A limited liability company (LLC) is a type of business entity that provides some of the best features of a sole proprietorship, general partnership, and corporate structures. The LLC model offers liability protection, benefits relating to pass-through taxation, and other advantages.
If you think that an LLC is the right business entity for you, talk to a business attorney today and follow the steps outlined below. These steps will make the overall process of forming an LLC easier.
You must choose a company name before starting your LLC. The name must be unique and must comply with all the guidelines of California naming requirements. You can search on California’s website to ensure that the name is not currently being used by any other business.
You must incorporate the phrase limited liability company or the abbreviation LLC or L.L.C. into the name if you are opening an LLC in Los Angeles. Confusing words that may indicate your entity is associated with a government organization, bank, medical practice, or law firm must not be used if not accurate.
If you need to change your business entity name or structure, it can be done by following a stipulated process. To change your status with the IRS, there is a form IRS 2553 where you can check whether your LLC is eligible for converting to S Corporation.
To convert LLC to S Corporation, you need to check S Corp requirements, review the due dates for Form 2553, and then complete the form. The eligibility can be seen by determining the number of shareholders, the citizenship of the shareholders, and the class of stock of your business.
Note, however, that changing the corporate or tax structure of your business can have drastic consequences. Talk to an attorney before making any rash decisions.
You will need the help of a registered agent or an agent to accept the service of process for legal documents. This is an individual or entity that can officially accept documents on behalf of your entity.
This includes important documents such as tax forms, lawsuit notices, legal documents, and other important information relating to your business. The registered agent is also the point of contact between your LLC and the state. Many times you can be your registered agent for your company.
To open LLC in Los Angeles, you need to fill out an initial statement of information which is from LLC-12. This form needs to be filed with the California Secretary of State. The time frame for filing is 90 days and you can file through the mail, in-person, or online. The statement of information must include the following:
The membership of an LLC needs to determine how the entity will be managed. Some LLCs choose to let members manage the entity. However, others may appoint managers to look for their management. Managers are responsible for day-to-day activities including modifying any business plans, purchasing real estate, or taking a loan.
The California Secretary of State does not require an LLC operating agreement. However, it is essential to have an operating agreement that will help you specify all the ownership structures and other necessary details.
A Los Angeles Business Lawyer will help you to understand what you need in an operating agreement and how it can help you succeed.
Whether it is a domestic LLC or a foreign LLC, for a business doing business in California, taxes must be paid to the California Franchise Tax Board (FTB). The LLC must follow all the rules and regulations promulgated by California and published in the corporate tax code.
Your entity will need an IRS Employer Identification Number (EIN). You may also require business licenses depending on the type of your business entity. You must also pay all the state and employer taxes for your LLC. A business lawyer can help you set this up correctly on the front end.
It may be difficult to understand the complicated procedure of opening an LLC in Los Angeles. An experienced business attorney can assist you in understanding and implementing every step of the procedure of starting your LLC.
Your attorney may also give you valuable tax insights and other related information. Call us at 323-300-4184 if you want to know whether the LLC structure is the right business entity for you.