"With so many online incorporation services in the market, why should I retain a business attorney to help me incorporate and operate my start-up?"
Entreprenuers and startup businesses in San Diego County should be excited because San Diego Startup Week begins today and runs through Friday, June 17! The week of events "brings together entrepreneurs to share progress, exchange resources, and celebrate the thriving innovation community." With over one hundred and twenty-five events spread across this incredible week, there should be enough programming to interest every entrepreneur and startup business.
Many small businesses regularly use the term "S-Corporation", but we've found that only a handful of people actually understand what this means. In general, when a corporation is formed, it will be treated as a "C-Corporation," which means that the entity will be treated as a separate taxpaying entity from its shareholders. Therefore, the profit of the corporation is taxed as the corporate level and taxed again when it is distributed to the shareholders via dividend. This results in "double taxation." For this reason, many small business owners are interested in forming an s-corporation.
As we've noted before, online legal preparation services have not solved near as many problems for individuals and small businesses as their expensive television advertisements may lead you to believe. In fact, quite the opposite is true but many don't recognize the shortcomings and instead focus on the apparent cost savings. As one New York business divorce lawyer recently highlighted, documents from the various online legal services companies can often lack some crucial information that may actually cost you much more down the road:
California limited liability companies (LLCs) are governed by the California Revised Uniform Limited Liability Company Act (RULLCA). Under RULLCA, LLCs may be managed either by all of the members ("member-managed") or by one or more managers ("manager-managed"). As a default rule under RULLCA, the LLC is managed by all of its members unless the articles of organization and operating agreement provide otherwise. Corp. Code § 17704.07(a). Thus, we must ask "In practice, how do these two management types function?"
In honor of tax season, we wanted to remind our business clients that some legal fees may be deductible for tax purposes. Regardless of your entity type (e.g., corporation, limited liability company or partnership), we encourage all of our business clients to visit a local Certified Public Accountant (CPA) to discuss their unique tax situation and determine if any legal fees are deductible under state and federal tax laws.
Deciding on a specific structure of business entity is a fundamental choice for most entrepreneurs. Some of the most common business structures are:
When starting a business, there are many common mistakes made by entrepreneurs. By recognizing these mistakes early, or by preventing them altogether, the business will have a better chance of long-term success. Below are five tips that entrepreneurs should consider when starting their new business.