TRUSTS ATTORNEY LAS VEGAS | WHEN ARE YOU LOOKING TO HAVE MORE SOLUTIONS?￼
WHEN ARE YOU LOOKING TO HAVE MORE SOLUTIONS?
Welcome to the trusted podcast. My name’s Blake Johnson. I’m your host. And today I’m super excited. We’ve got a great guest with us. I’ve got Garrett Sutton. And for those of you who don’t know, um, he is a business attorney genius. Uh, he has written over, uh, you know, 12 books. He has a rich dad advisor, which if you don’t know rich dad, poor dad, you definitely need to look into that. Uh, and he’s also the owner of a company called corporate Twitter direct. And we’re going to talk about that today. So Garrett, welcome to the show and our great Trusts Attorney Las Vegas and see why we are the best.
If you don’t mind, if you want to just give yourself a little bit more of an introduction, as far as, you know, kind of what makes you qualified to speak about registered agents, which is what the topic is today?
Well, just a little background. I grew up in the San Francisco Bay area and went to Berkeley and then went across the Bay to Hastings college of the law, the University of California’s law school in San Francisco. And, uh, you know, I always enjoyed corporate law in law school and I moved up to, uh, Reno in 1989 and Nevada has a great corporate law. So I’ve been practicing corporate law since then. And then I became very fortunate to be associated with Robert Kiyosaki and the rich dad, poor dad group in the year 2000. So I’ve been working with Robert and the team for 20 years and it’s been great because we’ve gone not only around the US but around the world, talking about financial education and they don’t teach this not only in our school system, but they don’t teach it in other school systems around the world with our Trusts Attorney Las Vegas.
So there’s a thirst for this information. And my job is to talk about asset protection and how to use corporations and LLCs to protect yourselves. And we also offer a registered agent service in all 50 States. So we can talk about that, cause that’s an important function that a lot of people overlook or misunderstand. So I’ve been with Robert and the team for 20 years, as you mentioned, I’ve written these books. The one for real estate is called loopholes of real estate. Uh, and then I’ve written that a number of other ones in the rich dad advisor series and, and Blake, I have a new one coming out, October 27th. I called scam through yeah, scam proof, your assets. You know, we’re all being hit up by over the internet and by phone with all these scam artists. And so this book is steps you can take to protect yourself from that day luge of, uh, you know, bad actors. So, uh, that’s, that’s the background in a nutshell?
Well, let’s jump into registered agents. So first off to explain to us, uh, to listeners what a registered or a statutory agent is, and, um, you know, why each state pretty much requires you to have,
Okay, well, I mean, let’s look at a situation where you’re a lawyer. You want Sue someone in the state of Texas. It’s a big state and you know, maybe you knew where the business operated, but maybe they’ve moved. So you need to be able to find out where that business is located. And it could be difficult if we didn’t have what’s called the registered agent. And the registered agent is a requirement by each state that you have someone register resident registered in the state where you set up the corporation or where you’re qualified to do business. We can talk about that. And it’s a place where the attorneys can go and, and serve service of process, a notice of a lawsuit with our great Trusts Attorney Las Vegas. So instead of having to look all over the state of Texas for where we can provide notice of a lawsuit, the registered agent is listed on the state’s website as a place where an attorney can serve someone who’s going to be sued. And so that’s the whole purpose of it is to, it facilitates the legal system in allowing people to be able to find where they can drop notice of a lawsuit off easily. And it’s an important function because you want to get notice of a lawsuit if your registered agent resigns or you’re your own registered agent, and you’re not home, uh, bad things can happen. And we can talk further about that as well.
Yeah. So that was my next question is what are the pitfalls of being your registered agent? Cause I think a lot of people, they go online, they set it up, they, make themselves registered agent cause that’s the cheaper option. Uh, but it’s not necessarily the best option.
Well, and here’s what can happen. Uh, if you’re your own registered agent and say, you go to Europe for a couple of weeks, right? And the attorney, it comes by to your house. There’s no one there. And they try a couple of times and no, one’s there to accept the service of process. They can go to court and go to the judge and say, your honor, we tried to serve, uh, Blake at his home address. He wasn’t home. And the court says, the judge says, all right, well then the next step is you can publish a notice in the newspaper and you know, the legal notices in the back of newspapers and that little two-point type and no one ever reads, they publish a notice in the newspaper saying we’re using, here’s your notice. And most people aren’t going to get that notice, right? They’re not going to be properly notified.
