There are many business structures available, but a limited liability company (LLC) offers an excellent combination of the perks that are offered by proprietorship’s and corporations. However, there are some business types that are not allowed to become an LLC, such as those that provide insurance or banking services. Additionally, California law prohibits licensed health care workers, architects, and accountants from becoming an LLC. If you are uncertain whether or not your company is eligible for LLC status, you can consult with a business formation lawyer.
Key Benefits of an LLC
Forming an LLC in California is a much faster and easier process than forming a civil law corporation. Additionally, you will have much flexibility regarding the number and type of owners that can be involved with your business. For example, your LLC could be partially owned by individuals but still have at least one business entity named as an owner as well.
It is important to note that LLCs with a single owner must opt to be taxed as a corporation in order to avoid the sole proprietorship designation. If your LLC has multiple owners and the company name, you will be able to take advantage of the same structure for receiving profits and losses that corporate shareholders enjoy.
In most cases, each owner involved with an LLC will be legally protected from facing personal responsibility for the company’s debts, which is one of the primary reasons eligible business owners opt to utilize the LLC categorization for their firm. Choosing to make your business an LLC will also remove the burden of holding annual meetings and offering stock options. A corporation is required to fulfill both of these obligations to maintain its ownership with a liability shield, but you can avoid these additional steps with an LLC.
It is common for LLC owners to have shared management oversight. It is possible for everyone to have an equal say in any future operational changes. However, you can designate a single manager or management team to oversee day to day activities if this is preferable in your particular situation.
As you can see, an LLC gives many business owners more flexibility and personal protection. Due to this, LLCs are increasingly popular in California, but it is necessary to ensure that you follow all of the proper legal guidelines. Fortunately, a business attorney can help simplify this process.
At this point, you might be asking yourself an important question: What exactly is a business lawyer? These skilled lawyers specialize in every aspect of business law, including the formation of LLCs. They can represent their clients in court if any disputes are filed, but they typically spend most of their time helping owners launch and manage their companies.
You can expect a business attorney to explain all of the responsibilities and rights that are associated with an LLC. They can assist you with other company-related issues such as navigating through city compliance codes and obtaining business capital. Taking the time to work with one of these lawyers is a good idea, especially if none of your company’s owners have a background in business law.
You can expect a business attorney to explain all of the responsibilities and rights that are associated with an LLC. They can assist you with other company-related issues such as navigating through city compliance codes and obtaining business capital. Taking the time to work with one of these business formation lawyers is a good idea, especially if none of your company’s owners have a background in business law.
Here is a link to the California Franchise Tax Board’s website which provides additional information on the advantages of forming an LLC: