Incorporation Lawyer —Valerie Kramer— Can Help You Set-Up a Corp, and S-Corp or LLC Today
Incorporation Lawyer, Valerie Kramer assists San Diego residents – with their entity formation needs. Valerie has nearly 30-years experience in assisting individuals in exploring the pros and cons of each entity. For example, exploring the differences between a standard Corporation vs. S-Corporation, or value of choosing an LLC entity. As a result of your discussions with Valerie you can determine which entity would be the best for your circumstances.
Call Valerie at (619) 259-5030 to discuss the incorporation process – you are considering. In addition, Valerie can check entity ‘name availability’ for you if you are not certain your proposed business name is available.
What California Entity Type to Form?
Traditional C-Corporation ? — S-Corp ? — or LLC ?
Choosing the Appropriate Business Entity
Choosing the appropriate business entity (Corporation, S-Corporation, LLC) for your business is a critical business decision. Hiring a competent, experienced San Diego incorporation lawyer will provide you the time to ask critical questions. For instance, you will be able to kick around “what ifs.” Additionally, you can weigh the pros and cons of the entities and which would make the most sense for you.
You might be interested to which entities can easily be changed – years later to meet your changing goals. For example, many people doing business as a sole proprietorship will elect to start a Subchapter-S entity. As a result, people will often save tens-of-thousands of dollars in taxes yearly compared being a sole proprietorship! Who knew. Right? Such savings more than pays Valerie’s small fee right there. As your business grows, officers and employees added, it’s comforting you can easily transition to a standard corporation. Most importantly, Valerie’s affordable flat-fee provides you this valuable office-consultation time to get serious legal advice. In conclusion, all these extras are included in Mr. Kramer’s incorporation services.
Our Fixed-Fee incorporation lawyer Services is Affordable for the Smallest Start-up!
One Thousand dollars. Period. – Our fee is a few hundred dollars more than DIY Internet operations such as LegalZoom. However, unlike those at-your-own-risk services, you receive the personalized consultation time with an experienced incorporation lawyer. Therefore, you benefit having consultation time to ask practical and legal questions. You can get ALL your questions answered in a confidential setting. You could receive legal advice to clear up murky areas such as tax issues that keep you up at night. For those concerned with comparing tax advantages of different entities, you’ve come to the right place! Especially relevant is that your business is unique. You can ask Valerie all those unique questions that you are anxious about from a legal perspective.
Spending a few hundred more to have a 30-year experienced incorporation lawyer in your corner – rather than filling in an DIY Internet form is both savvy and wise. No matter whether you are incorporating your existing sole-proprietorship or starting a new business, you will be better served. No matter your experience level — a first-timer — or experienced person with multiple entities, you will have many questions. To that end, you can ask Attorney Kramer those questions you want to brainstorm and work through your “what ifs” in the confidence of attorney-client privilege. This is especially important to people who want to share aggressive tax savings or tax-avoidance strategies to brainstorm all ideas and see if they are savvy, legal or not recommended.
Upshot? You have the freedom and confidentiality to ask ALL the questions that you really want competent legal advice about.
What if you expect significant growth? Do you want your tax preparation to remain simple, while significantly lessening the chances for an IRS audit? What –exactly– are you trying to accomplish? These are the questions you can brainstorm with incorporation lawyer Kramer that is not possible configure an entity on LegalZoom.
Protect Your Personal Assets (Home, Cars, Cash, Etc.)
By setting up your business as a separate stand-alone entity – you can protect your personal assets: home, vehicles, bank accounts, etc.. By doing this, you will limit your exposure to just the business’s total assets. If the economy turns, should someone file a lawsuit (warranted or frivolous), you stand a far better chance of keeping your personal assets protected. As a bonus, you will often have it easier getting business credit and attracting investors. No matter what your objectives are, Valerie is a savvy incorporation lawyer who can help you with sound practical and legal advice. Valerie offers Fixed-Fee Incorporation or LLC Entity Packages – keep reading…
Fixed Fee Entity Pricing
The “fixed fee pricing” I offer for Business Entity Formation – is, for me, a “lost-leader” legal service. Yes, you can save a few hundred bucks at LegalZoom, but you will not get the legal brainstorming session, the legal advice, nor the practical legal coaching. This included legal and practical advice will help you keep your new legal entity valid. Many new business people allow their entities to fall apart in the first 18-months by overlooking some simple steps, canceling out the legal protections and tax savings. Such a shame. I will coach you to not miss these simple time-sensitive steps. All are paramount to keeping your business “street legal” so you can reap all the benefits of incorporating. Our time together will likely prevent you from calling an attorney in utter panic a year or five years from now with a lawsuit or tax audit letter.
