The formation of a business involves many factors. We have experience helping individuals to set up their new business. We can prepare the Business License, Tax ID Numbers, Buy/Sell Agreement, Copyright, Fictitious Business Name, Employment Agreement, Incorporation, Incorporation Kit, Limited Liability Company (LLC), Corporation/LLC Dissolution, Corporation Minutes, Corporation Name Change, Independent Contractor Agreement, Mechanics Lien, Non-Competition Agreement, Non-Disclosure Agreement, Partnership Agreement, Partnership Dissolution, General Agreement, Small Claims, Trademark Registration, among other forms depending on what type of business it is, but before we can do that the entrepreneur needs to determine which business entity best fits their needs.
There are many types of business entities:
1. Sole Proprietorship - An individual owns and operates a business. A sole proprietor has total control, receives all profits from and is responsible for taxes and liabilities of the business.
2. Partnership is where two or more persons are engaged in a business for profit. Except as otherwise provided by law, all partners are liable jointly and severally for all obligations of the partnership unless agreed by the claimant.
3. Limited Partnership may provide limited liability for some partners. There must be at least one general partner that acts as the controlling partner and one limited partner whose liability is normally limited to the amount of control or participation of the limited partner. General partners of an LP have unlimited personal liability for the LP’s debts and obligation.
4. Limited Liability Partnership is a partnership that engages in the practice of public accountancy, the practice of law, the practice of architecture, the practice of engineering or the practice of land surveying, or provides services or facilities to a California registered LLP that practices public accountancy or law, or to a foreign LLP. An LLP is required to maintain certain levels of insurance as required by law.
5. Limited Liability Company generally offers liability protection similar to that of a corporation but is taxed differently. Domestic LLCs may be managed by one or more managers or one or more members. In addition to filing the applicable documents with the Secretary of State, an operating agreement among the members as to the affairs of the LLC and the conduct of its business is required.
6. Corporation is a legal entity which exists separately from its owners. While normally limiting the owners from personal liability, taxes are levied on the corporation as well as on the shareholders. The sale of stocks or bonds can generate additional capital and the longevity of the corporation can continue past the death of the owners.
7. Non-Profit Corporation - California nonprofit, nonstock corporations organized for religious, charitable, social, educational, recreational or similar purposes are formed pursuant to the Nonprofit Corporation Law, commencing with California Corporations Code section 5000.
A. A corporation organized to operate a church or to be otherwise structured for primarily or exclusively religious purposes is a nonprofit Religious corporation.
B. A corporation organized primarily or exclusively for charitable purposes and which plans to obtain state tax exempt status under California Revenue and Taxation Code section 23701(d) and/or federal tax exempt status under Internal Revenue Code section 501(c)(3) or organized to act as a civic league or a social welfare organization and which plans to obtain state tax exempt status under California Revenue and Taxation Code section 23701(f) and/or federal tax exempt status under Internal Revenue Code section 501(c)(4) is a nonprofit Public Benefit corporation.
C. A corporation organized for other than religious, charitable, civic league or social welfare purposes and planning to obtain tax exempt status under provisions other than California Revenue and Taxation Code sections 23701(d) and 23701(f), Internal Revenue Code section 501(c)(4), or not planning to be tax exempt at all, is a nonprofit Mutual Benefit corporation.
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LDA-48 Sonoma County Exp 04/12/2020
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