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LLC Formation Lawyer In Newport Beach, CA

Embarking on the journey of starting a new business can bring both excitement and trepidation. Establishing a business in California can be a complex endeavor, requiring the guidance of a knowledgeable Newport Beach LLC formation attorney. If you’ve already determined that an LLC is the appropriate business structure for you, our team of business lawyers can provide invaluable insights on entity formation and structure. At Finn Legal Group, we will help you navigate the intricacies and advantages of different business types in California. Whether you’re just beginning the process or ready to dive into forming an LLC, our team is ready to assist you every step of the way.

Types Of LLCs In California

Standard LLC

An LLC, or Limited Liability Company, is a unique business structure that offers numerous benefits. Under the California Limited Liability Company Act, an LLC can be established, and similar laws apply in other states.

Combining elements of corporations and partnerships, an LLC provides limited liability for business owners, akin to corporations. However, forming and operating an LLC is typically more affordable and straightforward compared to corporations. Unlike corporations, LLCs do not require a board of directors or shareholder meetings. Instead, they offer personal asset protection for members.

One of the advantages of an LLC is its status as a pass-through tax entity, similar to partnerships. This means that profits and losses are passed through to the personal taxes of the business owners.

Single-Member LLC

A single-member LLC is a specific type of limited liability company in California that is owned by just one individual. As a result, sole proprietors who are currently running their businesses often prefer to choose single-member LLCs. Additionally, in California, if you and your spouse jointly own an LLC, you have the flexibility to be treated as a single owner while still managing your business as a single-member LLC.

Under the current IRS regulations, single-member LLCs are automatically taxed as disregarded entities, meaning they are disregarded for Federal income tax purposes. However, it is possible to change the tax status of your LLC if you prefer to be taxed differently. For most small businesses, being taxed as a disregarded entity is the simplest and most cost-effective approach.

Foreign LLC

A California Foreign LLC refers to a business established outside of California but intends to operate within the state. To conduct business in California, it is necessary to register your company with the California Secretary of State. It is important to note that “foreign” in this context does not mean outside of the country, but rather outside of California but still within the United States. Conversely, a business formed and operating within the same state is known as a “domestic LLC.”

Under California’s LLC Act, foreign LLCs must register with the state if they engage in business activities within its borders. Additionally, if a company establishes a physical presence in California, it is required to collect sales tax on sales made to state residents. Compliance with California privacy laws and corporate registration requirements is crucial for companies dealing with financial information, consumer data, or engaging in the sale of consumer data.

If you are considering establishing a foreign LLC in California, we recommend reaching out to our experienced Newport Beach LLC lawyer at Finn Legal Group. Our team can provide comprehensive guidance and assistance throughout the entire process.

How To Form An LLC In California 

In order to establish an LLC in California, you will need to navigate through a series of steps, which are likely to encompass the following:

  • Decide on a unique name for your LLC, and check with the California Secretary of State database to ensure that the business name is not already in use;
  • File your Articles of Organization (Form LLC-1) with the California Secretary of State;
  • Appoint an agent for service of process (also known as a “registered agent”) who resides in California;
  • Determine whether your LLC will be managed by the members or by a group of appointed managers;
  • Create an LLC operating agreement;
  • File a Statement of Information (Form LLC-12) within 90 days after filing for Articles of Organization;
  • Pay your California taxes and file your California Form 568 (Limited Liability Company Return of Income); and
  • Work with your LLC formation attorney in Newport Beach to determine whether you need to have an Employer Identification Number (EIN) or local or state business licenses and whether you need to register with the California State Board of Equalization (BOE) and/or the California Employment Development Department (EDD).

Frequently Asked Questions

How Is A California LLC Taxed?

For federal tax purposes, single-member LLCs are typically treated as disregarded entities, while LLCs with two members are usually taxed as partnerships. Additionally, LLCs have the option to elect to be taxed as either a C Corporation or an S Corporation. At Finn Legal Group, we consider LLCs to be legal chameleons, capable of selecting the tax status that best serves the interests of the LLC and its members.

Before filing any paperwork with the IRS, it is advisable to consult with an LLC attorney to discuss your specific tax situation. They can provide a comprehensive analysis of the financial implications of your new company and help you avoid any unpleasant surprises during tax season.

How Much Does It Cost To Form A California LLC?

The fees for establishing a limited liability company (LLC) in California are subject to annual changes. As of the time of writing, the cost to file Articles of Organization with the California Secretary of State is $70. Additionally, there is a $20 fee for filing the company’s Statement of Information with the Secretary of State, along with the consideration of the $800 annual franchise tax fee.

Should I Still Carry Insurance If I Form A California LLC?

By forming a California LLC, you gain valuable personal protection against lawsuits and legal complications. Nevertheless, it’s wise to consider carrying a commercial general liability insurance policy. Depending on your specific business, you might also want to explore more specialized coverage options. Our Newport Beach LLC lawyer will guide you through assessing potential liabilities and offer valuable insights into the policies that best suit your needs.

Contact Our LLC Lawyer in Newport Beach, CA 

If you’re looking to start a new business and considering LLC formation, our firm has a skilled Newport Beach LLC lawyer who is ready to assist you. At Finn Legal Group, we bring years of experience in representing businesses and entrepreneurs with entity formation. Whether you’re in Newport Beach, Irvine, or Los Angeles, our firm provides services tailored to your needs. Contact us today to discuss forming an LLC in California.