California S-Corp San Diego
California S-Corp San Diego Summary
Operating a San Diego business as a California S-Corporation combines the strength and prestige of a corporation with S-Corp pass-through tax advantages. These benefits include:
- Limiting personal liability against claims from lawsuits and creditors;
- Raising capital from investors by issuing stocks and/or bonds;
- Passing through profits and losses to members, thus avoiding double taxation; and
- Reducing self-employment taxes for shareholders earning wages.
All California S-Corps formed by San Diego Corporate Law include attorney-drafted articles of incorporation, bylaws, federal EIN application, S-Corporation election, and company records book with stock certificates.
Flat Fee Price
- Includes Filing Fees
- See Pricing Assumptions
- Securities Issuance by Quotation
Michael J. Leonard helped us obtain our 501(c)(3), created our bylaws, and completed all of the necessary forms to establish a tax exempt status for our non-profit foundation. He was professional, quick, and great to work with. Mr. Leonard is also very connected in the community and has referred us to useful contacts.
Michel Sproles, Sproles Empowered Youth
My experience working with San Diego Corporate Law has been nothing short of excellent. Michael Leonard is a tremendous asset, and provided us much needed assistance when forming our insurance agency. He assisted with the formation of our corporation, buy / sell agreement, company bylaws, minutes, and stock certificates. Michael is an utmost professional that I would refer to any friend or client.
Michael Fusco, Fusco & Orsini Insurance Services, Inc.
Michael J. Leonard at San Diego Corporate Law has provided GWR valuable assistance and professional advice. As a San Diego based high tech equipment manufacturer, we appreciate that we never have to waste his or our time explaining the engineering or scientific details of our situation as his strong, hands on physics and engineering background is invaluable. We are well protected with Mike looking out for our interests.
Richard Reineman, GWR Instruments, Inc.
In 2009 San Diego Corporate Law converted my Sole Propriety Engineering Company into a “S” Corporation. My experience was painless and Mr. Leonard has done an excellent job staying in contact and continues to be a great advisor. San Diego Corporate Law comes highly recommended.
Curtis Patterson, P.E., Patterson Engineering, Inc.
Michael J. Leonard at San Diego Corporate Law is not your typical attorney experience. Michael puts his full attention into understanding your needs and provides the best solution to meet your goals. I highly recommend San Diego Corporate Law to any of my friends and associates.
Jeff A. Mudd, Best-Rate Repair Company, Inc.
Working with San Diego Corporate Law made dealing with all the paper work of incorporating and setting up my business a dream! Michael is the ultimate professional and knows corporate law inside and out! San Diego Corporate Law is always available to answer questions, assist me with follow up items, and be my go-to and support team.
Elloise Bennett, AP Test Service, LLC
Mr. Leonard is competent, dependable, and gets the work done on time and within budget. He is very responsible to his customers. We would recommend him to anyone that requires a true professional.
Lidija Skolnija, anaZana, Inc.
I was recommended to Michael to help me set up a new corporation I was starting. The advice he gave me was great, and I eventually hired his services to create the agreements and contracts between myself and my business partner. Throughout the process he guided me and asked very detailed questions. I felt that he had my back and my best interest at heart. Looking back now, the contracts he wrote have saved me close to $40,000 in money that I would have otherwise had to pay. Thank you Michael. Everyone should follow your standards.
Jason Delfos, Marketing and Advertising Design Group, LLC
We hired San Diego Corporate Law to help us establish our business in San Diego. In the initial stages of setting up our business and transitioning to California, we were frequently out of town. During this time, Michael answered questions promptly and thoroughly by phone and email. He went above and beyond to keep us on deadline for our aggressive schedule. I would not hesitate to recommend San Diego Corporate Law to another business owner.
Alicia Sorber-Gallegos, Two Men and a Truck
Having no prior experience with business law, I approached Michael to help me set up an LLC for my new company and help me review my legal disclaimers. Michael was very straightforward, honest and helpful. He took the time to explain every detail and answer all of my questions. His work was very diligent and completed exactly by the deadline promised. Michael and San Diego Corporate Law hold my highest recommendation!
