California Single-Member LLC Formation
Freelancers - Consultants - Creatives - Marketers - Entrepreneurs - Contractors - Sole Proprietors.
Thinking about forming an LLC to operate your California based Business?
Comprehensive LLC Formation Package with S-Corporation Status
Set it up in a few simple and easy steps.
Benefits of Forming a Single-Member LLC
Limited Liability Protection
Protect your personal assets from the operations and liabilities of your business. Your car, your watch, your cold storage wallet, it would be a shame to lose those things because something went wrong with your business activities. By forming an LLC you limit the assets third parties can go after to satisfy liabilities. The reach of creditors and third parties would be limited only to the assets of the LLC.
On the other hand, when you operate as a sole proprietor, third parties can come after your personal assets in order to satisfy liabilities of the business. No one in their right mind would want that to happen. A large judgement levied against you can be devastating and follow you around for the rest of your life.
Potential Tax Benefits
You may be able to save on taxes by electing S-Corporation status. People often mistakenly believe that they have to choose between an LLC and an S-Corporation. That is not true. An S-Corporation is only a tax election made with the IRS. Both LLCs and traditional corporations can make an S-Corporation election with the IRS.
In certain cases, making the S-Corporation election along with forming an LLC can lead to greater tax savings. Fortunately, making an S-Corporation election with the IRS for an LLC is a straightforward process.
Legitimacy & Branding
- Give your business operation a branding boost that adds credibility. Taking the time to incorporate your business will signal to your customers and clients that you are a professional. It will also show those you are dealing with that you deserve and expect to be taken seriously.
Comprehensive Package Includes:
Determining whether your chosen LLC name complies with California law
Determining name availability for your chosen LLC name
Drafting your LLC's Articles of Organization
Filing your LLC's Articles of Organization with the California Secretary of State
Drafting the LLC's initial Single-Member Manager-Managed Operating Agreement
Preparing the LLC's first organizational resolutions, including an authorization to open up a bank account
Applying for the LLC's Employer Identification Number ("EIN") with the IRS
Prepare and file the initial Statement of Information of the LLC with the California Secretary of State
Provide a memo outlining important LLC operational and compliance issues as a going concern moving forward
Up to 1 hour in-office or phone consultation with attorney Hadi Harp to discuss general business issues
- If requested and applicable, prepare and file an S-Corporation election with the IRS*
Harp Law Flat-Fee: $800
Secretary of State Filing Fees: $111
If seeking S-Corporation status: + $89
Can I Form a Single-Member LLC With My Business Partner or Partners? How about my spouse?
Business Partners: No. The LLC package is only available if you are interested in forming a Single-Member LLC for your sole proprietor operations in California. The name kind of gives it away. A Single-Member LLC is for those operating a business on their own, in the same sense as "sole" in "sole proprietor." If you are planning on operating a business with other partners, we can still help. However the pricing and process is a little different. This is because the operating agreement with more than one member is much more complicated and nuanced. You can contact us directly for more details.
Spouse: Yes. The only exception to the "single" aspect of things would be if you are married and will be operating the LLC with your spouse. In that case, despite there being two of you, married couples in California may be considered one person for the purposes of a Single-Member LLC.
What Else You Might Need to Know
In California, there is annual minimum franchise tax fee of $800 for operating an LLC or any other incorporated business. This means if your business generates zero dollars ($0) of income in a year, the California Franchise Tax Board will still expect a payment of $800 with your state tax return. Bummer. But its a small price to pay for the benefits stated above. Plus, the game here is to create a successful business so hopefully you'll generate so much income that the minimums won't even apply to you.