Business formation

[moscupeter]

Hello all, its been a while since I last been on this forum and I hope this gets posted in the right place. After 6 years of working for an independent broker I decided to go on my own starting January 1st. My question may be laughable to some of you but I don't know what's the process for a business formation and I am having a hard time getting some straight answers. I filled for an LLC through Legalzoom but they are absolutely clueless ( as I am). I was under the impression that they will handle everything for me but the entire process is getting a bit complicated. Here are my questions if anyone can help:

1. Do I first apply for a business license with the department of insurance?
2. Once the license/ business name is approved I use the same name to file for my LLC?
3. Does my DBA and and LLC name need to be identical?
4. Does the proposed name need to include the word "insurance" ?

If anyone went through this I would greatly appreciate the steps you took.

Calling Legalzoom is about 1 hour waiting to speak to someone that's more clueless than I am. Trying to get someone from the department of insurance on the line is impossible.

Thanks for your help!

 

[myfakename]

There is a reason you pay a lawyer to do this.

 

[marindependent]

Most attorneys will not know much of this information. You would need a business attorney that focuses on Insurance formations, which is likely to be expensive.

Much of these answers depend on what state you are in. The various DOIs have differing rules about this. In California your business name, generally needs to be approved first.

I would direct you to your state regulator and look for Entity Establishment or Business Formation information. You may have to call them.

Keep in mind that your agency and your corporate name are necessarily one and the same thing. Creating a corporation does not necessarily make it a legal insurance agency in some states. Creating an Insurance Agency does not make it a Corporation.

In general your attorney will only get you as far as the incorporation. You will have to do the DOI legwork.

 

[Markthebroker]

I actually did this about a year ago, and it was a lot of work. I did it myself. I don't know if it's changed, or how it would go in your state. You are going to need to email the secretary of state, and the DOI, probably each several times. Email is the way to go, as it is more efficient, and the answers are more succinct. Plus it seems you are likely to get better answers since it's in writing and they are held to it, whereas on the phone they seem to spew out whatever nonsense moves them at the moment.

 

[EugeneM]

While you are at it I would check out the search function on the forum if you haven't already. Starting agencies is one of the most discussed topics. You are missing out if you aren't, lean on others experience. That's what this is for

 

[moscupeter]

Thanks everyone, I managed to get it figured out with the help of a fellow agent. To help others in the future, for the State of CA it works like this( I still haven't got mine finalized but these are the steps I took so far). This is based on my experience with LegalZoom

- Form your corporation ( LLC, Inc, etc.)
-LegalZoom sends it to Secretary Of State for approval
- Apply for FEIN #, typically takes 24-48 hours for approval
- Get your bond & E&O ( now that you have a business + FEIN)
- Apply for fictitious name with the DOI ( name will need to include the word "Insurance" followed by "services" or "solutions", etc.)
- Now that the business name has been approved and have all the items above you can go ahead and apply for the business license.

At least these are the steps I took.

Thanks,

 

[marindependent]

Its a pretty solid description moscupeter.

However, I would caution future readers as its not a simple process and a bit of a chicken and egg scenario.

What happens if you choose a corporate name only to discover that the DOI does not want you to do business under that name?

Assuming you want the DBA and the Corporate name to be somewhat similar it 'might' help to get the DBA approved [albeit without the LLC or Corp ending] before incorporation.

If you are using your name as the agency name, as in "the John Smith Agency Inc" its probably not an issue, but if you are going for something akin to "the Los Angeles Insurance Agency Inc" its going to be an issue.

But even before you do all of that I would search to see if the name you want is already taken. You can sort of do that here: : License Status - Name Search

Next, know that "Corporate Names. Except as provided in Sections 2106 and 13409(a) of the Corporations Code, the Secretary of State shall not file a document or grant a name reservation that includes a proposed corporate name that is the same as or deceptively similar to an existing corporate name." which I read to mean that you might not be able to get the Corporate name that you want.
Therefore you should also check the SOS site to confirm that your proposed name is available. You might be able to check this here: Business Search - Business Entities - Business Programs | California Secretary of State

Frankly - there is NO GOOD SOLUTION to this problem until the SOS and the DOI in California come together on it. Its possible that I do not understand sections 2106 and 13409, but I don't know.

My own experience setting up my agency names was a governmental nightmare.

Now on to getting appointments at the Agency Level and Paying California's crazy Corporate tax.