Friday, October 31, 2008

Written In the Stars?

I'm going to use the occasion of Halloween to detour into the realm of superstition. Let's see what my favorite pseudoscience, astrology, portends for Truth Rally. For the company's natal chart, I will use the date stamped on the Articles of Organization by the California Secretary of State (as opposed to the date of our organizational meeting, which marked the beginning of business activity).

Danke, Astrodienst, for allowing me to generate this free natal chart for Truth Rally (click to enlarge):

Truth Rally Natal Chart
There are many different types of chart analysis, but I will leave that to the experts. I do notice, however, that the Sun and the ascendent, which are the two most important signs, are in Libra. Qualities associated with Libra are fairness and impartiality, as signified by its zodiac symbol, the balance. This would seem to bode well for a company that intends to find the truth and have the credibility to be believed. Mercury, which represents communication and mentality, is also in Libra.

By the way, my co-founder, Mike, is a Libra. Perhaps the stars are aligning for Truth Rally.

Thursday, October 30, 2008

Backstory, Part 1

Up to this point, I have made only two vague references to what Truth Rally is. That was intentional. Primarily, this is a journal that focuses on the business side of the startup process. My hope is that other entrepreneurs will find our experience informative and encouraging.

But some might be wondering, What is Truth Rally? Not to be coy, but to answer that question I will start by answering the question, Why is Truth Rally?

When I began closely following politics about twenty years ago, I found that the truth was often a casualty of the political process. I figured it was just an unfortunate part of the system: the price we pay to protect free speech. But over time, it seemed to be getting worse. Across the political spectrum, politicians, news anchors, academics, reporters, celebrities, and commentators were increasingly sacrificing the truth to further their own careers and ideologies.

This decline of our public dialogue steepened even further over the past decade, leading us to become a nation divided by opposing truths. Clearly, this reality is absurd, because there is such a thing as the truth. And until we the people know what the truth is, it will be nigh impossible for us to debate honestly and solve our nation's and the world's ills. That's where Truth Rally comes in.

Stay tuned for future installments.

Wednesday, October 29, 2008

The Tax Club

I received a call yesterday from a representative of The Tax Club, a tax-preparation company that gets referrals from LegalZoom. When we ordered our LLC, I checked a box requesting to learn about their service. During our first conversation, we set up an appointment for this morning.

This morning I received a call from the same representative, and I am disappointed to report that my spidey sense was tingling throughout:
  • He called 31 minutes late. He also failed to acknowledge—much less apologize—for his tardiness. Punctuality is important when establishing a working relationship. And so are good manners.
  • He sounded like a salesman. He was unctuous and seemed only to feign interest in our company. His approach bordered on a hard sell. As it turns out, he is a salesman.
  • He waited 20 minutes to tell me the cost. The large upfront fee of $1497, which itself is another red flag, is probably the reason why. There are also monthly and annual fees totalling about $277 per year.
  • He asked for my credit card number. This is the mother of all red flags. If his company's service was as good as he says, he wouldn't need to hustle me.

After I got off the phone, I googled them and my suspicions were confirmed. I will probably never know the accuracy of these complaints (er, horror stories), because I will never do business with The Tax Club. I simply do not respond favorably to any of their sales techniques. One of the reasons I chose LegalZoom is that they let their products sell themselves.

If LegalZoom wants to keep their good reputation, they should investigate The Tax Club and the complaints lodged against them, and act accordingly. I will be contacting LegalZoom to report my experience.

Tuesday, October 28, 2008

LegalZoom Delivers Again

I forgot to photocopy Form SS-4 before signing and returning my copy to LegalZoom. So I called their customer service, and spoke to a representative about getting a copy for my records. She was very helpful, and promptly emailed me an electronic version of the completed form. That's the kind of service I expect, but seldom receive.

Monday, October 27, 2008

The Taxman Cometh

Every startup owner knows that his or her business has both federal and state tax obligations. But don't forget about business taxes at the municipal level. They are typically a smaller expense, but you might not be given as much time to comply before penalties are assessed. The city of San Diego is one such municipality. Luckily, I found out about it in time.

Anyone doing business in San Diego—including self-employed individuals and contractors—must file a business tax application within 15 days of starting business activity. Because our web site has yet to launch, we technically haven't started business activity. I spoke with a representative at the Business Tax Program, and she said that we are permitted to specify a future date; however, we don't know exactly when that activity will begin. Therefore, we decided to play it safe and just use the organizational date of our LLC.

San Diego's business tax includes a processing fee ($25), a zoning fee ($17), and the annual fee ($34) for a total of $76. A zoning fee for a mailbox at a UPS Store? As it turns out, little of the application applies to a web-site-only company. However, if you have a more-conventional business, then other licenses and permits might also be required. Check with your local government to find out.

Sunday, October 26, 2008

AdSense Adds Cents

We intend—initially, at least—to use Google AdSense on Truth Rally to help defray registration and hosting expenses. So I applied for an AdSense account in order to begin learning everything about the program. It makes sense—and cents (groan)—to start using it now so that we'll be ready for the launch of the actual web site. I definitely don't want to be futzing around at the last minute.