Anton Ivanov, Dreams Cash True
Michael J. Leonard helped me configure my business entities into a solid investment vehicle. He is very professional, knowledgeable, easy to reach and timely. San Diego Corporate Law produced a unique and informative Private Placement Memorandum (PPM) for my business for less than half the cost other law firms were charging. I expect to use the PPM and San Diego Corporate Law for many years. I recommend Michael because of his efficient, hands on, practical approach to legal work in a time of dramatic changes with securities laws (JOBS Act).
John Copyak, Clean USA Power, Inc.
San Diego Corporate Law helped me set up MGIV Inc and get established as an S-corp in 2013. I was a one man show and didn’t have a substantial amount of money to spend to get started. I was in the process of filing for a LLC through Legalzoom.com when something didn’t feel right. I picked up the phone and asked Michael if he was available to help. This was my first business so I knew nothing about filing for a corporation or legally establishing a business. Using his knowledge and expertise he coached me toward filing for an S-corp instead of an LLC. It saved the corporation $800 in 2013 and positioned it for success based on the MGIV Communication Consulting model. I find comfort knowing that my business is in good hands. Michael is a great resource and very personable so working with him is convenient and affordable! I recommend San Diego Corporate Law to anyone needing legal assistance with their business!
Michael Gordon IV, MGIV, Inc.
When I needed to move my business from an office suite to a brick and mortar location, San Diego Corporate Law was instrumental in ensuring that the lease provisions were in my best interests. The specialized skills that Michael and his team possess, the fair and transparent fee structure, and their professional yet low pressure consultation process are the reasons why I will retain their services in the future.
Scott Weathers, Alpha Graphics La Jolla
Michael J. Leonard at San Diego Corporate Law not only helped us establish our small business in San Diego, but he helped us to solidify our partnership to avoid any gray areas as we are a family-run business. Michael was easy to work with, knowledgeable, responsive, and professional, and we will continue to use him as our company lawyer moving forward.
Karen Posner, Camp Run-A-Mutt Sorrento Valley
I have nothing but compliments to say about San Diego Corporate Law. Michael and his team have always delivered not only an extremely high level of service, but also have been so patient through the whole process of setting up our LLC. Whenever I have questions or need their service, they are very easy to communicate with and very reasonably priced. I will not only use them for any legal advice that I may need in the future, but also refer all the people that may also need their services.
Andrey Kamogari, Kamo Housing
Michael assisted us with the process of incorporating our non-profit organization. Michael was responsive to all of our questions, and sensitive to the expedited timelines that we encountered. Among the best aspects we experienced in working with Michael was his appreciation for our specific goals and his candid and honest guidance to accomplish those objectives. I would highly recommend Michael Leonard and San Diego Corporate Law.
Esther Hemmen, Mending Matters
San Diego Corporate Law has been a crucial partner for Little Black Diamond. Whether it’s routine incorporation paperwork or complex employment law, Michael is always very responsive and available to help handle our legal issues. He takes the time to understand your business and the unique issues that surround it in order to provide accurate and timely advice that considers the best interest of your business. San Diego Corporate Law is a true partner for any business.
Adam Rosenberg, Little Black Diamond, LLC
California S-Corporation (S-Corp) San Diego Details
Under certain circumstances, shareholders of a California corporation may elect for taxation under Subchapter S of the Internal Revenue Code. Under this S-Corp election, corporate profits and losses are reported on the personal income tax filings of the shareholders. Corporations electing taxation under Subchapter S are generally referred to as S-Corporations or S-Corps.
A California S-Corporation must have only one class of stock, may have no more than 100 shareholders, all of whom must be United States citizens or legal United States residents, or certain trusts or estates, all of whom elect to report the profits and losses of the California S-Corp on the individual tax returns of the shareholders. Internal Revenue Code Subchapter S.
When a qualified trust is a shareholder of a California S-Corporation, each beneficiary of the trust is considered a separate California S-Corp shareholder. United States Treasury Regulation § 1.1361-1(e)(1).