Let me share what is included and what is excluded in my $1,000 lat Fee Entity Package for a typical Incorporation:
Please note that the flat fee does not include any extra agreements or services such as shareholder buy/sell agreements, voting trust agreements, or intellectual property services (i.e., trademarks). Any such extra agreements or services would be charged on an hourly rate basis.
Ready to Speak with an Incorporation Lawyer ?
Call now for a FREE telephone consultation.
Valerie will take your call personally!
Sanctuary for “Walking Wounded” who Started Company using LegalZoom
LegalZoom and other paper mills are no substitute – for setting up your business –your dream— correctly. It is like building a new $500,000 home on cinder blocks instead of a legitimate, solid, and legal reinforced-concrete foundation. Yes, it will cost a little more, but a new business (or a small sole proprietorship going mainstream) must be set up carefully. A new legal entity needs to be MANAGED so that any protections that the entity afford you are not unwittingly relinquished by inaction. The most common inaction is not following through on all the requirements that you MUST do to keep your new entity’s protections and tax advantages valid.
Setting up a new business entity is, in many ways, more serious – than getting married. If you choose the wrong entity, or then manage the entity incorrectly, you can end up broke and in debt. In fact, all your business and PERSONAL assets taken from you by strangers! Your dreams can forever be dashed on the rocks. These are the CALLS that an incorporation lawyer and business attorney will receive every year. It is so tragic and totally avoidable… If you had sat down with an incorporation lawyer who would have taught you how to care for your state-sanctioned & regulated legal entity.
Even if you do choose the proper entity, within just months – your state-regulated entity could lose its power to protect you. Why? Because you never were provided a list of all the ongoing steps you MUST make to have your entity remain in good standing with the State. In addition the those steps you must also be mindful of the State and Federal Taxing Agencies. For example, miss a seemingly harmless filing, fail to file a document, fail to keep minutes, then you can be taken down! A frivolous lawsuit (that would normally easily be rebuffed) could seize all of your business assets, and then pierce your worthless ‘corporate veil’ and take your personal home, bank accounts, and vehicles.
It just isn’t worth saving a few bucks by scrimping on setting up your business by working with an incorporation lawyer to start with. DO it right, and get some proper legal counsel in the package deal!
WILL A CORPORATION PROTECT ME?
THE DEVIL IS IN THE DETAILS – By Valerie L. Kramer
But here’s the rub. You MUST properly prepare and maintain your corporation. What does this mean? It means:
- Paying attention to details. Use your correct corporate name for ALL transactions, correspondence, invoices, internal memos, checking accounts, etc. Always sign documents in your corporate, not personal, capacity.
- File a Fictitious Business Name Statement if you want to use a variation of your corporate name.
- Make sure your business cards reflect both the proper name of the corporation and your title.
- Properly fund your corporation. Keep your money and that of the corporation separate. Your corporation is not your piggy bank!
- Properly document both loans and security interests for loans.
- Timely file the Statement by Domestic Stock Corporations.
- Make sure your stock is properly issued and that the proper Notice of Stock Issuance was actually filed with the State.
- Do have annual meetings of both shareholders and directors in addition to special meetings when necessary.
- Keep your corporate minutes up to date and in the proper form in your corporate book.
If someone sues you and you have failed to follow these requirements, the court may decide that your corporation is a “sham” or a “mere conduit” through which you conducted your own personal affairs. This will result in a judgment which “pierces the corporate veil” and allows the other side to reach through to your personal assets!
Don’t allow this to happen to you!
Don’t allow this to happen to you!
Get a Corporate “check up” today!
Call VALERIE L. KRAMER at (619) 259-5030
Get Authentic Legal Advice – We Are not a Paper Mill!
First order of business is to talk over your business plan – with an incorporation lawyer — what you do, your average transaction, whether your business will be retail, service, or professional, a profile of your typical client, and thoroughly talk through your personal and business goals and objectives. Then we can assist you in determining what entity formations would make the best sense to meet your needs of protecting yourself legally and possibly even saving you tens of thousands of dollars of taxes over what you have been paying. Yes! It is possible, especially for the small corporation run by a person or a married couple. There are often some compromises, but one will rise to the top of your list when you weigh the pros and cons based on your very unique circumstances.
