Not only is it true . . . it’s worse than you think. When it comes to LLCs, the FTB collects a tax (the FTB calls it a [ahem] “fee”) above the $800 if the LLC’s revenues meet or exceed $250,000. Here’s a link to the graduated fee scale. The fee is capped at $11,790 […]
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.
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 […]
The answer in most situations is going to be yes. One of the virtues of an LLC is its simplicity. Once you choose to form your business as a corporation (and then an S Corporation), or to have your LLC elect to be taxed as an S Corporation, costs for tax returns, payroll, corporate state […]
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, you will need a new bank account, with a new tax ID number. Sorry.
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 […]
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 […]
Need? No. But if I were a litigation attorney who made money off of people’s mistakes, I’d say “Don’t have one and let the chips fall where they may — better yet, let state law govern your rights and duties.” But I’m in the business of preventative law. So, yes, you should have an operating […]
No, no, and no. In California, all that’s required for a contract (which is what an operating agreement is) to be effective, other than for residential real estate contracts, is a signature. And if the contract provides for an alternate method of signature, like exchanging documents in PDF format over email so that the signatures […]
Unanimous voting rights can bog down the governance of any enterprise, especially where there are several owners. Sometimes it’s necessary when, say, you have only two owners and they both want to be sure to be included in every decision. Typically, though, unless required by law, you’ll want to avoid unanimous voting requirements, opting instead […]