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27Feb 2020

Will putting my personal residence into an LLC protect it from my creditors?

Sorry, but . . . LOL – no. People do try this, though. The purpose of an LLC, and therefore what it ultimately protects, by law, is to protect its owners (Members) from liability for claims made arising out of the operations of the business in the LLC. If a person obtains a judgment against you […]

09Apr 2020

How can I get my LLC to be taxed as a partnership?

Whew! A good question with a simple answer. When an LLC is formed with two or more members, it’s automatically taxed as a partnership. That’s it!

14Dec 2022

Does California collect a tax from California S Corporations, in addition to the $800 minimum tax?

Surprise! The minimum annual $800 each corporation (and LLC) is required to pay to the California Franchise Tax Board (the FTB) is only a minimum, not a flat tax. S corporations in California (strictly speaking, every S corporation that has California source income) are required to remit 1.5% of their income to the FTB annually. The […]

10Aug 2020

Can partners in a partnership get a W-2 and be “treated like an employee” like they can in an S Corporation?

Short answer: No. Long answer. When you turn one of your employees into a partner, that individual will switch from receiving a W-2 to getting a Schedule K-1. If you want your “partners” to be treated like an employee, then an S Corporation is the preferred approach (after you’ve determined that a C Corporation is […]

27Feb 2020

Is my business big enough to justify the additional overhead of a corporation or LLC?

“Big” is a relative term. Size isn’t always the only, or even a significant, element to determining whether you should entity-ize your business. If you run a small business, but it’s a high-risk business, like, for example, a liquor store, then the overhead of an LLC or corporation is probably not only a good idea, but […]

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 […]

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 […]

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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