California LOEN Penalties for California Limited Liability Companies Understanding the penalties associated with late and unfiled California Limited Offering Exemption Notices (LOENs) for California Limited Liability Companies (California LLCs) is essential to avoid unnecessary startup costs and more severe penalties from the California Department of Financial Protection and Innovation and its [...]
Initial Capitalization of California LLCs When forming a California Limited Liability Company (California LLC), one of the critical steps involves deciding on the initial capitalization. Adequate capitalization is essential to ensure that the California LLC operates with sufficient resources while meeting the legal, financial, and operational requirements, and is discussed in [...]
Adequate Capitalization of California LLCs A California Limited Liability Company (California LLC) is a corporate entity structured to allow business owners to operate in corporate form as a separate legal entity with a separate legal identity. Understanding adequate capitalization helps business owners plan both how they initially fund their California LLCs [...]
What is a 25102(f) Filing for a California LLC? Some frequently asked questions the experienced attorneys at San Diego Corporate Law are asked revolve around 25102(f) filings for California LLCs.A Limited Offering Exemption Notice, often referred to as a 25102(f) filing after California Corporations Code Section 25102(f) which provides for the [...]
How Long Does It Take to Form a California LLC? One of the questions the experienced corporate attorneys at San Diego Corporate Law are often asked is how long takes to form a California LLC. The answer is a bit complicated because the timeline for forming a California LLC can vary [...]
LLC for Rental Property with a Mortgage in California Owning rental property business in California comes with unique financial opportunities in the form of rental income and tax, but also comes with legal and tax implications and personal liability for real estate investors. The personal liability aspect in particular requires careful [...]
How Many Rental Properties Should I Put in an LLC in California? A question the experienced corporate attorneys at San Diego Corporate Law are frequently asked is how many rental properties should be owned by one California LLC, and when is it best to use more than one California [...]
What Tax Benefits Does a California LLC taxed as an S-Corp Provide? In California, establishing a California LLC (limited liability company) taxed as an S-Corp is a popular business structure for business owners (referred to as “members” of a California LLC) in California. The goal of this article is [...]
Four Reasons Not to Convert a Foreign LLC to a California LLC Sometimes it becomes necessary or advisable for a business owner to cease operating as a Foreign LLC and commence operating as a California LLC. The decision to transfer operations from a Foreign Limited Liability Company to a [...]
Can I Use a PLLC in California? In the world of business formation, the term PLLC, or Professional Limited Liability Company, refers to a special legal business entity that is designed for licensed professions for rendering professional services. However, navigating the specifics of using a PLLC can be a [...]
What is the Difference Between a Limited Partnership and an LLC in California? When launching a business in California, choosing the right entity type is crucial. Two popular choices are the California Limited Partnership and the California Limited Liability Company (California LLC). While both offer certain advantages such as [...]
Who Owns a California Corporation? A California Corporation is a popular business structure among entrepreneurs and small business owners in California due to its tax benefits and liability protections. But exactly who owns a California Corporation? This article seeks to shed light on this question by exploring the roles [...]
Who Owns a California S-Corp? A California S-Corp is a popular business structure among entrepreneurs and small business owners in California due to its unique tax benefits and liability protections. But exactly who owns a California S-Corp? This article seeks to shed light on this question by exploring the [...]
Who Owns a Limited Partnership in California? Understanding the business structure of California Limited Partnership ownership can be complex. Navigating through the laws and regulations of a business entity is essential to ensure that the business operates within the bounds of the law. In this article, we will explore [...]
Is it Better to be a Corporation or LLC in California? In the realm of business formation, aspiring entrepreneurs often grapple with the choice between forming a California Limited Liability Company (California LLC) or a California Corporation. This decision is particularly crucial in the State of California, where the [...]
Is it Better to be an S-Corp or LLC in California? In the realm of business formation, aspiring entrepreneurs often grapple with the choice between forming a California Limited Liability Company (California LLC) or a California S-Corp (California S-Corp). This decision is particularly crucial in the State of California, [...]
How to Choose a California LLC Attorney Starting a California Limited Liability Company (LLC) requires careful navigation through the intricate labyrinth of legal procedures specific to the legal entity. An experienced LLC attorney and law firm in California can serve as a compass, guiding informed decisions to avoid common [...]
California LLC Operating Agreement A California LLC is a popular business structure in California due to its flexibility, offering the benefits of both a partnership and a corporation. A critical component of establishing an LLC in California is creating an Operating Agreement. This legally binding document outlines the operational [...]
