Step 4 | Lesson 4.4
Business services
Where should you begin? To get started it is vital that you have the appropriate legal and administrative assistance for your UAV business.
You will work with expert mentors to develop the initial financial models required to seek growth capital and leverage their experience in how to set up budgets and manage accounting.
Every Flight to the Future lesson has seven segments that take you through a Mind Expanding Journey.
– Introduction
– Presentation
– Concept
– In-depth
– Recap
– Required reading
– Assessment
4.4.1. Introduction
What is an LLC?
Per the IRS, a Limited Liability Company (LLC) is a business structure allowed by state statute. Each state may use different regulations and have different fee structures for registering a business. Costs vary from state to state so it is a good idea to know upfront what costs you will incur to register and the yearly reporting requirements in your state or the states you plan to work in.
A new LLC must file formation documents and pay a filing fee to the state. The state will charge a one-time fee, along with yearly recurring filing fees. These fees vary by state, so be aware of your individual state requirements.
LLC formation documents are the state-specific forms that officially create an LLC. These documents are often referred to as articles of organization, certificate of organization or certificate of formation. Some states also require additional documents to create an LLC.
4.4.2 Presentation
Legal: Doing it right
In this segment, you’ll learn about the Limited Liability Company (LLC) and the legal requirements you need to know to get your commercial drone business started.
There are many corporate structures that can be utilized for Flight to the Future participants. The Limited Liability Company (LLC) structure offers the best mix of simplicity, tax advantages, and legal protections for program graduates.
Forming a Limited Liability Company (LLC) protects the business owner by shielding their personal assets from the assets and operations of the business.
Without forming an LLC (or some other type of legal entity), the owner and the business are one and the same.
Watch the teaser
4.4.3 Concept
How to protect your business
In this segment, you’ll gain a general understanding of how to mitigate risks and liability while operating your commercial drone business. In fact, one of the core responsibilities as an UAS provider is to manage risk.
In particular, you’ll learn about aircraft liability, UAV hull insurance and how AD has you covered for your first year of operations.
From a broader perspective, UAV operations create unique risks for UAV business owners who own and use drone equipment. How to protect your business is mostly concerned with the importance of having the right insurance coverage.
Watch the teaser
4.4.4 In-depth
Key steps for LLC formation
Submit for LLC approval
Determine the number of members or owners of the company you are forming, since each member will need to be listed when filing the paperwork. Research and pick a unique name for your business. Determine how you want to handle your yearly required state filings.
Get your Federal Employer Identification Number (EIN)
This is a free service done directly by the IRS on their website. The business name you chose for your state filing must be identical to the one you use to obtain your EIN.
You will also need to obtain any business licenses required by your state and also register, if required, with the state department of revenue, so that you can collect and pay sales tax.
4.4.5 Recap
Lesson summary
Describing what your business does is required
A new LLC must file formation documents and pay a filing fee to the state. LLC formation documents are the state-specific forms that officially create an LLC.
These documents are often referred to as articles of organization, certificate of organization, or certificate of formation. Some states also require additional documents to create an LLC.
Mitigating risk
Despite how proficient you are as a UAV pilot and all the best practice attempts you have made to manage risk, accidents can still happen.
Accidents can cause serious injuries or even death, and the UAV or other property can be damaged or destroyed. Thus, insurance coverage for aircraft is extremely important.
4.4.6 Required reading
Lesson library
Required
– Money under 30, Should you form an LLC for Your Small Business
– IRS Employer Identification Number, Understanding Your EIN
– Forbes, 10 Key Issues In Setting Up An LLC
– Corporate Direct, Top 12 LLC Advantages And Disadvantages
– Entrepreneur, The Many Benefits of Forming an LLC
– LegalNature, 4 Basic Advantages of an LLC
For advanced readers
– The Balance Small Business, The Tax Advantages and Disadvantages of an LLC
4.4.7 Assessment
Lesson quiz
When forming a Limited Liability Company, you must
– Have a shared bank account so you can pay your personal expenses.
– Select a name that is unique and not shared by any other business.
– Register your business in every state you will use a UAV.
– Create an operating agreement.
Ten multiple choice questions. An 80% score is needed to advance to the next lesson.
