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Your Limited Liability Company

Book Review of: Your Limited Liability Company

An Operating Manual

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Review of Your Limited Liability Company, by Anthony Mancuso (Softcover, 2013)

(You can print this review in landscape mode, if you want a hardcopy)


This book really isn't an operating manual. Its main text, consisting of 250 pages, is mostly about what you need to do to protect your LLC from attack by the Institute of Reprobates and Sociopaths. At the end of this review, I'll provide more detail on this.

My impression is that about 15% of this book had to do with preventing other sorts of problems, such as preserving your LLC status (it's critical to operate your business as a business so it doesn't become a sham) and keeping transactions straight from an LLC perspective. And maybe 5% focuses on other important aspects of running an LLC.

What's missing from this book, if it is to be an operating manual, is extensive. I have an MBA, so I can say that with authority. I won't go into the details here. Based on the devastation I have seen the Institute inflict on businesses that did nothing wrong but just didn't know how to avoid an attack, what's in this book is important nonetheless. I have seen what happens to businesses when they don't know the "rules" that Mancuso explains.

And he explains them very well. Not only are his explanations easy to understand, but he uses clear examples to ensure the reader "gets it" and can apply the knowledge.

The fact that this book doesn't deliver on what's promised in its subtitle does not detract from the fact this book is a "must read" for all LLC managers and owners. The subtitle of a book is often written by someone who has merely glanced through the book, so it's best to discount those anyhow. The three bullet points on the cover do accurately reflect what's in the book, albeit mostly from perspective of avoiding or blunting an attack by the Institute of Reprobates and Sociopaths:

  • Hold legal meetings
  • Document LLC actions
  • Avoid mistakes and lawsuits

Though I found this book to provide thorough and accurate guidance to the Institute of Reprobates and Sociopaths attack problem, it took me a while to warm up to it. That's because I was immediately put off by the author's highly anachronistic paper-orientation that was so evident early on.

For example, he talked about taking minutes at a meeting as if the secretary is writing notes on paper. The last time I was responsible for the minutes of a meeting was about 6 years ago, and even then it was done in real time on a laptop. The minutes were e-mailed to all attendees right after the meeting ended. And in the back of the book is a huge number of paper forms; it would have been better to simply refer to a Website where PDFs can be viewed and/or downloaded.

He also talks about keeping a "binder," something that isn't going to accommodate the digital file modality of today's typical business. You can adapt the discussion to a modern modality, but it would be nice if the author did that work for the reader. I've helped several businesses that had made a total hash of how they organize their electronic files, simply because they didn't know how to organize them. Rather than hobbling themselves with a paper binder, they need to understand information hierarchy and such things as how to sensibly name their digital files.

Beyond the digital file keeping and the MBA stuff, there's a whole new area that is important for the managers of any LLC to address. With its paper-based perspective, this book totally overlooked this area. This area includes such things as:

  • How to properly represent your LLC on its Website. Getting this wrong is easy to do, and it can be costly.
  • Social media do's and don'ts. Talk about a landmine field!
  • E-mail practices, such as disclaimers or filing and keeping of electronic correspondence.
  • Whether to, or how to, provide your Articles of Incorporation to customers/clients who want you to send those before they'll list your LLC as a vendor.
  • How to prepare your LLC's W-9 for vendors who demand a W-9.
  • What to do about faxes, when they are only an image file and their contents typically can't searched on your data drive (my advice: don't send or accept faxes).
  • Best practices for digital advertising, from an LLC preservation standpoint.
  • Issues affecting electronic banking and payments (e.g., PayPal accounts, e-checks, recording vendor 3e-payments).

The above list is only partial. These items can have enormous impact on a business, but the author ignored this entire domain of modern-day business issues.

Here's yet another important question, though not really of the electronic variety. It arises more often today, because of the electronic nature of conducting business.

What should you do when the Institute of Reprobates and Sociopaths classifies your LLC's legal name as a DBA, thereby causing your records to mismatch when a client,  vendor, or electronic marketplace company does a check against the Institute's records?

The only solution I know of is to break the law and give the other party the fictional name the Institute demands (e.g., "Bob Smith, DBA Arizona Fishing Bait and Boat Tours, LLC").

