Articles Posted in Limited Liability Companies

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AdobeStock_193656039-300x200Many Californians start their own business without creating a separate legal entity. An individual who does this is known as a sole proprietor. If this describes your current setup, you may want to consider adopting a more formal structure, such as a limited liability company, as your business continues to grow. The California LLC attorneys at Structure Law Group can advise you of the risks and rewards of such a move.

Legal Liability and Tax Considerations

The benefit of being a sole proprietor is that you generally do not need to file much if any legal paperwork. Any income or losses incurred through the business is simply reported on your personal tax return at the end of the year on your IRS Schedule C.

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AdobeStock_102097403-300x200As of January 1, 2024, all entities that are not exempt in California must file reports on their “beneficial ownership” with the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). These reporting rules were part of the Corporate Transparency Act (CTA), which itself was enacted by Congress as part of the 2021 Department of Defense authorization bill. The Los Angeles corporate law attorneys at Structure Law Group, LLP, can advise you on your company’s obligation under the new rules and how to avoid potential regulatory issues with FinCEN.

New Requirements for Disclosing “Beneficial Owners” of Foreign and Domestic Companies

At its core, the CTA is an effort to enhance the Treasury Department’s ability to identify and take legal action against potential money laundering activities. In adopting the CTA, Congress determined that many actors involved in illegal activities like terrorist and tax fraud used “shell” companies to conceal their identities and move their illegally obtained proceeds through the U.S. financial system undetected. Given that corporation law varies from state-to-state, there were no uniform national requirements for reporting the actual or “beneficial” owners of many corporate entities.

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AdobeStock_377903759-300x200Incorporating a business in Texas involves filing incorporation paperwork with the Texas Secretary of State through a fill-in-the-blank certificate of formation that can be completed with or without the help of a lawyer. The Texas Secretary of State recommends that a decision regarding the business structure is one a person should make in consultation with a Texas corporate lawyer and accountant.

An individual person, other corporations, limited liability companies (LLCs), partnerships, and foreign entities can all incorporate businesses in Texas. Incorporating a business will protect the personal assets of a company’s shareholders from business obligations and debts. This article provides an overview of the steps involved in forming a Texas corporation.

Selecting a Corporate Name

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Untitled-design-54-300x214If you have an LLC from another state, you might wonder whether you need to move it to California. This process of conversion (also called “domestication”) does take time and effort. There are, however, important reasons why you should invest in this legal protection. The San Jose LLC attorneys at Structure Law Group are here to answer all your questions about out-of-state LLCs. Our San Jose business formation lawyers have helped many business owners find the right business entity, form their business properly, and domesticate out-of-state businesses as California LLCs. Learn more about how to move your out-of-state LLC to California properly.

How do I file paperwork to domesticate a “foreign” LLC?

The Office of the Secretary of State handles conversions of out-of-state LLCs. (The term “foreign” business refers to any business established outside of California, even if it is inside the U.S.) Forms and fees must be submitted to this office, and it is important to be sure that your paperwork is completed correctly. Errors can leave your business without LLC protection.

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AdobeStock_180825526-300x184One of the first steps to starting your business is forming the business entity.  For a variety of reasons, a limited liability company (LLC) can be an attractive option. There are several benefits to creating an LLC, and an Texas LLC lawyer can help you take all of the necessary steps to help you take advantage of them.

If you are starting a business, one of the biggest advantages to an LLC is that it can limit your personal liability for debts the business incurs, meaning that your home and personal bank account cannot be used to pay business debts or any liabilities if you or a business partner are sued. Additionally, you may deal with less paperwork once the LLC is up and running, there may be certain tax advantages, and you have flexibility to make the LLC operate how you want it to when it comes to ownership, management, and how profits are shared and distributed amongst the owners.

Steps to Starting an LLC

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One of the legal services that corporate attorneys provide is advising startups with strategies to protect their long term interests. Each business entity has specific tax requirements and a San Jose business attorney can help you determine which is best for your venture. In this article, we’ll discuss specific business entities and how they’re taxed.

  • Sole proprietorship

A sole proprietorship is not a business entity. It’s the default state of an individual who owns a business. Those who run sole proprietorships are taxed as individuals with assets and profits. The biggest pitfall of the sole proprietorship is that you end up paying both the employee and the employer side of social security. These are typically split between employer and employee.

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AdobeStock_308752576-300x200Many business owners form limited liability companies (LLCs) or corporations specifically to create a business entity that will be separate from themselves and spare them personal liability. The alter ego theory often applies in many cases in which parties seek to “pierce the corporate veil” and hold a corporate officer accountable for their company’s misdeeds, and any person facing these types of issues will want to quickly contact a Texas corporate attorney.

The alter ego theory establishes that people can be liable when they are using a corporation to engage in fraud and shield themselves from liability. While courts have long recognized most business entities as being legitimately free from liability, the alter ego theory allows courts to impose liability on bad actors.

Texas Laws Relating to Alter Ego

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AdobeStock_244916454-300x200A limited liability company (LLC) is a type of business entity. When formed properly and managed correctly, this business type can offer some protection from liability. Many business owners prefer the LLC because it can protect their personal assets from being used to satisfy the debts of the business. An LLC is not, however, the only business entity type that exists. Los Angeles business owners should consult with a business formation lawyer to explore the different options. A Los Angeles business formation attorney can help you select the business entity that best meets your specific business goals. At Structure Law Group, LLP our experienced Los Angeles LLC lawyers help entrepreneurs form LLCs to protect their assets and run these businesses in ways that minimize the LLC owners’ personal liability.

What Are the Benefits of an LLC?

There are many benefits to forming an LLC. When one or more owners – also referred to as “members” – form an LLC, these members can protect their personal assets from being used to satisfy business debts. Only their initial investments are placed at risk. However, there are many legal formalities that must be observed to enjoy this protection. The LLC must be formed properly under state laws. Here in California, doing so means filing the required paperwork with the California Secretary of State’s office. The business must also observe certain formalities in the way it is run post-formation. This observation of formalities requirement means that LLC owners do not simply get automatic protection as soon as they have filed the LLC paperwork with the relevant state.

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AdobeStock_119264482-300x204Naming a business is a critical component of branding strategy for a person or entity involved in a California business. When the name of the business does not include the owner’s last name, a person or entity has to file a fictitious business name (FBN) statement with the office of the Registrar-Recorder or County Clerk in the specific county location for the business. This process is also known as registering a “Doing Business As” (DBA) or “Trade Name,” and a business without a location in California will have to register with the Clerk of Sacramento County.

The DBA requirement can be confusing for many people, but you do not have to handle everything on your own. Contact an LA business formation attorney with Structure Law Group, LLP for help with all your DBA needs.

When DBAs Apply

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AdobeStock_255732380-300x200There is no legal requirement that you have an attorney to set up an LLC. There is also no legal requirement that you have a defense lawyer represent you in the criminal court, but in both cases, your legal rights can be seriously impaired if you do not get legal advice. Structure Law Group is a Bay Area business law firm that helps business owners set up LLCs with as much legal protection as possible. Our Silicon Valley LLC attorneys have helped entrepreneurs form businesses in a wide range of industries.  Here are some of the most important reasons you should hire a lawyer to help you set up your LLC.

A lawyer will make sure you select the right business entity.

There are many business entities from which to choose. An LLC is just one of several options, and it may not be right in every situation. It is important to consult with a business formation attorney to be sure that you are selecting the best business entity for your specific needs. The IRS recognizes many business entities, including:

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