Experienced Legal Counsel to Businesses
Deciding to become a business owner, and launch your product of service can be full of both excitement and anxiety. It’s our job to help you understand your options in order to make the best decisions for both the short and long term – and to hopefully alleviate some of the anxiety so you can focus on the excitement!
In California, the most common business forms include sole proprietorships, Domestic Stock Corporations, taxed under subchapter C (C-corporation) or subchapter S (S-corporation), Limited Liability Companies (LLCs), Limited Liability Partnerships (LLPs), General Partnerships or Professional Corporations. In determining what form is best for your business, your advisor must have a true understanding of your goals and objectives – both short and long term – and how the right business form can facilitate your success.
A sole proprietorship offers the most flexibility and greatest freedom of all the business forms. However, some drawbacks of a sole proprietorship are lack of liability protection and difficulty in obtaining financing, either debt or equity to fund your enterprise. All income and expenses attributable to the business is reported on your personal income tax return, utilizing schedule “C.”
A Domestic Stock Corporation offers both liability protection and increased ability to attract and secure both debt and equity financing. Corporate formalities, however, must be observed in order to keep any liability protection, so business owners must clearly understand those formalities. In California, corporations operating within the state are subject to a “minimum” tax of $800 annually, whether or not any revenue is generated by the business.
A Limited Liability Corporation, or LLC, is a common entity to select for business owners who wish to obtain liability protection, but do not wish to maintain the formalities of a corporation and do not need to attract a large number of potential investors. Easy to set up and easy to maintain, LLCs are often the “go-to” entity type for many business owners, and can be set up with a “single” member, or with multiple members. As is true with corporations in California, LLCs operating within the state are also subject to a “minimum” tax of $800 annually, whether or not any revenue is generated by the business.
For Purpose Law Group has a dedicated group of experienced attorneys knowledgeable about the specific requirements to establish and operate these entity types, including partnerships, LLCs and domestic stock corporations. If you are just launching your business, we have reasonable flat-fee packages for all business entity types. On an ongoing basis, we offer Outside General Counsel services, to provide timely legal counsel to business clients in areas of need including employment, taxation and corporate compliance.
We are happy to discuss your business goals and objectives, and to offer suggestions and solutions on how to achieve business success, and we offer a free 20-minute consultation to answer any questions you may have about the best way to structure your business.