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02Sep 2020

What are the advantages of operating my business through an S Corporation?

Top three reasons: Tax. Tax. Tax. Which is why they were created to begin with back in the day (1958), to encourage small business creation in the U.S. An S Corporation has a “single layer” of tax, i.e., unlike C Corporations (which is what all corporations formed in the United States are unless they make […]

02Sep 2020

How do I establish a sole proprietorship?

Establishing a sole proprietorship isn’t complicated since there are no filings to establish a sole prop business. Lots of folks just open their doors and do business, and that’s it. There are other tasks that need to be performed, like getting a business license and (sometimes) filing/publishing a fictitious business name statement if you’re going […]

10Aug 2020

When should I use a C Corporation for my business?

It’s complicated. With a (currently) flat tax rate of 21%, many businesses are considering being a C Corporation. You may want to favor/explore being a C Corporation in these circumstances: You’re exploring providing your employees with fringe benefits; you’re planning on having your business retain its earnings for future growth; you’re considering venture capital; you […]

02Sep 2020

Why choose to operate my business through an LLC instead of an S Corporation?

If you want your business life to be simpler, LLCs are the way to go. Unlike a corporation (S Corporations and C Corporations are all corporations, right? Right!), LLCs in California don’t have a requirement to hold meetings or keep annual minutes, unless they agree to do so. LLCs are also automatically taxed as a […]

10Aug 2020

When should I dismiss using a C Corporation?

It’s Opposite Day! Take a look at this FAQ: When should I use a C Corporation for my business and if none of those apply, then you should probably steer away from a C Corporation due to the downsides of double taxation, where the income is taxed on its way in to the corporation, and […]

27Feb 2020

I’ve heard that California has limitations on what type of business can be operated through an LLC. Is that true?

True! California has placed a limit on what businesses can be operated out of an LLC. The general rule is no professionals, and though typically the rules point to any professional named in California’s Business and Professions Code, there are some exceptions. One exception is licensed contractors; additionally, some “professions” that don’t require testing, experience, […]

27Feb 2020

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.

09Apr 2020

What’s a Tax Allocation?

A tax allocation is what happens in your tax world when you’re a partner in a partnership (or a member in an LLC taxed as a partnership). Partnerships themselves generally are not taxed; the tax obligations are “passed through” to its partners. So you might think: well, if the partnership doesn’t give (distribute) any money […]

25Feb 2020

How much additional overhead costs will I incur if I transfer my business into a Corporation?

In addition to the expenses you’ll incur for forming your corporation or LLC, there will be a number of expenses you should take into consideration when weighing the pros and cons of operating from an entity. Here’s a short list: an additional tax return (CPA fees), $800 minimum to the California Franchise Tax Board (regardless […]

03Nov 2023

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. […]

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