Let’s Look at a Visual Info Graphic to Compare Entities
LIMITED LIABILITY COMPANY (LLC)
|Ease/Difficulty of Formation
|Articles of Incorporation must be filed with Secretary of State. Statement of Information must be filed within 90-days after incorporation. Notice of Stock Issuance must be filed. Structure/operating rules already provided for by statute, but if restrictions on stock transfer desired, then detailed agreement necessary. After formation, directors must be elected, officers appointed, bylaws prepared and adopted, and shares issued. Other organizational tasks must be completed as well, all of which should be reflected in corporate minutes.
|Articles of Organization must be filed with Secretary of State. Statement of Information must also be filed within 90 days of formation. Oral operating agreements permitted in some circumstances. When written operating agreement required, generally lengthy and complex.
|No filing required to form. Partners should, but need not enter into a written partnership agreement. Cost and complexity of written partnership agreement depends on structure and business of the partnership. Written p-ship agreement could cost more than incorporation.
|Managed by or under control of Board of Directors. Directors, who have to answer to the shareholders, generally determine corporate policy and “big picture” items; officers manage the day-to-day affairs.Corporate structure can be highly centralized, especially with many shareholders.
|Articles of Organization can state that the LLC is to be managed by managers. Otherwise, the LLC is managed by its members. An LLC may have officers. A written operating agreement may eliminate the right of members to remove managers. An LLC provides great management flexibility; however, care must be taken because the choice of centralized management is an indicia of corporate structure.
|Unless p-ship agreement states otherwise, all partners have equal say in the business. P-ship agreement can be very flexible in establishing who can control the operations of the business.
|Officers are agents of the corp… Neither shareholders nor directors have agency authority to bind the corp.
|In a member-managed LLC, every member is an agent of the LLC and the act of any member within the usual way of the business binds the LLC.In a manager-managed LLC, every manager is an agent of the LLC and the act of any manager in the usual way of the business binds the LLC, but the members can’t.Note that the Articles of Organization could limit the authority of members or managers to bind the LLC, but such limitations won’t be effective against 3rd parties who don’t have actual knowledge of the restrictions.
|Each partner is an agent of the p-ship. The act of any partner within the usual way of the business binds the p-ship. Note that a restriction on authority in the P-ship agreement will not be effective against 3rd parties who have no knowledge of the restriction.
|Liability of Owners for Business Obligations
|Shareholders are not generally liable for the obligations of a corp. However, they may be liable to the extent they personally guaranty corporate debts; to the extent they receive improper distributions; if a court “pierces the corporate veil” of a corp. to impose personal liability; if a controlling shareholder breaches a duty to the other shareholders or the corp.; or for their own malfeasance (bad acts).
|Members of an LLC are not generally liable for the obligations of the LLC. However, a member may be liable to the extent they personally guaranty the LLC’s debts; for the member’s own malfeasance (bad acts); to the extent they receive improper distributions from the LLC; and if a court “pierces the company veil” of an LLC to impose personal liability on the member. The “pierce the veil” criteria are the same as for a corp. except that the failure to hold meetings of members or managers or to observe formalities pertaining to meetings isn’t a factor if the LLC isn’t required to hold meetings.
|Partners are jointly and severally liable for the wrongful acts or omissions of any partner acting in the ordinary course of p-ship business or with authority of the partners. Partners are also jointly liable for all other obligations of the p-ship.
|Transferability of Interests
|Shares are more easily transferred (if there is a market) than p-ship or LLC interests. There are generally no statutory limits on the right of a shareholder to transfer his stock; consent of other shareholders isn’t required. But, in closely held corps (“mom and pop” corps), transfer or other disposition of shares is often restricted by a shareholder agreement or by provisions in the Articles or Bylaws.
|A member may transfer his economic interest without the consent of the other members, but this transfers only the right to share in distributions, profit and loss allocations, and does not transfer voting rights or the right to participate in management. Unless the operating agreement provides otherwise, the assignee of an economic interest cannot be admitted as a member without the consent of a majority in interest of other members.
|Interests are not easily transferred. A partner may assign his economic interest in the p-ship to a 3rd party, but this transfers only the right to share in distributions, profit and loss allocations, and does not transfer voting rights or the right to participate in management.