So the attorney says, okay, we tried to serve him in his home address. We tried to publish a notice in the newspaper, your honor, we’d like a default judgment. And the court will say, you’re right. You you’ve made the attempt to serve them. And we’re going to give you the default judgment, meaning they win the case without you ever being able to respond. So it’s important that you have a registered agent who appreciates that this is an important function. So if you’re traveling, uh, you know, you need to, you really should have a professional registered agent, uh, except service of process for you. And you want someone who appreciates this because once you get served that person, the registered agent of corporate directors, for example, we’re on the phone immediately. We are letting you know that you’ve been served because in many cases you only have 30 days to answer, right with our Trusts Attorney Las Vegas?
So you can get your attorney on board. You got to answer that complaint in a timely manner. Now here’s an example of what happened Blake, uh, to one client before they came to us. And it’s a true story. I, uh, I was at an event in Las Vegas and this lady came up to me and told me the story. So she lived in Merrill and she was her own registered agent in Maryland. And then they qualified the Maryland LLC to do business in Missouri. And they, uh, used a service there, but they, they, the people that were in the real estate, she owned, it was a mobile home park. And the mobile home park was made up of meth addicts and the mathematics, you know, they’re grinding their teeth all day and on the computer. And they found out via Google maps where she lived and they were able to look on Google maps and see that she lived in a very nice house. And so at the mobile home meth park, they put up a notice. Here’s where our owner lives. You don’t have to pay rent because she lives in a nice house. And so you don’t want to put yourself out there where people can find out your background, where you live, you’re much better off having a professional registered agent take over that function for you.
Yeah, definitely. Uh, there’s, there’s something to be said about anonymity. There’s a reason why, you know, celebrities and wealthy people go through all those steps because it does, it makes a big difference in whether someone can either find you to Sue you. And then if they do, they have to jump through a lot more hoops to get that done. Another thing is, uh, for having a registered agent, especially if you have someone like corporate direct or another law office as your registered agent, that’s going to deter a lot of people from the beginning because they know you’re on top of it. You have a lawyer on a call already. And so there, you’re going to be there to respond to that. And so, unless it’s an actual viable case, you’re going to deter a lot of those frivolous suits from the beginning,
Right? Yeah. So, go ahead. Next question.
What should business owners look for in a registered agent when they’re going to select somebody?
Well,, you don’t want the mom and pop that has been only open for six months and doesn’t have a track record. Uh, you, you want some, and we’ve been in business 30 years. Want you want someone who has a track record of performing these services and who appreciates the need for you to get immediate notification of the lawsuit? Cause again, you’ve only got 30 days, 20 days in Nevada to, uh, to get this answer on file. So you want someone who takes the job very seriously. Now, the other thing to know Blake is if you don’t pay the registered agent, they have the white right to withdraw as a registered agent. And when someone comes to serve a notice of a lawsuit, the registered agent can say, well, you know, that company didn’t pay us. We’re not the registered agent anymore with us as the best Trusts Attorney Las Vegas. And they have nowhere else to go. If you haven’t replaced the registered agent. And you’re back into that situation where they’re going to go to court, publish a notice in the newspaper and get a default judgment. So if you’re replacing registered agents, you need to make sure that on the state website, your company name is associated with a legitimately registered agent. Yep.
I definitely agree with that. Um, anything else with registered agents that you think is vital that our listeners know?
No, it’s interesting. New York, uh, does not require the agent to be in the state of New York. Uh, you can have a registered agent for a New York company in Nevada. Uh, it’s the only state that does that. I’m not sure what the policy is behind it, but, um, New York has that funny rule. Uh, but every other state, uh, requires that you have a registered agent for the state where you were incorporated and the state where you’re doing business. So for example, let’s say you set up a Nevada corporation and you have a storefront in Utah, right? You’re, you’re doing business in the state of Utah. You’re employing people in the state of Utah. You’ve gotta be qualified to do business there because you’re part of the Utah tax system. You also need not only in Nevada registered agent at that point, cause that’s where you were formed, but you need a Utah registered agent because that’s where you’re doing business. So you need in that scenario, two registered agents and we provide the service in all 50 States. So we can take care of that. Uh, but a lot of people are confused when they registered a new business in a new state, they have to get a registered agent in that state as well.
