Quote from PlinytheTrader:
I am not sure about the rules in your certain state, but the costs should be minimal. All you need is an EIN (free or used to be), an operating agreement and to file the proper paperwork with your state's business registration department(it was $100 in my state). You can find free versions of sample operating agreements online and just reword a lot of the parts that either don't apply or need to be changed for your specific situation. All in all its pretty easy and cheap once you do the research on the requirements for your state.
Thanks to you and others for the replies.
So, basically, setting up a multi-person LLC (the guy I spoke with said DON'T us a single-person LLC because they are disregarded entities for trading purposes, so you can't legitimately use "trader" status within them) is a turnkey process? Which makes sense, since they've been around for long enough.
So, what could the guy have meant by the possibilities of screwing it up? LLCs aren't just for trading, obviously, but I was reading that if you put that it is being formed "for any legal purpose" (or words to that effect), that basically enables you to use it for trading or anything else and then when you do your taxes, you would flow your trading income and expenses through the LLC and it would just as straightforward as if you were using the LLC to run a restaurant.
Again, this is all new to me, so I might be missing something crucial about the "trading-specific" aspects of the LLC structure.
If so, please, someone point it out. Are there special forms I have to fill out as a trader that someone running a restaurant would not need to fill out, for example?
