This is the next article in the series on how to start a business with confidence in Oklahoma.  In the previous post we discussed the basic steps in starting a business.  This article will focus on the costs associated with starting a new business.

Whether you are finally taking the plunge to start your dream business or add on to the existing one, such endeavors are not without own set of challenges.  The process can be challenging and overwhelming.  If you are seeking legal counsel for entity selection, entity formation, and legal documents execution, we are here to help.  Contact us online or via telephone to get in touch with a business law firm and talk to a business attorney.

Creation of an Oklahoma LLC is not expensive

To create a Limited Liability Company in Oklahoma, the Articles of Organization must be prepared and filed with the Secretary of State.  The actual application is only one page long and has a filing fee of $100.  As soon as you get a confirmation from the State, BINGO! You just created an LLC.  The bare minimum creation of an LLC is fairly inexpensive.  After the filing of the Article and the payment of the fees, you are set.  The process is simple enough that you can do this yourself without the assistance of an attorney.  However, the many costs associated with the LLC and business operations depend on multitude of factors.  We will discuss some of them in this article.

Cost Associated with starting an LLC business in Oklahoma

As discussed earlier, the bare minimum creation of an LLC is fairly simple and relatively inexpensive.  However, there are other costs to be mindful of before starting a business.  Naturally, the total and the types of expenses depend on the specific business endeavor, which is hard to determine with precision.  So, we have compiled a list of expenses that are common to many new businesses.

Web domain: In the current age of social media and the internet, it’s not just a wise decision to have an online presence but a necessity.  A sharp, informative, and user-friendly website helps build business credibility and enhances the user experience, fostering trust and encouraging sustained user engagement.  But first, you must buy a website domain.  The cost of a domain depends on the registrar you are buying from and the type of the domain name.  According to GoDaddy.com, generally speaking, a domain name can cost you anywhere from $2 to $20 per year – though some prices may be higher.

Website: Creating a website is different than registering a website domain.  Think of buying a domain as purchasing the land, and creating the website as putting a building on that land.  After registering the domain, it’s time to build a website.  There are many DIY (do it yourself) website-building tools that are relatively inexpensive and easy to use – GoDaddy, Wix, and Squarespace just to name a few.  DIY websites can cost as little as a few hundred dollars a year while a professional web designer can cost several thousands.  It’s crucial to weigh these costs against the benefits while keeping your business needs and goals in mind.

Operating Agreement: After the LLC’s creation, it’s time to set the rules, regulations, and provisions that govern its operations.  This is achieved by drafting and executing an operating agreement.  In addition to laying out the rules, this document also outlines member’s ownership interests, their rights and duties, and the distribution of loss and profits.  The Articles of Organization filed with the State does not list the member’s ownership interest, which is instead outlined in the operating agreement.  For a simple sole-member LLC, creating an operating agreement using one of the online legal form generators may suffice.  This can cost as low as $100 or you can hire an attorney to draft one for you which can cost anywhere from a few hundred to a few thousand dollars.

CPA or accounting: Starting and operating a business is riddled with steps that have numerous tax implications, therefore tax planning is crucial. The form of business dictates the types of taxes owed and how to pay them.  Some of them include income tax, self-employment tax, employment tax, excise tax, and state-specific taxes such as sales tax and property tax.  It’s wise to hire an experienced accountant to help you navigate the state and federal tax requirements.  The typical accounting fee for a small business falls anywhere between $1000 to $5000 a year.

Required Licenses: Oklahoma does not have a general license requirement.  However, certain professions, occupations, or businesses may require a license, permits, or registrations before starting operations.  In addition to the State license and local licenses, certain professions may also have federal license requirements.  For example, short term rentals such as Airbnb may require a City or County specific permit, while a federal permit may be required if your business involves drilling oil, natural gas, or other minerals in federal land.  Contact the State or Federal Agency that regulates the area of business you are involved in for inquiries into fees and processing time for permits and licenses.

Initial capital contribution: It goes without saying that a new business needs funds and without it, the business cannot function.  The kind and amount of initial capital contribution inevitably depends on the type of business endeavor.  This specific amount of money or the type of contribution is generally listed on the operating agreement.  The most common contribution is cash, but you can also contribute real estate, equipment, and vehicles.  If you contribute service or labor to get the business up and running, then you have sweat equity in the business.

OKC Business Lawyer: Serving all Oklahoma Residents

Our passion is helping business owners and entrepreneurs on their unique journey.  Every situation is different, and your business needs must be assessed before taking legal steps.  If you are thinking about starting a business or growing an existing one, we are here to help you navigate the process.  Contact us online or via telephone to get in touch with a business law firm and speak to a business lawyer.