What Specific Information Does a Company Need to Report for FinCEN Beneficial Ownership Information Reporting? As part of anti-money laundering and counterterrorism financing measures, commencing on January 1, 2024, the Financial Crimes Enforcement Network (FinCEN) requires most businesses to provide certain beneficial ownership information. But what specific data does [...]
What is Beneficial Ownership Information Reporting? Unless otherwise exempted, most companies in the United States, including California Corporations, California S-Corps, California Professional Corporations, California LLCs, California LLPs, California Limited Partnerships, and even some California General Partnerships and California Joint Ventures will be required to commence reporting about their Beneficial [...]
What are the Disadvantages of Being a Joint Venture in California Operating as a Joint Venture in California can seem appealing due to its simplicity, low cost to get started, and minimal regulatory requirements. However, the advantages of a California Joint Venture business structure are not without certain drawbacks. [...]
General Partnership vs LLC in California In California, business partners have multiple options when forming a business, with a California General Partnership and a California Limited Liability Company (LLC) being among the most popular. Each of these structures comes with its own set of advantages and disadvantages, and this [...]
Sole Proprietorship vs LLC in California Choosing the right business structure for a business in California can feel like an overload of complex legal language and intricate financial terminology. The decision between operating as a California LLC or Sole Proprietorship affects many aspects of a business, from the extent [...]
Converting LLC to S-Corp in California In this article, we examine some of the reasons that might motivate a conversion from a California Limited Liability Company (LLC) to a California S-Corp, as this is a significant decision that can have profound implications on the taxation, liability, and overall structure [...]
How to Close LLC in California Closing a California limited liability company involves following certain steps to ensure that the process is completed properly and in accordance with applicable law to cease operations, terminate its legal existence, and stop transacting business as a business entity. Dissolving an LLC in [...]
Can LLC Own S-Corp in California? No, an LLC cannot own an S-Corp in California (or any other state, for that matter!). However, is there a business entity or other business structure small business owners may use to mimic the flexibility and tax savings that would result if limited [...]
Can S-Corp Own LLC in California? Yes, a California S-Corp can own a California LLC. The business structure using these two business entities is not only possible but is often advantageous for many businesses. In the complex world of business structure, it is important to understand the various ownership [...]
LLC vs S-Corp in California When establishing a business in California, the business structure decision between forming a Limited Liability Company (LLC) or an S Corporation (S-Corp) can have significant implications for your operations, taxation, and overall success. Both entity types offer distinct advantages and limitations. This article will [...]
Real Estate Development Company in California Whether you are a new real estate developer or a seasoned property developer with years of experience in the real estate market, it is important to choose the correct business entity for your real estate projects. When embarking on a real estate development [...]
How to Start a California LLC Are you considering starting your own business in California? If so, forming a Limited Liability Company (LLC) can provide you with numerous advantages, including liability protection, flexible taxation, and enhanced credibility. In this comprehensive guide, we will walk you through the entire process [...]
Is S-Corp an LLC? The short answer is, it depends upon what you mean by S-Corp. Sometimes the term "S-Corp" is used to refer to a tax designation provided by the Internal Revenue Service, but sometimes the term "S-Corp" is used to refer to a specific type of entity. [...]
Using an LLC for Rental Property in California When it comes to real estate investment in California, a common question that comes to mind is whether to use a California Limited Liability Company (LLC) for investment property. In this article, we delve into the intricacies of using a California [...]
LLC Name Change When running a California Limited Liability Company, also known as an LLC, there may come a time when you need to change the name. In California, the process is straightforward, but missing small details can be detrimental and the process can be time consuming. This article [...]
Can You Start an LLC or S-Corp in Another State? Yes, it is indeed possible for a resident of California to establish an LLC or S-Corp in another state. However, there are certain considerations and potential complications that must be understood to make an informed decision. This article will [...]
Evaluating California Entity Choices When it comes to launching a new business in California, choosing the right legal entity is a critical decision. Each entity - be it a Sole Proprietorship, General Partnership, Corporation, S-Corp, Limited Liability Company (LLC), or Limited Partnership - carries its own set of advantages [...]
How to Get an LLC in California How to Get an LLC in California Overview Get an LLC in California the Easy Way The easiest and most effective way to form an LLC in California is to engage the services of corporate attorneys. Specifically, the expert team at San [...]