Okay. Yeah, very vital. And I think it brings up a good point of from a liability standpoint, if you’re doing business in other States, you should register your business in that state. Just having it. The one state that you set up initially is not adequate because you leave yourself open to, you know, a whole lot more exposure by not properly, either doing the taxes in the state where you’re doing business. You know, California is a big one where people try to get away with that. Uh, and just FYI, the California, California tax commission will come after you.
Yeah. Oh yeah. If you don’t pay that $800 a year for the state of California and they catch you the penalties $12,000. So, uh, they, the franchise tax board is more aggressive than the IRS. Um, the other thing about registering to do business in the state where you’re operating, if you haven’t done that and you get sued, you can’t maintain a defense to the lawsuit in many States. So it’s really important that you’re registered to do business in all the States where you have employees, where you have a storefront where you’re, you know, in some states, if you go into a state for more than 30 days a year, you have to qualify to do business there. So work with your attorney and CPA to make sure that you’re following these rules because they are important.
Definitely are. Um, so speaking of that, what are some other simple issues from a liability perspective that most business owners,
Um, that they should be doing well, uh, I’m, I’m working on a book that’ll come out spring of 2021 called piercing the veil and piercing the corporate or the LLC veil, uh, means that if the entity let’s say it’s an LLC gets sued and they haven’t followed all the formalities, which we’ll discuss. If they haven’t followed all the formalities, they can Pierce through the LLC and get at your personal assets. Now we’ve set up the LLC or corporation to protect us from that. But by failing to follow these simple corporate formalities, they can go right through the veil of the corporation or LLC and get at your personal assets. So what are some of the things you have to do? Well, you have to pay the state, their annual fee, right? If you don’t pay the state, uh, every year they’re gonna revoke your charter. Uh, and it’s kind of hard to say, you’re entitled to asset protection when the state is revoked your charter, uh, you don’t have any asset protection at that point. You need to file
That. We should, we should bring up that’s what your registered agent does. That’s one of their roles is to make sure that you do pay that each year. So you don’t have to worry about remembering when did
Correct. That is a key function of the registered agent. Then you also need to do in most cases, a tax return for the entity. Um, you know, you need to file either an escort operation tax return, a C corporation tax return. An LLC can be taxed, however, you want, but you need to do that on an annual basis. It’s hard to say you’re following the corporate formalities when you’re not filing an annual tax return. Um, you know, you need to, uh, have a minute of minutes of a meeting once a year. Most states require that even for LLCs, LLCs and corporations, uh, the management of those entities has to come together, uh, once a year and have a meeting. And you want to be able to prove that you had the meeting. So you just jot down what are called minutes of the meeting. We’re all used to seeing what the minutes look like.
And people think this is a big pain, but no, it’s, they’re called corporate minutes, not corporate out, right? This is not a hard thing to do, but you need to do it. I want you to have that minute book with the annual meetings in there so that if you ever get sued and someone says, gees, well, you know, Blake, didn’t follow the corporate formalities. You know, you come into court and you show that you had meetings every year as required by the law. So that’s also another good thing to do. And, uh, you know, we help people with the minutes on some people don’t like to do it, but you know, there, we also give you a template that shows you how to do it. You can do it yourself. But so those are some of the formalities Blake that you need to do. You need to make sure that you pay the state every year.
And it’s important to do your proper tax returns. You need to do minutes of the meeting. Another important thing would be to sign all contracts with anchor, LLC, right? You want to provide corporate notice to the world that you’re doing business as a corporation or an LLC. Uh, let’s say your, um, LLC that holds real estate is called L street LLC. Cause the property is on Elm Street. And when you sign a lease with a tenant, it just says Elm street. It doesn’t say Elm Street, LLC. The tenant could make a rational argument that they thought they were doing business with you personally, uh, as, as under the DBA Elm street. Whereas if you actually have the lease sign Elm street, LLC, Joe blow was manager of Elm street, LLC. Then the tenant has noticed that they’re dealing with an LLC. So that’s another important corporate formality. Just that corporate notice that they’re doing business with an entity and not you individually.
I loved all that. Um, one of the thoughts I had while you were talking about the minute is I know Robert Kiyosaki has talked about, you know, take you, your company vacation or do your minutes somewhere, you know, fun, go to Hawaii, go to whatever and do your minutes there, have your meetings so that you can write off part of that trip. And that makes it really easy and more encouraging to go and do those minutes and get it done.
