Steps to Take When Forming an Entity

How long does it take to form a corporation or LLC, in California? What about other states?

California varies – sometimes it’s a matter of days, but sometimes, especially at the beginning of the year, it can take a couple weeks. You can always submit your documents on a rush (24 hours or even same day) basis. Other states? It really depends. Delaware’s quick.

July 12th, 2015|0 Comments

Does the Corporate Transparency Act require me to file a report on the ownership of my corporation or LLC?

Yes. WHAT IS IT? The Corporate Transparency Act (CTA) became effective on January 1, 2024. For the first time, the United States now will require certain legal entities to report to the federal government identifying information about the individuals who directly or indirectly own or control a company within the scope of the new legislation. [...]

November 6th, 2023|0 Comments

What does it mean to “file” a corporation?

Actually, nothing. To bring a corporation into existence, you submit your Articles of Incorporation with the government agency responsible for processing that paperwork in your state. By submitting the Articles, or “Charter Documents”, and the act by the agency of approving same, you have formed a corporation. You can say “file”, if you want.

July 12th, 2015|0 Comments

Is there a lot of paperwork? Do I have to do it all?

There’s some paperwork . . . corporations tend to have more paperwork, which is why some people might immediately gravitate to LLCs, or nothing at all. And, yes, if you want to maintain your status as a corporation, and maintain your limited liability, don’t cut corners on the paperwork. It’s important.

July 12th, 2015|0 Comments

I just put my business into a corporation/LLC. Do I have to file paperwork for that?

If you have an existing business, then its assets and contracts should get transferred to your corporation. This can look like an assignment, or a bill of sale. There are tax considerations regarding contribution of the assets of your existing business. You may also need to notify third parties, such as vendors and landlords. A stitch in time, as they say. Paperwork is king.

June 15th, 2015|0 Comments

Will there be a background check for me to incorporate?

No. You may get background checked as a vendor, even if you put your business in a corporation. But incorporating does not require any background checking.

July 12th, 2015|0 Comments

What is a fictitious business name (or DBA)?

Also known as a DBA (doing business as), if your entity is using a name for its business that’s different from its entity name, then you are using a fictitious business name, and state law requires that you file a fictitious business name statement in the county you are operating out of that records the name of your business and the name of the entity using that name. It’s also a good idea to do file that even if you don’t want to, because it’s helpful evidence to prove the use of your name from a certain point in time, which helps you to defend or bring trademark infringement claims.

July 12th, 2015|0 Comments

Can I use my old bank account for my new corporation or LLC?

That would be nice, but this is the beginning of you needing to think about why you formed the corporation to begin with: to make it separate from the sins of the past. So, no, new bank account, with a new tax ID number. Sorry.

June 15th, 2015|0 Comments

What are bylaws?

Whether for a corporation or in any business or political setting, bylaws are the rules that govern the procedures of the particular entity. In a corporation, the bylaws is the set of rules which address, for example, when meetings will be held, and what the duties of the officers are. Though it’s a standard document for a corporation, some LLCs will also choose to have bylaws separate from their operating agreement. Some bylaws are considered “off the shelf”, but your business, like any other, is unique, and therefore it’s a document that should be reviewed and drafted carefully to suit your particular needs.

July 12th, 2015|0 Comments

What is an Operating Agreement?

Novices to LLCs tend to think that this is the document governing the actual operations of the company. Not so. The operating agreement, also sometimes known as the LLC Agreement (or some variation), is the governing document for the LLC itself. It may be very short, defining merely who the members are and what their respective ownership percentages are. Added to that, there may be restrictions on the transfer of the ownership interest, as well as guidelines for meetings, consent rights, call rights, and so on. These are contracts that can become quite complex.

August 10th, 2015|0 Comments