Davis Toft and its attorneys have formed hundreds of business entities—corporations, limited liability companies, partnerships, and others. We can help you walk through the various benefits and burdens of each and customize the selection to meet your needs. We help with all of the initial documents and filings and work with clients to create a clear vision of the best legal vehicle for your business with an eye toward avoiding future misunderstandings.
The process of forming a California business begins with completing the necessary documentation. These documents can then be filed with the California Secretary of State. If you are working with a business formation attorney, the attorney will assist you with the completion of this essential paperwork and help you avoid common errors that can slow down the process of creating your business. A lawyer will also ensure that all the correct documents are completed in a timely manner.
Another critical business formation responsibility involves submitting any fees required alongside the initial documents. Documents may require other actions by you or your business formation attorney after the initial filing, as well as statutory filing provisions. It is important to note that filing documents and their associated requirements differ depending on the type of business in question. In California, you can form:
In the state of California, a corporation is a legal entity that exists separately from the parties that own it. Forming a corporation allows owners to limit their own personal liability should legal issues arise. There are different types of corporations, including for-profit and non-profit corporations.
If you intend to form a corporation in the state of California, you will first need to file Articles of Incorporation with the California Secretary of State. These are available for download from the California Secretary of State’s website, but you must be careful to ensure that you select the correct form and fill it out correctly. Alternatively, the business owner can opt instead to create a statutorily compliant document with the assistance of a California business formation & transactions attorney.
While an LLC offers similar liability protection to a corporation, there are significant differences regarding how the entities are taxed. It is possible for a domestic LLC to be operated by one or more individuals, whether they are managers or members of the organization.
To establish an LLC in California, you will need to submit the necessary paperwork to the California Secretary of State. It is also customary to draft an operating agreement that addresses the LLC’s intended affairs and outlines the business’s intended conduct. This agreement must be signed by all members of the LLC. It is important to note that you should not file the operating agreement with the Secretary of State, as you would the remainder of the documentation. Instead, ensure that it is maintained at the same office where the LLC keeps its records.
As its name would imply, select individuals involved in a limited partnership are afforded limited liability. There must be a single limited partner whose level of liability is dependent upon how much participation or control they are contributing to the LP. In addition, a minimum of one general partner will be tasked with acting as the controlling partner of the LP. Those acting as general partners are provided unlimited liability with regard to the LP’s obligations and debts.
In order for a GP to be formed, the business entity must be backed by at least two individuals. The business entity formed must also operate on a for-profit basis. In most cases, any partners involved in running the GP will be considered jointly and severally liable for any of the partnership’s obligations. However, exceptions can be made to this rule if they are agreed upon by the claimant.
Any profit the GP generates will be taxed as personal income on behalf of the business entity’s partners.
An LLP participates in either public accounting, law, architecture, engineering, or land surveying. It is also possible for an LLP to be created for an organization providing facilities or services to another LLP registered in the state of California. This second LLP must practice either public accounting or law. California requires that all LLPs maintain a particular level of insurance coverage, as dictated by state law.
If you have already filed the necessary paperwork with the California Secretary of State, you are ready to obtain the permits and licenses you will need to begin operations.
Keep in mind that the California Secretary of State is not responsible for providing business owners with permits or licensing. Instead, you will need to identify the specific agency or agencies that issue the business permit or license you seek. Additionally, ensure you are satisfying all necessary registration requirements for each permit or license at all levels of government.
A business’s organizational structure impacts how it operates on a day-to-day basis. However, once your business has been formed and its structure has been established, the next critical task involves handling issues related to sales and transactions. The manner in which these transactions occur is heavily dependent upon the structure you have established.
Before engaging in any transactions as a business owner, it is crucial to review your business’s structure and operations with a skilled California business formation and transactions lawyer. This is the best strategy to ensure that your business’s operations will proceed smoothly and avoid unnecessary complications.
To form your business without running into avoidable complications, it is critical to work with a skilled attorney. Davis Toft has built extensive experience helping prospective entrepreneurs form their businesses. We will guide you through the business formation process, ensuring that documentation is completed correctly and efficiently, meeting all statutory requirements. Additionally, Davis Toft is proud to provide high-quality business transaction services.
If you intend to form a business in California, contact Davis Toft Law as soon as possible to schedule a consultation or gather more information. You can contact our office via email or phone.