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Have them break it down for you. Creating a LLC is one thing, but what's the exit strategy? What state will it be registered in? Is it going to be just one company or layered? Are you both going to have to put money in to establish equity? Does starting the business start a specific timer they are concerned about? What does your partnership contract look like?

If they have gone through it before, it's probably the exit strategy. How you set up the company and what state you register it in can impact your value to potential purchasers (and how easy it will be to transfer ownership).

I’ve started several successful companies, both LLC and C-Corp, and the real answer to this question is what you consider “starting a business”

If you mean having a corporate structure that can begin raising capital for operations and allow you to start offloading tax liability as business expenses, then you absolutely do not need 50k - 10-15k max for an airtight functional business entity. This means limited expenditures on equipment/office space/social media or advertising and forgoing salary for anyone as an early partner.

If you mean having a physical location, production equipment, investing in a social identity/presence, retaining legal counsel for regular use, or paying salaries, then yes it is quite expensive, and even 50k would only get you a few months of operation.

The most important thing people forget about is that having a business is as much about offloading tax liability and providing legal protection. My business mentor and partner has 27 LLC companies and 5 C-Corps. One mistake that gets made a lot is keeping everything under one corporate entity. Every step of your business that costs money should be it’s own entity so that all elements of operation and production, as well as many of the partner’s personal expenses, become tax deductible. If done properly, none of the partners should see any significant tax liability from anything but salary and capital gains (when you are revenue positive).

If you’re doing a startup, some firms will do this sort of work for free. You’d have to pay the out of pocket filing costs. In return, you stay with them as you build the company. If you want Delaware formation and registration in Massachusetts to do business. The patent filing costs won’t be free. The actual filing fees are pretty reasonable but you should use someone knowledgeable to avoid headaches later. Granting founder shares is always interesting.

Registering a business itself is cheap (like less than a $1000 cheap), but you have additional considerations (namely IP).

Who’s the parent holder? Do you have grants, or perspective partners? The additional cost would come from setting up a proper operating agreement and putting some seed funding in place, but every situation is different.

I used BizFilings many years ago and I think it cost maybe $500 total for an LLC.

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Start-up costs can be significant, registration costs with carry state to state but are usual a couple hundred or less. I recommend forming the company before seeking finding as it can protect you and your personal assets from your or your partners business mistakes.

Take the $1.1 million, invest it and get another job. With the way the market has been, you won't make $75k to live on. You'd probably lose more than that.

It totally depends what you're trying to do. For biotech I'd imagine the costs for things like licensing, liability/insurance (could include retaining an attorney), patents, machines etc would stack up easily. Legal registration of the company itself, again it depends but wouldn't surpass more than a few thousand dollars at the absolute most. Trademarks can be pricey though, maybe he's including that?

Tdlr; it totally just depends

love the name obi wan jabroni! This is so true. My first LLC I went for the fancy binder and corporate seal along with the name search ein filing and it was just under $2k from Legal Zoom. My second one was a flat $1,000 from a lawyer.

The patent is a different story over a year and $250k before it issued.

> it doesn't look like it would cost more than $1,000 for LLC, EIN, and the legal legwork. Maybe $500 more for trademarks through the post office. Am I majorly missing something here? I wanted to solidify our company asap to secure names, social media profiles, domains

sure, sounds ok. But that isn't "starting a business", that is just doing some paperwork.

If you want to do that stuff, then by all means go ahead, get a domain name, register an LLC. etc.

As a lawyer, filing for an LLC and the accompanying docs (company agreement, etc) should not be anywhere near $50k. However, if you’re dealing with patent searches, drafting, etc. then that can get very expensive very quickly.

Did you take any property depreciation as part of your business expenses? This technically lowers your cost basis so it might increase your capital gains. So that is something to think about if it substantially increases your taxes.

Personally a combination of high dividend stocks to make your 75k/year would be the way I would lean. 60% JEPI/40%SCHD will get you there.

I formed my LLC back in the mid-nineties. Very little was required: 2 computers, 2 desks, a filing cabinet, a printer, a fax machine, business cards, some office supplies and advertising literature. It still cost me near 20K. With inflation 50K would not be unreasonable especially if you are buying lab equipment. I ran it out of a spare bedroom of my house. Being undercapitalized is almost a guarantee for failure.

>I feel he has a bit of a Boomer mentality

wow discriminatory much?

you're correct that the basic business licenses should be cheap. but that's not the only thing you need to start a company.

a business license is useless without employees, a storefront or office, a website, a product or service that people are willing to pay for, etc...

This seems incredibly steep and not real. EIN numbers are free on irs.gov. Registering your business is just a filing fee with the state($100 in Ohio). The other registrations as you mentioned are low in cost.

You would probably want an attorney to draft formation documents and an operating agreement which can have some serious fees behind it depending on exactly what you want and the complexity, but I wouldn’t think more than $10,000-$15,000 worst case. Most of its just standard language fill in the blank stuff for a reputable business attorney. You could try to do this on the cheap yourself if you are comfortable with that route and it lowers the cost to <$1,000.

Good contracts are hard to write. Good contracts require good writers. Good work requires money.

Ask your partner for an itemized list if you think they will bilk you.

To start a company? Sure, it's cheap. A startup is an entirely different beast, however, in that you have expenses to get the MVP to even begin to hunt for investors

Starting a business is more than filing an LLC and paperwork. Especially something in bio med. Lawyers are also expensive.

Those are by far the least important parts of your startup, and certainly not something you need to put money or effort into until you have the actually important stuff squared away. Partner is 100% correct, at least as far as priorities go.

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4Runner and Tacoma have the least depreciation. You get one that's 2 years old and has 25k on it for like 3k less than a new one. I was always a lightly used buyer but it does not make sense for Toyota trucks.

You know that you can print these out right?

Are you buying to keep a car long term nor no? For me, a car is legit just transportation. I can careless about the fancy shit and if saving money was the goal, then I wouldn't be buying a car known to be way more expensive than neccesary like a 4runner. Soon many cheaper cars out there that can get you wherever for cheaper just as nicely.

That's not a judgment on you personally, but just pointing out that ify our goal is to save money then you have to also consider what kind of car you're buying to begin with. There is no blanket answer per se. Trading in though is a guranteed money loser 99% of the time though when you're talking every few years especially.

I guess what I'm trying to day is, you're talking about being concerned about money while buying a more expensive car than is likely needed, considering constantly trading one in, and not keeping it until you actually need another car. All things that are the opposite of being concerned about maximizing money. Decide whether you're buying to save or buying to just buy again every few years. If the latter lease I guess(?). If the former think about cheaper cars that get the job done just fine and keep until the wheels fall off.

Had mine for the last 7 years and don't plan on selling any time soon. Was cheap and gets the job done.