FAQs

Do I need a corporation or LLC for my business?

Congratulations! You just asked the best question (which is why it's also at the top of the FAQs). You know (or at least should know) your business best, and so that also means you know what liabilities you may face. Make a list. Call up your insurance broker (you have one, right?) and talk through what’s covered and then what isn’t. Are there things out of your control, such as employees? Those are some things to consider. You can read my post on this or watch the video on this topic. It’s very important that you not waste time and money on something you may not need.

June 15th, 2015|0 Comments

What’s a Corporation?

A corporation happens when “charter documents” are filed with the state, usually in a form either prescribed by the state or drafted by an attorney [ahem] and, once filed, creates a corporation. Corporations are a legal entity designed to protect its shareholders and directors from liability.

June 15th, 2015|0 Comments

What’s an LLC?

An LLC, or limited liability company, is a type of entity that protects its owners and mangers from liability, unless they personally do bad things. Like a corporation, an LLC happens when its Articles of Organization are filed with the state authority. In California, this is an online form. Keep in mind, there are other filings, and then ongoing responsibilities of those managers and members to continue shielding them from liability. And if there’s more than one Member, having a written operating agreement is highly advised. There may also be tax advantages to filing as an LLC.

June 15th, 2015|0 Comments

What’s a partnership?

You would think the answer to this is obvious, and sometimes it is. The short answer: A partnership consists of two or more individuals who operate as co-owners of a for-profit business. The partnership exists whether or not the participants intend to form an official partnership (a de facto partnership). The longer explanation: Please contact [...]

April 8th, 2020|0 Comments

Do LLCs still make sense after tax reform in 2017?

Short answer: yes, but now it depends on even more than it used to. And even though I advise in the tax area, determining what entity is best for your enterprise now depends on a wide variety of factors that are specific to your entire economic situation and not just the business.

February 19th, 2020|0 Comments

What’s the difference between an LLC and a corporation?

Call me! Seriously, the differences are numerous; here are a couple to get you started: LLCs have a more flexible tax structure, have fewer housekeeping requirements, but aren’t ideal for larger companies, especially those seeking outside investors. Corporations are, well, just read that last sentence but the opposite.

June 15th, 2015|0 Comments

What’s better . . . an LLC or a Corporation?

Aaah, if life were only that easy. Actually, sometimes it is. One rule of thumb -- is it a small business not providing professional services, with no plans for investors and modest gross receipts? That's a case where you might lean heavily toward an LLC. Investors on the horizon? Corporation. The analysis can get tortured for businesses that are larger or are growing. Real estate tends toward LLCs.

June 15th, 2015|0 Comments

What’s a C Corporation?

A C Corporation is a Corporation that hasn’t elected under the Internal Revenue Code to be taxed as an S Corporation. The best way to describe it is to check out what an S Corporation is. Trust me; it’s not circular.

June 15th, 2015|0 Comments

What’s an S Corporation?

An S Corporation is a corporation that has made an election (i.e., timely filed a form) to be taxed as a “pass-through”, i.e., the corporation itself is generally not taxed, but all of the taxes for profits and income, as well as for losses and expenses, are passed through to become the obligations of the individual shareholders. There are limitations to what corporations can be S Corporations. For example, S Corporations cannot be owned by more than 100 shareholders or by non-resident aliens. The “S” stands for . . . wait for it . . . small.

June 15th, 2015|Comments Off on What’s an S Corporation?

How do I form a Corporation?

Nice. Figuring if you click here you’re home free. In a way, yes. To form one, you file Articles of Incorporation with the governing corporate authority in your state. In California, where my practice is, that’s the Secretary of State. Articles should contain certain provisions that may or may not be obvious to you, and are not contained in most templates offered by the state or online corporate mills. Additionally, formation is the first of several steps to take to ensure that your corporation is protecting you.

June 15th, 2015|0 Comments