After my application was approved, I dove right in and found myself lost in a sea of instructions, agreements, policies, guidelines, tips, webinars, forums, demos, channels, formats, reports, etc. I must admit that the sheer volume of information is a tad overwhelming at first. To my surprise, though, it only took a few minutes to add three content-driven AdSense gadgets to this blog: two in the right-hand column and one at the bottom of the page. Thank you, Google, for making it so intuitive.

Update: Google, obviously aware of the immense amount of information regarding their AdSense program, sent me an email this morning (Sunday, October 26, 2008), which read in part:
As a new AdSense publisher, you've got a world of information to absorb.
They aren't kidding! If I were still a kid, my response would have been a three-word phrase starting with "No" and ending with "Sherlock."

Saturday, October 25, 2008

Tax Seminar

A good friend of mine, who is also running his own company, invited me to attend a business tax seminar this afternoon. A CPA gave a 90-minute presentation, in which she reviewed the numerous tax advantages of running a home business. Unfortunately, she didn't discuss any issues dealing specifically with the operation of an LLC or corporation. Both my co-founder and I have run separate sole proprietorships for many years, so there wasn't much new material presented. I did ask a question that applies to our case, but quickly realized that we will need to hire a CPA to set up our bookkeeping* system and to complete our tax returns. Stay tuned.

*This word and its variants are supposedly the only English words with three consecutive pairs of letters. Yes, it's true: I enjoy the English language.

Friday, October 24, 2008

WaMu Booboo

I received my Washington Mutual business debit card today. Since it can be used anywhere MasterCard is accepted, I can now easily make online purchases directly using my business account. As I wrote earlier, avoiding commingling of personal and business assets helps to prevent others from piercing the corporate veil.

WaMu did, however, apparently make a mistake: I should have received one debit card for me and one for my co-founder. Instead, both cards were issued in my name. I called customer service, but their small-business banking department was already closed. I'll have to call them tomorrow to straighten it out.

Update: I spoke with WaMu this morning (Saturday, October 25, 2008). They cancelled the duplicate debit card, but Mike will have to call in to get a debit card issued in his name.

Thursday, October 23, 2008

LegalZoom Survey

LegalZoom sent me an email that asked me to take a customer survey:

We're very interested in your feedback and we have created a survey for you to share your thoughts. We know your time is valuable so we've kept it brief.

They weren't kidding about it being "brief." The survey consisted of one question and an optional comment box. For the question, I gave them a 9 out of 10 on whether I would recommend them to people I know. (I rarely ever give out a perfect score.) In the comment box, I pointed them to this blog; if they're serious about customer feedback, they'll take the time to read it.

I have an additional observation about their customer service representatives: They are knowledgeable about and helpful with the order process; however, they are not able to answer most questions beyond that scope, nor are they able to offer anything approaching legal advice—which is fine. It's just important to keep that in mind when using their service. If you need legal advice, go to a lawyer; if you need legal forms, go to LegalZoom.

Wednesday, October 22, 2008

Policy of Truth

I was testing out some of Blogger's gadgets today, and ended up embeddeding the video of "Policy of Truth" by Depeche Mode. Why? It's a cool song with "Truth" in the title by one of my all-time favorite bands. Besides, it was a little quiet around here, and I thought readers might enjoy some music while they check out the blog.

Yes, I know that the song is actually warning against strict adherence to a policy of truth; however, it is speaking more about openness ("Hide what you have to hide") than honesty, and specifically about openness in personal relationships. Truth Rally, on the other hand, will be explicitly pursuing a policy of truth concerning issues in the public sphere.

If you like the music, check out Depeche Mode's official channel on YouTube.

Tuesday, October 21, 2008

Bank Account

We opened a free business checking account today at Washington Mutual—a safe move considering they've been acquired by JPMorgan Chase. We were helped by their business relationship manager and a senior representative, who were pleased to find that we obtained our LLC through LegalZoom. They told us of some unfortunate individuals who used an attorney or other Internet service to form an LLC, and ended up with an inferior product that made it difficult to set up a business account. For us, though, everything went fine. They even threw in a free box of checks. Thanks, WaMu!

Organizational Meeting

My co-founder, Mike, and I conducted the organizational meeting for our LLC today. As the only owners, we were elected managing members. Mike was also elected Secretary; and I, Chairman and Treasurer. Mike then presented the Articles of Organization, Operating Agreement, specimen certificate of membership, company seal, and banking resolution, which were all approved and adopted. We signed and dated the Operating Agreement. Then, the membership certificates, which indicate ownership interests, were stamped and issued. As Secretary, Mike recorded the minutes of the meeting.

The meeting went smoothly, especially considering that it was our first. LegalZoom provided a sample organizational agenda, as well as a template for the minutes, which made it easy. The only thing not supplied was the banking resolution, which can be obtained through your bank of choice. Though it's not explicitly mentioned in LegalZoom's materials, meetings should follow rules of order.

Sunday, October 19, 2008

Deluxe LLC Kit

Here are a few photographs of the deluxe LLC kit we received from LegalZoom. It includes customized membership certificates, a CD-ROM that contains forms essential for running an LLC, and a steel embosser with our company's official seal. For a complete list of all contents, click here.

LegalZoom LLC Kit
LegalZoom LLC Kit
LegalZoom LLC Kit

Friday, October 17, 2008


The deluxe LLC kit from LegalZoom arrived today—much sooner than I had originally anticipated. They state that the Standard (i.e., mid-level) package should arrive in 20 to 35 business days; however, ours arrived in only 10 business days (9, if you exclude Columbus Day). This quick delivery seems more like the priority rush service of 7 to 10 business days included with the high-end Express Gold package. Well done.

I made a cursory review of the kit, and everything appears to be in order, including correctly spelled names and addresses. I will post more on exactly what we received after I've had a chance to carefully review all of the materials.

Thursday, October 16, 2008

It's on Its Way

This evening LegalZoom sent me an email, which read:

Congratulations, we received your articles back from the Secretary of State and your final documents are now ready. Your order has been shipped and you will receive your package shortly. Please make sure to read the instructions in the final letter enclosed in your package.

They sent the package via FedEx, and have included a hyperlink to the tracking information. Let's see. It was last scanned in Sun Valley, California, and is scheduled for delivery tomorrow. Cool.

Business Address

Yesterday, I picked up the keys for our new business. Wow, that sounds important. Actually, it's just a mailbox at a UPS Store. Considering that our company has "Truth" in the name, it is especially important that I make this clear. I have no desire for anyone to believe that a mailbox is an office suite, a once popular trick used by frauds who specified their mailbox numbers as "Suite" numbers. Besides, doing so would violate the terms of the mailbox service agreement I signed, not to mention state and federal law.

So why then are we spending money on a mailbox? For the same reason we will be setting up a separate bank account for our company. In order to maintain the limited-liability protection of an LLC or corporation, it is important to observe all corporate formalities and not to commingle personal and business assets. Otherwise, a plaintiff could seek to collect debts or damages from the corporate principals (i.e., my co-founder and me) by piercing the corporate veil. Although this is typically only applicable when a corporation is used for an untoward purpose, we'd rather not take any chances.

Wednesday, October 15, 2008

Almost Finished

I checked our order status today at LegalZoom, and was surprised to find that they are already preparing our order for shipment:
Preparing your final documents Completed 10/14/2008
Preparing your order for shipment In Progress 10/15/2008
At this rate, the documents will be shipped this week, and we should receive them by next week. Excellent.

Tuesday, October 14, 2008

Employer ID Number

I received the following email from LegalZoom today:

You chose LegalZoom to obtain your tax identification number for LLC [sic]. Your tax identification number is: [redacted]

Attached to the email is a copy of IRS notice CP 575 B, which contains the assigned Employer Identification Number (EIN) and further instructions. This notice was sent in response to IRS Form SS-4, which was filed on our behalf by LegalZoom as part of their standard package. According to the EIN prefix we were assigned, they filed the SS-4 on the Internet.

Truth Rally LLC is now officially recognized (Woo-hoo!) by the IRS (D'oh!).

Monday, October 13, 2008

Officially Aproved?

This afternoon, I received an email from LegalZoom, which read:

Congratulations, we just received notification from the Secretary of State that your articles for Truth Rally LLC have been filed on 10/8/2008 7:00:00 AM. We are currently preparing the documents for your order. Once we receive the official filing documents from the Secretary of State, we will ship your order and notify you via email when your order ships.

I then checked our order's status on their website:

Congratulations - your LLC has been officially approved by the California Secretary of State. We are now preparing your final paperwork, which will be delivered to you shortly.

So has it actually been officially approved, as in state certification? Perhaps today's email is just lagging the status update on their web site. The Secretary of State observes Columbus Day, so the last day anything could've happened is last Friday. Out of curiosity, I called LegalZoom's customer service to find out. Unfortunately, the representative and I had a slight communication gap, and I still don't know the answer.

In any event, it seems like things are progressing faster than promised.

Tuesday, October 7, 2008

Secretary of State

LegalZoom informed me today that the documents for our LLC have been completed and sent to the California Secretary of State for filing. The name we chose for our LLC appears to be available according to the results of their preliminary search; however, they caution that the name will not be officially approved for use until it has received state certification. Per an earlier conversation with customer support, they expect the approval process to take two weeks, as California currently has a backlog. Stay tuned!

Update: A LegalZoom customer-service representative called today (Thursday, October 9, 2008) to inform me that our LLC documents have been officially filed with the Secretary of State.

Friday, October 3, 2008

Forming an LLC

My co-founder and I started the formation of a Limited Liability Company today using LegalZoom. The application process was fairly painless, though the help information provided with some of the questions should have been more detailed (e.g., the pros and cons for each choice). As for the price, it was reasonable given the high quality of customer service we received. I used promo code LZSAVE to cut 5% off the standard package price.