Shareholders in a California S-Corporation with family relationships, whether owning shares directly or as qualified trust beneficiaries, may be treated as a single California S-Corp shareholder. United States Treasury Regulation § 1.1361-1(e)(3).
A California S-Corporation is formed by filing articles of incorporation with the Secretary of State. California Corporations Code C § 200(c). The filing fee for articles of incorporation is currently $100.00. California Government Code § 12186(c). Bylaws, which dictate how the California S-Corp will operate, must be adopted.
Shareholders (owners of a California S-Corp) may enter into an optional, separate agreement restricting the sale or transfer of the California S-Corporation stock, a formula for determining the value of shares upon transfer, voting provisions, and other clauses and restrictions.
In addition to the standard formation procedure of a California corporation, shareholders seeking to be treated as a California S-Corporation must file Internal Revenue Code Form 2553 with the Internal Revenue Service, commonly referred to as making the S-Corp election.
A shareholder of a California S-Corporation is not liable for the debts and obligations of the California S-Corp, unless: (1) the shareholder personally guarantees a debt or obligation; (2) the shareholder engages in tortious conduct; (3) the shareholder receives improper distributions of the California S-Corporation assets; (4) the shareholder intermingles personal and California S-Corp matters (alter ego; piercing the corporate veil); or (5) the shareholder breaches a duty owed to other shareholders.
A shareholder in a California S-Corporation who acts as a corporate director and/or officer of the California S-Corp may have increased liability stemming from his or her actions as a director and/or officer.
The names of shareholders in a California S-Corporation are not public record. However, other shareholders of a California S Corporation have the right to inspect the books and records of the California S-Corp, thereby learning the names of fellow shareholders.
The names officers and directors of a California S-Corp are a matter of public record.
Unless otherwise named in the articles of incorporation, the incorporator or incorporators of a California S-Corporation appoint the initial directors of the California S-Corp. California Corporations Code § 210. After shares of stock in the California S-Corporation have been issued, the shareholders vote annually to elect a board of directors, and the elected directors then elect officers to handle the day-to-day operational management of the California S-Corp. A California S-Corporation must have a president, a corporate secretary, and a treasurer/chief financial officer. Other officers, such as one or more vice-presidents, may also be elected by the shareholders of a California S-Corp in addition to the three required officer positions.
Shareholders exercise no management in a California S-Corporation. When shareholders do exercise control of management, the California S-Corp risks losing its limited liability protection.
A California S-Corporation may issue only one class of stock. Shareholders contribute assets to the California S-Corp in exchange for shares of stock. If the assets contributed are non-cash, the fair market value of the assets establishes the price of the stock.
Shares of stock in a California S-Corp are usually characterized as securities, as are the shares of stock of California corporations other than a California S-Corporation.
Federal Securities Issues
Federal securities laws should be considered when issuing stock in a California S-Corporation.
California Securities Issues
All offers and sales of shares of stock in a California S-Corporation require qualification with the Commissioner of Corporations unless either the transaction or the security itself is exempted from qualification. California Corporations Code §§ 25000-25707; 10 California Code of Regulations §§ 250.9-260.617.
Other State Securities Issues
A California S-Corporation issuing shares of stock outside California should consider the securities laws of other states (“blue sky” laws) in which the California S-Corp stock may be offered or sold.
Net income, loss and tax credits of a California S-Corporation are not taxed at the corporate level and are instead “passed through” to the California S-Corp shareholders.
If not restricted by shareholder agreements or securities law requirements, a California S-Corp shareholder can readily transfer the stock of a California S-Corporation to a new owner.
Change of ownership does not dissolve or terminate a California S-Corporation.
A California S-Corporation can be dissolved by a vote of 50% or more of the voting power of the California S-Corp’s shareholders and the subsequent filing of a certificate of election with the Secretary of State. California Corporations Code §§ 204(a)(4), 1900(a), 1901.
Filings required by applicable federal and blue sky securities laws available for additional fees and with additional costs.
California S-Corp Questions?
Send us an Email or call us at 858.483.9200