Starting a business is an exciting and creative process that involves many important decisions. These decisions include choosing the type of entity that will best facilitate your vision, preparing a comprehensive corporate compliance policy to ensure adherence to laws, regulations and ethical standards, and planning an advantageous exit strategy. We will advise you on each of these aspects to ensure a smooth start, eliminate uncertainty and assure your business’s compliance with various laws that may complicate the smooth running of your business. Let us help you to create a business structure that uniquely accommodates your needs while protecting your investments. We have the knowledge to guide you in making the best decisions for your individual situation.
Our business formation and tax planning legal team can help with:
- Business Entity Formation (B Corporation; C Corporation; S Corporation; LLC; Partnerships; Non-Profits and Foundations)
- Corporation Compliance
- Succession Planning
Business Entity Formation
Whether you are just starting out, or are currently running your own business, we can provide counsel concerning the most tax-favorable type of entity that is suitable for your business. We will meet with you to determine your particular needs and then tailor your business entity to accommodate those needs in a way that ensures the maximum tax benefits and protection from liability.
Sole Proprietors/ DBAs:
If you are a sole proprietor, conduct business in your own name or are operating under a DBA (“doing business as”), we advise you to register your business with the city and county where it is located, obtain a tax identification number (“EIN”), create a separate bank account and maintain detailed records of all business transactions. Depending on the type of business, your exposure to personal liability may be maximum and could pose a high risk of audits by the Internal Revenue Service and the Franchise Tax Board. We are experienced in advising such business owners and can provide counsel concerning the best ways to address these and other issues that you may encounter with the tax authorities and other government entities.
Corporations: C, B, or S Corporation
We are experienced in establishing C, B, and S Corporations by filing the appropriate documents to register your corporation with the California Secretary of State, or any other respective state/s with attractive asset protection laws such as Nevada or Delaware. We will analyze your circumstances, help you select the most suitable business entity type and then incorporate it for you. For more than a decade, we have assisted in the formation of all Corporation types including B, C and S Corporations. This process involves investigating the desired business name to confirm its availability, registering the business with the California Secretary of State’s Office, drafting corporate Bylaws that are unique to your needs and ensuring compliance with the California Corporations Code. We will also ensure compliance with the Internal Revenue Code. If applicable, we will advise you concerning the tax and other benefits of filing an S-Corporation Election Form 2553.
Our years of experience includes formation of B, C, or S-Corporations by registering them with the Secretary of State’s Office, draft Corporate Bylaws that are unique to your needs and ensure compliance with the Corporations Code. We will also ensure compliance with the Internal Revenue Code and complete the S-Corporation Election Form 2553 for S-Corporation Election and any other requirements if you select to incorporate an S-Corporation. If not we can also register any other Corporate entity you select.
Lastly, if you elect, we can assist your business in maintaining compliance with various State and Federal Laws throughout the year. We can also draft, review and analyze your business contracts or other business related documents for transactions with your clients and other third parties to ensure you are properly protected from future liability.
Limited Liability Company (LLC), Series LLC, Partnerships: Limited or General
We are experienced in formulating an Asset Protection strategy to insulate your business assets from personal liability through the use of entities such as Limited Liability Company (LLC), Limited Partnerships (LP), Family Limited Partnerships (FLP), or in combination with other entities.
Limited Liability Company (LLC):
LLCs are created for certain types of businesses as provided in the California Business & Professions Code, and can offer protection from personal liability for business debts. They can also be used to hold income producing properties due to their tax and asset protection benefits. We are well equipped to assist you in deciding whether to create a California or out of state LLC for your business needs by analyzing the different issues that may help determine that decision. One of the most critical factors to consider in deciding between a California or out of state LLC, such as a Nevada or Delaware LLC, are the state’s asset protection laws. Other factors include the type of business, choice of jurisdiction in resolving disputes between members, or between the LLC and third parties.
As experienced tax attorneys, we will help you determine the most favorable tax situation for your LLC, including the option of electing to be taxed as an S-Corporation while maintaining your LLC status. This is a unique hybrid strategy that allows you to get the best of both worlds of being an LLC with the tax benefits of an S-Corporation
Series LLCs are very unique entities that may be used when the primary concern of the business owner is asset protection. It enables you to create multiple series LLCs for each business under the main umbrella LLC entity when all the businesses are related. It provides separate entity treatment for each business under a separate series, and insulates the liability of each series from the other. California law recognizes the validity and legitimacy of the Series LLC created in other states such as Nevada or Delaware, even though they cannot be created in California yet.
The relative newness of Series LLCs means that tax treatment of these entities is still evolving. On the state level, the California Franchise Tax Board treats each series as a separate entity for tax purposes and levies an $800 franchise fee on each series. On the Federal level, the Internal Revenue Service is still in the process of creating regulations on the tax treatment of the Series LLC, though they are moving towards taxing it as a single entity with a single tax return. We advise you to contact us for an extended consultation before deciding whether the Series LLC is suitable for your business.
Partnerships may be limited or general. A general partnership is analogous to a Sole Proprietorship except that it has more than one member. All the members of a general partnership are exposed to maximum liability for the actions of each member whether they participated in the decision or not so long as it was made for the partnership. Additionally, the members’ personal assets may be reached by creditors of the partnership without any restrictions.
Limited Partnership or Limited Liability Partnership is an association of at least two partners, one of whom is a General Partner, while the other is a Limited Partner. The General Partner runs the day to day affairs of the business and is responsible for all liability associated with the partnership. On the other hand, the Limited Partner is not involved in the day to day affairs of the business and is not responsible for the liability of the Partnership because his exposure is limited to his contribution to the partnership.
As experienced tax attorneys, we have helped individuals and businesses to devise tax strategies unique to their family and business needs by the use of this and other entities for tax planning that proactively reduced their annual tax liability.
Business Succession Planning:
We have experience in counseling businesses and helping to devise the most tax efficient means of seamless transfer of your family business assets to your successor/s and maintain control for those chosen successor/s. In doing so we utilize time tested asset transfer vehicles such as Buy-Sell Agreements, Family Limited Partnerships (FLP), Limited Liability Company (LLCs) in isolation, or in combination with other entities.
We also represent businesses in negotiating the sale and purchase of business assets. We have ample experience in creating documents for such transactions, including Stock Transfers and Corporate Restructuring to accomplish or maintain family control of your business.
We pay particular attention to the unique needs of each transaction and formulate a plan most suitable for that need. We will discuss and strategize with the client to bring them to a working understanding of these complex transactions to be sure that you are comfortable. Contact us so we can put our vast experience at your disposal.
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