any kind. Never tear out pages, erase anything, or alter notebook entries. If you make a mistake while making an entry just draw a line through it so that the mistake is still readable, then date and initial next to the line. 
  • Don’t record any communications with your Attorney. These are always confidential and protected from disclosure under the attorney-client privilege. 
American Startup is a full-service online retailer of legal forms, corporate formation kits, and corporate legal products including several Inventor's and Software Coder's permanent notebooks, Non-Disclosure and Confidentiality Agreement forms. Check out the selection of Record Books here or visit for more information.