California LLC Fee California LLC Overview A California limited liability company (LLC) is a specific form of a private limited company. California LLCs are more flexible and require less record-keeping and reporting than other choices of entities, such as corporations, S-Corps, and limited partnerships. However, the California LLC Fee [...]
Key Differences Between General Partnerships, Corporations, and Limited Liability Companies When you start your own San Diego small business, you have several types of corporate entities through which to operate. In this article, we discuss the key differences between three commonly used entities: general partnerships, standard corporations, and limited [...]
The Operating Agreement is one of the "essential" business records that must be maintained by your LLC. Aside from the fact that an Operating Agreement is required, it is essential for a single-member LLC to have an Operating Agreement and to abide by the Agreement strictly. Indeed, it is often more important for a single-member LLC to have an Operating Agreement than for a multi-member LLC.
Many startup entrepreneurs begin their businesses as a sole proprietorship. That is the easiest and quickest way to begin working as "your own boss." Without question, being a sole proprietor is effective -- for at least a short while. After a time and after your business is succeeding and making money, however, this is often time to incorporate your business.
It is possible for LLCs to provide a form of option ownership plan to employees if the LLC is treated as a corporation for tax purposes, issues ownership in form of units with equal voting and liquidation rights, the units in the plan have the highest voting and dividend rights provided by that LLC, the LLC issues dividends and allocates profits and loss pro rata. However, most LLCs are taxed as partnerships and many do not conform to the other requirements listed here.
So, you are finally ready to launch your new San Diego startup business. Congratulations! Starting your own business is exciting and nerve-racking at the same time. Here are a few of the most important legal considerations for any business when they are first starting out:
The main reason for using a corporate entity -- like a corporation or a limited liability company or a California professional corporation -- is to obtain the shield provided by the corporation that protects your personal and family financial assets. If the corporate entity undertakes a business obligation, then the business creditors can only seize business assets if there is a judgment; your personal and family assets are protected.
When corporate partnerships are formed, the main disadvantage of partnership dissipates since the partners are legal entities that are already protecting the personal and family financial assets of the natural persons involved. For these reasons, a limited partnership might be the best business form for your next San Diego venture.
Forming a California limited liability company ("LLC") is similar to forming a California corporation. There are some important differences, however, and an experienced San Diego corporate attorney can provide advice and counsel if you are in the process of setting up a corporate entity for your business.
Thoughts on Being Your Own Agent for Service of Process Here in San Diego and elsewhere in California, corporations, limited liability companies, and limited partnerships are required by law to designate an "agent for service of process." This is part of the process of setting up your corporate entity [...]
No Breach of Duty of Loyalty to LLC Where LLC Conducted No Business Under California law, a limited liability company ("LLC") is one of the options available for forming a corporate entity through which to operate a business. Other options include a corporation, various professional organizations, and limited partnerships. [...]
Inspection Rights for Members of San Diego Limited Liability Companies One of the long-standing hallmarks of corporate governance in California and in the US generally is the idea that shareholders and other owners of corporate entities are entitled to inspect the "books and records." This has been enshrined in [...]
What Happens if I do Not Pay My California Franchise Taxes? California corporations, limited liability companies, S-corps, and other types of business entities must pay annual taxes, called "franchise taxes" to the California Franchise Tax Board. The minimum amount owed is $800 each year, but this is just a [...]
Business Identity Theft: As Destructive as Personal Identity Theft Once a corporation, s-corp, limited liability company, or other corporate entity has been formed, a new legal entity comes into existence. This new entity has an identity that is separate and apart from the identity of the owners. That business [...]
A Guide for the Annual Maintenance of Your San Diego Corporation or LLC After your San Diego corporation, s-corp, or limited liability company is formed, it is necessary and essential to ensure that your corporate entity receives the necessary annual maintenance. Regular maintenance is needed for any major investment; [...]
Employee Equity as Compensation: Corporations are Better Than LLCs In this article, we discuss another difference between corporations and limited liability companies ("LLCs"). Both are corporate entities and serve similar functions (such as providing a shield against personal liability for the owners). However, providing ownership equity as compensation is [...]
Alternative Methods of LLC-to-Corporation Conversion When San Diego founders start a business, there are often very good reasons to use a limited liability company ("LLC") as the startup vehicle. There are some tax advantages, there is the ease of corporate upkeep and maintenance, flexibility with respect to division of [...]