When I commit this particular crime, I make a point of informing the other party of the discrepancy so they understand this is NOT a DBA (proprietorship) but an LLC. It is a separate legal entity, not a DBA of anyone involved in the LLC. I also follow up with a real-time phone conversation to make it clear I am not trying to dupe them in any way. Thus far, everyone has understood the problem and agreed with the solution. And that level of disclosure and follow-up is what I advise, if you decide to "go along to get along" so that business can proceed despite this problem.

I think this is DBA thing is a trap the Institute puts LLCs into, so they can later claim they have legal authority to disregard your LLC entirely. Huge, huge issue. Not addressed at all in this book.

This book was the 7th edition. Clearly, it has not been really updated since the first edition because its scope appears to remain confined to the pre-Internet era. I don't know what the previous editions contained, but an updated version would address the updated business environment per the points I made above.

This core of this book consists of 16 chapters occupying 250 pages. It also has three Appendices consisting of paper forms. These aren't sequentially numbered, so I don't know how many there are. If I had to guess, I'd say 100 pages. None of which should be in the print edition, as they really serve no purpose but to bulk out the book.

On page 257 is a chart "Files Provided on Nolo's Website," and this should be all that's retained from those Appendices. Giving the book a shorter form factor so it can sit on a book shelf (as a reference) without collapsing would also be nice; that, or give it stiff covers to achieve that purpose.

This book could use a good update, as noted above. Even though it's so outdated, it's still essential reading because of what it covers. The core advice is fairly timeless, and every LLC manager should become very familiar with the advice given. What I've seen in the small business world (admittedly, anecdotal and from a small sampling) is that many people go from sole proprietor to LLC to get the legal protection of an LLC but then don't treat their business as an LLC. The effect can be to destroy that legal protection, even though that was not the intent of the LLC manager(s).

There's also that Institute of Reprobates and Sociopaths problem that the author spends most of his energy addressing. Any good tax attorney can tell you plenty of horror stories laced with "If only my client had...." commentary. With this book, you will be the client of whom the attorney says, "It's a good thing my client did...."


About the Institute of Reprobates and Sociopaths issue

It's interesting that when LLCs started (in Europe), they were classed as corporations (for example, look up the meaning of the German "GmBH"--but look for an older reference or an accurate translation ). The Institute unilaterally changed that to "company" so they could more easily prey on American small businesses (though many large businesses also have an LLC formation). Allegedly, only our federal legislature can pass laws; this bold move by the Institute is proof yet again that is not the case.

So because we Americans live in fear of a costly, useless, and destructive organization that is inexcusably funded by our own tax dollars and responsible to no authority other than its own, we must devote a significant amount of resources to not giving that organization a flimsy excuse to attack us. Not that they need an excuse, but it's best not to give them one. Toward this end, I found the book very informative and helpful. In the event you are attacked, if you've followed Mancuso's advice your business' chances of survival are hugely increased.

In fact, the Institute will often back off when they can see a victim has very strictly "played according to Hoyle." On reason why is individuals at the Institute are seeking personal gain (for example, see Kevin Brown and Lois Lerner's Hoyt Fiasco scam, in which they made $103 million "disappear"). Like other criminals, they are looking for the easy score. Just as locking your doors at night can often make the visiting burglar move on to the next house, keeping your LLC in order can often make these criminals move on to another LLC.

This book is essential reading, because the single biggest threat to any business, and to LLCs in particular, is an attack by the Institute. This fact is why the 1040 system compliance costs dwarf the revenue raised by the Institute--businesses pay legions of accountants, advisors, and tax attorneys to make it through the byzantine mine field of "tax" regulations created by an unelected body of unaccountable psychopaths.

Note that when you count the economic drag of just these compliance costs, you can easily produce the math that shows the Institute costs the federal treasury more revenue than it raises. Members of CONgress, dim as they are, must surely be aware of this.

In fact, every penny of the 1040 taxes raised goes to pay the interest on the federal debt, meaning it goes directly to the nonFederal nonReserve, which has stated before CONgress that it cannot be subject to an audit by the GAO because it is a private corporation. What a scam! Nevertheless, we can't break the rules these banksters and their Institute of Reprobates and Sociopaths put into place.

Anyone who looks at the numbers can see that the purpose of this organization is something other than funding the government since it works in the opposite direction of such a goal. That, combined with the fact they lack any meaningful oversight, makes them very, very dangerous. Advice like what you find in this book is really your only viable defense.


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