Orange County Corporate Formation Lawyers
Forming a company in California is a big task to take into consideration. While it may seem like all that needs to be done is simply file a document with the state, there is much more involved with starting up a business entity, regardless of the time of entity you wish to form. If you are considering forming a business, contact an experienced corporate formations attorney in Orange County who can help you understand and go through the process.
Types of Business Entities
California offers different types of business entities for individuals to form. Each have many similarities and differences, and the type of entity you choose depends largely on the amount of freedom or protection you wish to enjoy as an owner. In California, common business entities include:
- Limited liability companies,
- Limited partnerships, or
- S corporations.
A corporation is a standard type of business entity and offers the most protection for shareholders than other entities. A “corporate veil” is put in place which protects shareholders from any potential lawsuits. A downside to corporations include the double taxation that exists within a corporation. A corporation is initially taxed on its net profits. After distribution of earnings and profits as dividends to the corporation’s shareholders, the shareholders experience a second tax on this previously taxed profit.
A more common business entity is the limited partnership which is considered a pass through tax entity. This type of entity avoids any regulatory restrictions, although a general partner experiences unlimited liability and therefore may be held liable for any type of action brought against the partnership.
A hybrid cross between the corporation and the partnership is a limited liability company (LLC) which offers both protection from liability against its members and is considered a pass through entity. The LLC has emerged recently as a popular option for many new businesses and offers a way for small businesses to protect their assets and receive preferential tax treatment.
An S Corporation is an ordinary corporation, but is recognized by the Internal Revenue Code as a pass through entity. However, this type of corporation restricts the number of shareholders and prohibits the creation of more than one class of stock.
An experienced business law attorney in Orange County will help you decide which type of business entity has the structure best suited for your business endeavor and will draft and file all necessary paperwork with the Secretary of State.
Boyd Law | Orange County, California Business Law Attorneys
Whether you are contemplating opening a new business or altering the state of an existing corporate entity, do not hesitate to consult the attorneys of Boyd Law. Our attorneys have years of experience in handling corporate transactions and formations and the knowledge to best advise you on what the repercussions are for each type of corporate entity. Our attorneys have extensive experience in all types of the law and therefore can examine your corporate needs from all angles, considering tax implications as well. Contact our Orange County office today for your initial free consultation.