Top Strategies for Narrowing Scope of a Personal Guaranty in California One of most important reasons for running your San Diego business as a corporation, limited liability company, or other corporate entity is to avoid personal liability for business debts and judgments. The corporate entity provides a shield that [...]
Taxation and Legal Issues Concerning Founders' Shares Founders' shares are shares or ownership units of a company that are initially provided to a startup corporation or LLC. A person is considered a "founder" if he or she is one of the individuals who originally forms the company. These individuals [...]
Can My Investors Take Over My Small Business? Many San Diego small businesses seek out investors to help start the business, but there is often some confusion about what role the investor plays and what rights the investor has. One common concern for small business owners is whether an [...]
Time to Incorporate and Start Your San Diego Businesses By all reports, the economy is doing well and small business confidence and optimism is at an all-time high. For the last 45 years, the National Federation of Independent Business has been charting an "optimism index" for small businesses and [...]
Buy-Back Agreements: Removing a San Diego Shareholder for Cause or No-Cause With small, closely-held San Diego corporations and limited liability companies, it is important that the shareholders, members, and owners get along at a basic level. Maybe not best of friends, but the ability to work together for the [...]
Does Your Family-Run LLC Need an Operating Agreement? In brief, "Yes." Even a family-run limited liability company ("LLC") needs a well-drafted and solid operating agreement. One of the most common mistakes made by family-run businesses is assuming that normal business practices are "not necessary because we are family." The [...]
Nine Changes in Your Business That Necessitate Hiring a Good San Diego Corporate Lawyer One can conceive of a business as a living, growing organism that migrates through various changes and evolutions. We here at San Diego Corporate Law have discovered that there are natural growth points and retraction [...]
California Business Forms and Structures: An Overview If you are just starting your new San Diego business, California law provides you with many choices as to the form and corporate structure of your business. There are advantages and disadvantages for each form/structure, and a good corporate attorney can help [...]
Incorporation Assistance: Reasons to Hire an Experienced Corporate Lawyer to Help We here at San Diego Corporate Law emphasize the need to form a corporate entity such as a corporation or a limited liability company to run your business. There are many reasons why this is important. It is [...]
Checklist for California Corporation Articles of Incorporation Finding a good and experienced corporate attorney to assist you in forming your corporation the right way is important. At San Diego Corporate Law, we believe in doing things right the first time. While each business is unique, there are some items [...]
California Makes 2018 List of Top 10 States for Launching Startups The website wallethub.com just published its list of the top 10 states for launching a startup. California makes the list coming in at number eight, and Texas was number one. See here. California would have ranked higher, but [...]
San Diego Joint Ventures: Limiting Risk and Capital Exposure With many types of business efforts and potential market exploitations, joint ventures offer many advantages such as: Cost sharing, which can be particularly useful if none of the joint venturers can independently fund the enterprise Sharing of divergent talents, skills, [...]
Differences Between California Corporations and LLCs: Alter Ego Doctrine California law has a number of alternative corporate forms for businesses to use with respect to running their businesses. Each form -- such as a corporation vs. a limited liability company -- has advantages and disadvantages compared to the alternatives. [...]
Director/Manager Personal Liability for Health and Safety Violations In general, forming a corporation or a limited liability company will shield the officers and directors of the company from personal liability for corporate debt and obligations, including obligations that are violations of laws. However, there are some circumstances in which [...]
Do San Diego Home-Based Businesses Need to Use a Corporate Entity? Many people work from home and own home-based businesses. Back in 2013, Forbes Magazine stated that more than half of Americans work for small business and over 50% of those are home-based. See here. Since 2013, even more [...]
Buy-Sell Agreements Should be Reviewed Annually If you are running a San Diego partnership, limited partnership, closely-held corporation or an LLC, it is important that you have a well-crafted buy-sell agreement. If you do not have one, it is time to have one written. A good San Diego corporate [...]
The Duty of Care for a Corporation Versus a Limited Liability Company There are many reasons why you might want to form a San Diego limited liability company instead of forming a San Diego corporation. Among those include: LLCs require fewer corporate formalities like annual shareholder meetings, etc. LLCs [...]
How Does the Secretary of State Determine Business Name Availability? As many know, when you form a corporation here in San Diego or anywhere in California, you must specify the name of the corporation (or LLC or Limited Partnership). According to Cal. Corp. Code, § 201(b), a business name [...]
