A corporation is a separate legal entity existing under authority granted by state law. It has its own identity separate from any of the people who own, control, manage or operate it.
Who manages the corporation?
Normally, management and control is vested in the board of directors, elected by the shareholders of the corporation. The directors generally make policy and major decisions but do not individually represent the corporation in dealing with third persons.
What is an S Corporation?
An S corporation is the same as a regular corporation, except when an election is made, profits and losses of the corporation are not taxed at corporate income tax rates. Instead, corporate profits and losses pass through the corporation and are allocated and taxed to each shareholder individually, in proportion to share holdings.
Who should think about forming a corporation?
Almost any one who has a business.
How do I form a corporation?
You begin by filing Articles of Incorporation. This can also be done either by your attorney or your accountant.
What is an LLC?
It is a legal entity that legally fits somewhere between limited liability partnership and S corporation. Like limited partnerships and corporations, an LLC is recognized as a legal entity separate and apart from its owners. Like a corporation, all owners are protected from personal liability for business debts and claims. LLC combines the "pass?through" treatment of a partnership with the limited liability accorded corporate shareholders.
Is there any limitation in forming LLC?
A business required to be licensed under the Business and Professions Code cannot operate as an LLC unless expressly authorized by statute.
How many people do I need to form an LLC?
In California, a limited liability company requires two or more owners.
Why should I think about forming an LLC?
You should consider forming an LLC if you are concerned about personal exposure to lawsuits arising from your business.
Is it difficult to form an LLC?
No. The existence of an LLC begins upon the filing of articles of organization with the Secretary of State. The person or persons who execute and file the articles need not be members.
Do I need a lawyer to form an LLC?
It is not mandatory. Secretary State Web site has the form, which you can download.
How do I operate my LLC?
Unlike corporations, LLCs are allowed to operate without holding regular ownership and management meetings.
Where can I get help with preparing an LLC operating agreement?
You can call your business lawyer or us.
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