|Ability to Raise Capital
|A corp. is capitalized through equity contributions by its shareholders and loans both from shareholders and 3rd parties. Because of limited liability and relatively free transferability of shares and because the consequences of investing in stock may be better understood than investing in P-ships or LLCs, corps tend to be more attractive to risk capital.
|An LLC is capitalized through capital contributions by members plus loans from members and 3rd parties. Because of the tax treatment as a p-ship, the structural flexibility and the limitation of liability, LLCs are attractive to certain passive investors and may become attractive to venture capital.
|Generally comes from the partners’ capital contributions and loans, either from partners or 3rd parties. P-ships are generally not attractive to passive investors, because of the risk of personal liability and the lack of free transferability of the P-ship interests.
|Are interests in the Entities deemed Securities?
|Maybe. LLC interests will be securities for purposes of California law, unless all members actively engage in the management of the LLC. LLC interests may or may not be securities for purposes of federal law, depending on the facts and circumstances.
|Continuity of Business
|A corp. has an independent existence; it’s not terminated by the withdrawal, death, or other event affecting the shareholders, directors or officers. However, a corp. can be forced into dissolution under certain circumstances by either ½ of the directors in office or a shareholder or group who, together, hold at least 33 1/3 % of the outstanding shares of the corp.
|Unless otherwise provided in the Articles of Organization or a written operating agreement, an LLC will dissolve on a specified date or the written agreement of all members to dissolve. Cautionary Note: Continued existence is an indicia of corporate structure.
|Unless otherwise provided in a written P-ship agreement, a general p-ship may be dissolved by the express will of at least half the partners to dissolve and wind up p-ship business.
|Number of Owners Required
|Okay for Licensed Professionals in CA?
|Yes (professional corp.).
|No. An LLC may not perform any services that are licensed by the CA Business and Professions Code. This includes professions such as law, real estate, contractors, and even locksmiths!
|Yes, except that licensed professionals may not form p-ships with non-licensed persons.
Detailed Information about Most Common Business Entities
While there are many business entities that a business can choose, the most common types of entities are:
- Sole Proprietorship – A sole proprietorship involves an individual doing business in his or her own name. While it is a simple and flexible form of doing business including the simplicity of filing but one tax return each year, a sole proprietorship offers no legal protections. Such legal protections or “firewalls” that will protect the individual in regard to their personal assets against business creditors, customers, employees or stranger lawsuits. That said, the protection of personal assets can often also be significantly removed and sheltered by creating an estate plan that may have some asset protection components to better protect the business owner’s personal assets.
- Partnership – A partnership is an agreement between two or more individuals who will share the profits and losses of a business. A partnership is a flexible business entity formation that can offer protection of the partners’ personal assets against business creditors and customer, employee or stranger lawsuits. For professionals, there are special considerations that a partnership may offer, and the partnership formations would be designated as a Limited Liability Partnership or LLP.
- Corporation – A corporation is a formal type of business entity formation that will protect its shareholders from the liability of business debts unless the shareholders should choose to personally guarantee such debts. Often required by many vendors when significant materials or supplies are needed. Corporate dividends are subject to separate taxation, but for small businesses that can be minimized. Also there is the consideration of the extra costs involved in maintaining a corporation, some additional paperwork and tax returns which do not exist with some other simpler business entity formations.
- Limited Liability Company – For some new or existing small businesses, an LLC fills the bill for the most attractive business entity. LLCs have members, as opposed to the shareholders of a corporation while enjoying the same liability protection of the more complex corporation. Moreover, LLCs do not encounter the often harsher tax liabilities and maintenance needs required of a corporation.
We are here for you with affordable legal services. – Whether your business is located in San Diego, Riverside, or Orange County, incorporation lawyer Valerie L. Kramer can provide you with affordable legal services. Competent incorporation services to help you set up your business in a legal entity and then keep it and you (personally) protected and thriving.
Call Valerie to Share your New Business Dream, or check Name Availability
Call Incorporation Lawyer, Valerie L. Kramer, to explore your current opportunity or concern by phone, or to set up an office consultation. Valerie is dedicated to helping San Diego entrepreneurs, professionals and established business owners make educated, informed decisions legal decisions. Decisions about their new business endeavors, business formation choices, and other opportunities or troubles that invariably come knocking. Call Valerie Kramer at (619) 259-5030 today.