The Articles of Incorporation or the Articles of Organization is one of the most important documents that you need to file when you’re forming a new LLC. However, this should be filed within the office of the Secretary of State. It should be noted that LLCs are required to operate within the limits as proposed by the state. Hence there are several important paths that are needed in order to form this type of business in California.
Forming An LLC In California
Limited Liability Companies or LLCs are very cost effective and simply to form within California. When bold and brave person do this, it provides several benefits for them. In the case of sole traders, they can easily form LLCs which allows them to protect their personal assets. Even in the instance where complaints are filed against the LLC, the business takes the hit and not your personal assets.
When it comes to taxes, the owners of the LLC aren’t required to pay any form of self-employment taxes. So, if you’re interested in forming your own LLC in the state of California, you’ll be required to register with the Secretary of the state. This is done in the following way:
* Submitting the completed forms that are required.
* Paying all of the fees that are applicable.
* The naming convention according to the state should be met.
Some states require LLCs to publish their completed Articles of Incorporation in local papers. This is simply a part of the process for registering a new LLC. However, this isn’t required for citizens within California. LLC structures allow members to be any of the following since they are widely flexible:
* A corporation
* An individual
* A foreign entity
* An LLC
In the state of California, there are still entities that are banned from forming LLCs these are insurance companies and banks. Outside of those two, just about anyone is able to form their own company. LLCs can be anything from multi-member, single-member, or owned by an individual or several persons.
LLCs within California can even be managed by a manager or by a member if desired. Member-managed LLCs usually operate like partnerships. This just simply means that each member can act as a manager if they desire. This allows them to make decisions on behalf of the LLC. If there is a manager, only the manager is allowed to make certain decisions that involve the daily activities of the company.
In the state of California, LLCs are the most flexible and the rules of the LLC are governed by the Operating Agreement. This is usually set forth when the company is formed and then registered. If you didn’t already know the Operating Agreement is required and used as the company’s first statement of official Information.
Forming An LLC In California
The following are the most basic steps that are required to being the formation of your LLC:
* Completing and submitting the Articles of Organization is a very easy and simple step that can be done on the website or in person.
* You’ll need to pay a one-time filing fee of $70. However, this applies to securing a certified copy of the document. In the instance where you need a copy, you’ll need to pay a fee of $75. All payments should be made to the Secretary of State in check form.
* Next, you’ll need to submit your Statement of Information which must be done within 90 days of the filing process. It for some reason the this isn’t done; your application may be cancelled.
* For starting new LLCs, you’ll need to pay a minimum of $800 in franchise taxes as stated by the state of California. This is paid to the Franchise Tax Board and must be done within just four months on the 15th of the start of the tax year.
* After your Operating Agreement is completed, you’ll need to ensure that each member of the LLC signs the document.
* Researching and becoming familiar with the various legal requirements of your LLC is an advantage. It even entails keeping your records and books updated and making them available during inspection as requested by the state.
When these steps are followed, you’ll be in the best position to start your LLC. Even though the process is very simple to start, it can still become easily overwhelming due to the paperwork attached.