by : admin Business

The Benefits of Forming An LLC in California

You’ve heard about LLCs and their popularity. Why are they so widely used and why is California such a prominent state for their formations? To follow are the advantages of forming an LLC in the state of California.

What are LLCs?

LLCs (or Limited Liability Companies) are very extensively used as business formations because of the company’s structure. They put owners in good positions in relation to personal asset protection, they are relatively easy to form, and they have favorable tax conditions. 

Why start an LLC in California? 

California can be considered a great place to start a business because it is ranked well within the US in relation to business. California has the largest economy in the US and has excellent access to venture capital. It is a very popular place for entrepreneurs! Statistically, California ranks, out of all 50 states: 1st in Access to Venture Capital, 2nd in Economic Climate, and 4th in Entrepreneurship. Not only this, but California is known for its culture and food, notwithstanding the fact that California gave rise to Hollywood, the absolute center of the American Film Industry.

The Benefits:

In summary, the benefits to be discussed in more detail related to ease of formation, protection of personal assets, lack of double taxation, fewer restrictions on how ownership may be structured, and increased credibility established in both clients and creditors.

It’s easy to start and simple to maintain:

In accordance with the benefits that all LLCs have as a business type, starting an LLC in California is fairly simple. The costs are minimal and paperwork for the maintenance of the company isn’t excessive. LLCs are not obligated to appoint formal officers, have year-to-year meetings, nor take down official minutes and submit proposals for the continuance of the business. 

No danger of having personal assets taken away:

A significant benefit of forming an LLC is that owners are protected far more than in other business types. You, as the owner, are not personally responsible for the debts and duties of the business. As such, should the business run into legal trouble or default on loans, your personal assets are not in danger of being repossessed. 

No double taxation: 

LLCs are not taxed twice like corporations are. Profits made from the business go straight to the owners and as such is reflected in their personal tax returns. Double taxation means that taxes are paid on the profits prior to the owners’ receiving their share, and they are then taxed again when the owners file their personal tax returns. Another benefit relating to tax is that LLCs have the option of being taxed as a C-Corp or as an S-Corp. This is a decision to be made by the owners and depends on which is most advantageous to the company. 

There is no set ownership structure:

LLCs can be constructed in many different ways. There can be only one owner or have many different owners. When the business is multi-membered, there are various ways in which the business can be operated. Should the members manage the business themselves, it’s called member-managed whereas if the members hire a manager, it’s called managed-managed. 

More trust in the business:

The LLC is known as a more official business structure, especially when compared to partnerships and sole proprietorships. Clients and creditors both tend to have more trust in the business when they become aware that it is an LLC. As such, clients are more likely to support the business and increase profits. Banks are also more favourable to giving business loans. This occurs after the LLC builds a credit history which allows the business to apply for loans and lines of credit. There are special funding-options available if the business is women-owned. 

More Information: 

Should you need more information, TRUiC expands on how to form an LLC in California, as well as the numerous advantages involved.

by : admin Business

How can a formation service help you?

So what exactly does the formation service entail? Are you starting off a new business and currently exploring avenues of how your business can grow and also be protected? Are you considering forming a Limited Liability Corporation (LLC) or a Corporation (whether it be C Corporation or S Corporation), but you are not by the means to afford an attorney? With the aid of the formation service businesses will no longer have the burden of filing and completing unnecessary and tedious paperwork relating to any business structure matters. Formation services is a third-party online platform that handles the entire business formation process at a very low cost.

What are the advantages for utilizing a formation service provider?

The business owner does not need to be concerned about any of the legal aspects when it comes to registering the business. The duty of business incorporation service providers deals with all of these aspects of the process.

All good service providers will ensure that their clients are notified about all future legal requirements that the owner will need to deal with as far as state requirements are concerned, removing the element of surprises.

The owner has no need to get involved regarding any of the steps for the process, as it is the duty of the formation service provider. This allows the business owner to focus their energy and time on getting the business off the ground.

The services of the formation service provider include support via phone, email, and online, allowing business owners to easily access any information regarding the status of the business formation process.

What are the disadvantages for utilizing a formation service provider?

The lack of personalization of the process, as when compared to utilizing the services of an attorney.

The services offered are very helpful and cost-effective, but utilizing the services of a legal professional can give the added benefit of insight and help with the starting of a business.

What should I look for in a service provider?

Options vary from one service provider to the next. Some offer entry-level packages to more elite packages, each offering their own perks and benefits. If a business owner is merely looking for something standard, without the necessary bells and whistles, then s a great place to start is to ensure that the service provider will provide the business with, the preparation and filing of the LLC, searching the availability of the business name, phone, and email support to clients, a portal that allows for documents to be accessed online, special credit card offers, the statement for the organizer, a free CPA assessment, a virtual business guide, a registered agent, the drafting and finalizing of the operating agreement as well as ensuring that the filing is done within a standard time frame.

At an added cost owner also have the option for extra services such as the option of choosing to have the filing done at an expedited time frame, allowed to also choose to have the filing done at a rush speed, banking resolution, employer ID number, worry-free guarantee, access to a business website, domain name privacy as well as access to a business email address.

So how do I decide which formation service provider to sign with?

For 2020 there were seven service providers identified as the top-ranking service providers, ZenBusiness, Rocket Lawyer, Incfile, Northwest, MyCompanyWorks, LegalZoom, and Bizfilings.

So how do I decide which service provider is the right fit for me?

ZenBusiness – Their services include; they do the business formation, the drafting of biennial or annual reports and ensuring that these are communicated to the respective businesses, assistance with EIN, drafting and finalizing of the operating agreement, providing the services as per the requirements of any registered agent services as well as ensuring that the respective businesses are provided with the best tax filing information and advice.

Rocket Lawyer – Their services include; they offer free incorporation services, they offer a registered agent services package that is valid for one year and they also offer legal services that include easy to use contracts and documents and they answer promptly to all legal questions, they also offer consultations with business lawyers and more importantly they have a wide range of exclusive discounts available.

Incfile – Their services include; a one year Registered Agent Services, they offer free shipping, clients are also able to do real-time order tracking and clients also have access to an online dashboard comprising Compliance tools.

Northwest – Their services include; a years’ free Registered Agent Services, plenty of industry experience ensuring to provide a personal touch as well as great customer support.

MyCompanyWorks – Their services include; after the formation process they have a start-up Wizard to aid with this formation, they also offer next day processing for all important documents as well as personalized Organizational meeting minutes and corporate bylaws.

LegalZoom – Their services include; they file all formation documents with the state, they offer a LegalZoom peace of mind review as well as a one-to-one customer support base.

BizFilings – Their services include; a six-months Registered Agent Service for free as well as a BizComply compliance monitoring tool and access to an extensive document library.

Deciding on which formation is best is guided by business needs. For more information regarding formation service providers click here.