Yeah. The minutes can be used for some fun. If you do, if you go to Hawaii, I would recommend that you meet with a real estate broker and at least spend an hour looking at real estate. So there’s some sort of business purpose to it, but then, you know, the remaining four days can be fun. So yeah. I mean there are ways
To make it, so it’s not just a tedious task. Right?
All right. So, um, I’m going to state planning attorney. And so I’m going to ask the question, how does all this business liability stuff fit in with somebody, an estate plan, and the asset protection world?
Well, I like to, um, you know, tell my clients how they work together. The LLC gives you asset protection. The living trust gives you probate avoidance. Um, living trust. Doesn’t give you asset protection and the LLC doesn’t give you probate avoidance. So they work together. You have the LLC on the title to the property that gives you the asset protection. The LLC in turn is owned by the living trust that you would set up like, and the living trust gives you the probate avoidance for us with the top Trusts Attorney Las Vegas. So, you know, when, when mom and dad pass, they don’t have to switch the title to the property. The title is in the name of the LLC, but the LLC is owned by the living trust. The living trust by its terms will distribute ownership of the LLC to, for example, the kids. Um, and it’s a very easy procedure that way they work together. So, uh, then some, some clients will have an irrevocable trust and, you know, that’s a different animal, but you would have, uh, the LLC, uh, be owned by the irrevocable trust. And, uh, that seems to work quite well as, uh, for many of our clients as well.
How do you like to see the transfer of the LLC done into the trust? Do you like just a simple assignment of the ownership or do you want to see an actual amendment to the operating room?
Uh, we typically do an assignment just from the, uh, you know, but the operating agreement that will be signed by the trustee of the trust. So we’ll do an assignment, but the S the membership certificate will be issued in the name of the trust.
Gotcha. So we do, we do both essentially. Perfect. Yeah. All right. Um, okay. I just, I just want to throw this out here for any of the listeners that come on, because they know you and your clients, uh, we are happy to offer them 10% off any estate planning needs that they have, because, uh, as you’ve stated, it, it does go hand in hand. Um, so I just want to throw that out there for your listeners and your clients.
Good. Well, that’s a good offer. So thank you for that. Well,
A bit more about corporate direct and, um, you know, how, how many are, you know, you said you’re in all 50 States, but what makes you guys better than, um, you know, let’s say like a legal zoom and how can our listeners get in contact with you?
Well, the reason we’re better than legal zoom is we answer the phone. Um, so what such a novel concept, some of these online services, it’s funny, you know, you pay the $99 to them, and then you can never get them on the phone to find out what’s going on. They, they, once they’ve got your payment, they never answer the phone. Uh, so we have trained paralegals that know the ins and outs, and we are there on the phone. You can call up and ask questions. Um, we do offer a free 15-minute consultation with an incorporating specialist. So if you want to see what our fees are and how we can help you, uh, you can call 800, 600 1760, and just set up a free 15-minute appointment with one of the incorporating specialists. Um, and you know, a lot of these, uh, online providers don’t provide the proper operating agreement.
Um, you know, if you have an LLC taxes, an escort, you can’t use a traditional LLC operating agreement. You can’t use a partnership tax operating agreement. You need a specialized, uh, operating agreement for an LLC taxes and escort or a C Corp. And so we have those specialized operating agreements for people there. They, we don’t charge any more for them. It’s, it’s one package price of six 95, plus the state filing fees, wherever, whatever state you’re going into, but it’s important to have a law firm that appreciates the difference between your taxation and, you know, are you going to be taxed? And S-corp a C Corp, a disregarded entity. So we do have these tailored operating agreements. And then, you know, some people were with the LLC. There’s a lot of flexibility, Blake, and some people are going to want class a and class B interests for the LLC, and we can tailor operating agreements for that purpose.
So, you know, going online and getting the one size fits all is just really dangerous. We have horror stories where, you know, people they’ll go to one of the online services and say, I want to see the core, uh, set up and they, and they don’t ask any further questions. What are you going to use this for? If you’re going to use a C Corp to hold real estate, that is a really bad tax situation. You’re going to get killed in taxes, but these online services don’t know enough to ask you the important questions on what are you going to use this for? How do you, how should we be taxed? And we also will get on the line with CPAs, right? A lot of times, and I’m sure you’ve gone through this Blake where, you know, the CPA will say one thing, the attorney says the other and the client gets frustrated. Cause they’re being treated like a ping pong ball back and forth. We always want to get in the line with the CPA and the client at the same time so that we can understand which direction we’re going and what’s best for the client. So we do offer that service as well with us and get a better solution of Trusts Attorney Las Vegas.
