Forming a Limited Liability Company in California can be a great way to get started as a business owner due to the flexibility it gives you. One of the major advantages of this form of business is that the owners of a LLC are protected; their liability for any debts or obligations of the company is limited to the capital they have invested. Therefore, the owners do not risk losing personal assets outside the business. In a LLC the owners can all take part in the day-to-day management of the business unless prohibited by the company’s organizational documents. In addition, a LLC may choose to be taxed in different ways. For example, when paying income taxes in California, a LLC of one person will be treated like a sole proprietorship, while if the LLC is owned by more than one person it will be taxed as a partnership. The LLC may also choose to be taxed as a corporation.

Details to Consider When Forming a Limited Liability Company in California

When forming a Limited Liability Company in California, you will first need to choose a proper name for your company. By law, the name you choose can’t be confusing or misleading to the public, and must have “LLC,” “Co.” or “Ltd.” at the end of the name; identifying it as a limited liability company to the public. In addition, you should have an operating agreement between the partners that can either be in writing or oral. It is preferable to have the agreement in writing if disputes come up later on. The agreement would specify who would be in charge of the daily management of the company. The owners can share this responsibility, or even hire a manager to run the company. The LLC must also file articles of organization with the California Secretary of State, and pay the $70 filing fee. If you need help with the articles of organization for your LLC, there is a form that you can fill out to be in compliance. Alternatively, you may contact A People’s Choice for help with drafting your articles of organization, and other documents required when forming a limited liability company in California.

A People’s Choice provides low-cost non-attorney help with formation of business entities such as a LLCs. Similar to the articles of organization used in forming a corporation, the articles of organization for a LLC include information on: the LLC’s name and street address; the name and address of the LLC’s registered agent; and the purpose of the LLC. The articles can also specify when the business will come to an end. An LLC can last forever unless a different end time is specified. Within 90 days of filing the articles of organization, and for every two years after that, the LLC has to file a statement of information with the California Secretary of State. There is a fee for this filing. Last year, the Secretary of State released some guidelines on filing the statement of information. Finally, if you are considering forming a limited liability company in California, you should look into the other local and federal tax and licensing requirements to make sure you are in compliance before starting your business. Note that if you have a foreign LLC formed outside California, you need to register it with the Secretary of State if you wish to conduct business within the state.

Get Help Forming a California Limited Liability Company

A People’s Choice has been providing self-help legal document services for over 35 years and has established an excellent reputation in the community.  When you are ready to go ahead with your paperwork, information can be provided to us through our convenient online system, over the phone or in person. Although we cannot give legal advice, A People’s Choice can help you in preparing all the required legal documents to help you with your California Limited Liability Company without having to hire a lawyer.

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If you need more information about California business entities, do not hesitate to call our office.