Is a Limited Liability Company (LLC) Right for Your California Business?
September 25, 2019
A limited liability company, or LLC, is a popular election through which businesses form their organizations. An LLC is somewhat of a hybrid in that it combines the autonomy of a sole proprietorship or partnership while limiting one’s exposure to personal liability against debts.
While LLCs are generally a safe choice, speaking with a business attorney in San Francisco, CA can help you understand the options available to you under various structuring options through the state. There are several choices, so you want to make sure you select that one that makes the most sense for your situation and industry.
Here are a few key points that you may want to consider before deciding if an LLC is right for you:
Structure Determines Operating Factors
An LLC can support one or more owners. These named individuals are known as members. Each member can be a person or another organization. There are no limits to the number of members you can have. LLC owners can manage the business as they choose on a day-to-day basis.
You also have the flexibility of naming anyone that you choose as a managing member of the organization. There are no limitations.
Managerial Flexibility May be an Attractive Option
LLCs are a better choice for organizations in need of managerial flexibility. An LLC election does not require members to hold formal meetings like a corporation. Instead, LLCs file an annual report with the California Secretary of State’s Office.
However, your compliance is critical to the success of your ability to operate as a legal entity in the state. Make sure you are filing your annual report, on time, every year. If there are issues withstanding that prevented you from doing so, a lawyer can execute a plan that gets you back on track.
Avoiding Double Taxation is a Critical Difference
An LLC is considered to be a ‘pass-through’ corporation. This designation means that the LLC does not pay taxes. Instead, members file individual profits or losses on their personal tax returns, thereby avoiding double taxation.
Work with a Business Lawyer in San Francisco
California statutes do not require that you keep a business attorney on retainer. However, an experienced lawyer can act as a trusted advisor on legal matters your business may face. Statistically speaking, issues are bound to arise over time.
Even if you do not foresee litigation and conflicts on the horizon, a business lawyer helps you stay compliant within your industry. He or she can alert you to new developments in California legislature that may affect how you earn revenue.
Consider Discussing Structuring Options with a Business Lawyer in San Francisco, CA
At De Cárdenas Law Group, it is our mission to see you succeed in every legal aspect of your business. Our services help our clients stay compliant as a lawfully operating business You can schedule a meeting with one of our business attorneys in San Francisco or South Pasadena, CA by calling (626) 577-6800.