Yeah. I can attest to that. You know, I have clients come in and they’ve, they’ve done the legal zoom side from the estate planning side or from the company set upside. And, um, what I love to do is I asked him before I even looked at the document, what do you think this says and get all their answers done. This is what I thought I was doing. Okay. Then we go through and say, well, this is what it actually says. And rarely has that ever lined up because they said they keep the form fill. And so it’s relying on the client to have all the information that they should have and right.
Right. And that’s, that is not good, uh, you know, you’re, you’re building your estate, you’re gaining real estate and assets. And to, to treat your asset protection and your corporate structure, uh, in such a cavalier manner, uh, is not a way to proceed in life. I mean, to spend a few hundred dollars more, to get the exact right entity for your specific situation set up is, is just proved, uh, you know, saving a hundred dollars here and there just does not add up for me. No, it does.
It all comes down to that understanding value versus cost. And everybody looks at the cost perspective or not. Everybody’s very, a lot of people look at the cost perspective instead of the value that they’re.
Right. Right. So I think we have, with us and experience a better level of Trusts Attorney Las Vegas solutions.
You know, a lot of stuff we covered here and it’s actually quite a short amount of time. So anything else you feel like we missed as far as, you know, general liability for businesses or registered
That we need to cover it? No. Um, you know, the registered agent, as we mentioned is an important function. And, uh, you know, a lot of these $99 providers will lure you in with the $99, you know, articles of incorporation. And then they’ll charge you $500 a year for a registered agent service, and you don’t need to spend that much. And we charge $125 a year. You don’t need to spend 500 a year for the registered agent. You also need to be very careful. And I know, you know, this Blake, but a lot of promoters say that if you set up a Nevada, LLC, you need to have a Nevada office package, right? You need to spend $3,000 a year to have your name on a door and a phone number and all this, you don’t need that. Um, you know, we, the registered agent is your, uh, your place in Nevada or whatever state you’re in and be aware of these promoters who have the low cost come on and then sell you all these extra services that you don’t need. And I’ll tell you, a lot of these people are not attorneys, right? They don’t have a duty to the client. You and I have a duty to the client to do what’s right, for them, a non-attorney has no duty to the client and they’re going to say whatever they can to maximize their returns. So, you know, I think people think attorneys are expensive, but really the attorneys have a fiduciary duty to the clients. And that’s to the client’s advantage.
That’s why we have to carry malpractice insurance. And that is for the client’s advantage. Well, because if we mess up, we have that insurance there to pay for our mess-ups. You know, somebody who’s not an attorney does not have to pay for that. And that scenario you were just discussing. I had a client yesterday that we just moved over that had the whole corporate package of had to have an office, had to have a phone number. They’re like, we’ve done this for 20 years. We’ve never had anybody call there cause you don’t know.
Well, and you know, worse than that, like they’ll say Nevada law requires that you have an office in that circumstance and Nevada law does not require you to have such an office. So there, they’re going so far as to misrepresent Rick misrepresent the law. That’s not who I want to do business with us and our great Trusts Attorney Las Vegas services.
Yeah. It’s just that it’s all comes down to the caliber of people or companies that you want to work with. That’s a running theme I’ve had with our podcast guests when they talk about who to choose. Well, who do you feel comfortable with? What’s kind of your gut feeling is one of them. And then do some research, check the reviews, check, you know, are they in good standing with the state bar? I would highly recommend an attorney for registered agent, at least an attorney as a member of the team, because it just, as you said, it brings that level of, um, fiduciary duty up
Quite a bit. Right, right. Good. All right. Well, um, I’ll make sure to put
The corporate direct a website and phone number in the show notes. Our listeners can find that easily. Uh, Garrett, I want to thank you so much for jumping on the call today to excuse me,, to talk about registered agents and corporate, uh, protection. Uh, I really think our listeners are gonna get a lot of it.
Great. Well, thanks for having me Blake, and thanks for doing what you do, educating people on these issues. It’s important. We don’t get this in school. You’ve got to get it on your own. So listening to podcasts like yours is, is good for everybody, right?
Well, thank you to our listeners as always, please like, and subscribe and also reach out. Let me know who you want to see next on the trusted podcast. And with that, we’ll see you guys next time for us and have a more solid Trusts Attorney Las Vegas experience.