Do you need a lawyer to set up LLC [FAQ]

Last updated : Sept 12, 2022
Written by : Theron Maas
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Do you need a lawyer to set up LLC

How do I set up an LLC in California?

To form an LLC in California, go to, log in, select Register a Business under the Business Entities Tile, Articles of Organization - CA LLC and follow the prompts to complete and submit.

Can a lawyer form an LLC in California?

The short answer: no. Lawyers in California, along with a set of other professionals, are prohibited from forming a California LLC, or LLC formation. In other states, professionals are required to start PLLCs, Professional Limited Liability Companies, instead.

Where is it cheapest to form an LLC?

The advantages of forming a Delaware company are numerous and many of the top companies in the world have chosen to form an LLC in Delaware (see 11 advantages here). The cost to form an LLC in Delaware is among the lowest in the country.

How much can an LLC write off?

If you have $50,000 or less in startup costs and are in your first year of business, the IRS allows you to deduct $5,000 in startup costs and $5,000 in organization costs as a tex deduction. If your startup expenses exceed $50,000, the total deduction will be reduced by however much your expenses exceed $50,000.

How long is an LLC good for in California?

You'll need to file your first Statement of Information within 90 days after the state approves your California LLC. Afterwards, you must submit it once every 2 years to keep your business in good standing.

At what point do I need an LLC?

Who Should Form an LLC? Any person starting a business, or currently running a business as a sole proprietor, should consider forming an LLC. This is especially true if you're concerned with limiting your personal legal liability as much as possible. LLCs can be used to own and run almost any type of business.

How long does it take to become an LLC in California?

You can form an LLC in California in 3-5 days if you file online (or 2-3 weeks if you file by mail).

What are the benefits of an LLC in California?

  • Pass-through taxation.
  • Tax options like S corp.
  • Simplicity.
  • Ownership flexibility.
  • Increased credibility.
  • Name registration.

How do you start an LLC?

  1. Step 1: Choose a name for your LLC.
  2. Step 2: Reserve a name (optional)
  3. Step 3: Choose a Registered Agent.
  4. Step 4: Prepare an LLC operating agreement.
  5. Step 5: File organizational paperwork with the state.
  6. Step 6: Obtain a certificate from the state.

What businesses can't be an LLC in California?

In most states, licensed professionals (architects, accountants, doctors, lawyers, therapists, etc.) offering professional services cannot form a “regular” California LLC, but instead must form a Professional LLC (PLLC).

Can a nurse form an LLC in California?

A Nursing Corporation can't be opened as an LLC in California. The California Corporations Code does not certify LLCs (Limited Liability Companies) for the purpose of practicing registered nursing. For a registered nurse to provide professional services in California, they must open a Professional Corporation.

What kind of business can I start with an LLC?

Most types of businesses can be limited liability companies. Typically the only exception is a professional partnership, such as a law firm or doctor's office.

How can I get a free LLC?

  1. Six Steps to Forming an LLC for Free.
  2. Get a Business Name.
  3. Appoint a Registered Agent.
  4. Get a Copy of Formation Document From the Secretary of State Website.
  5. Explore Other LLC Formation Options.
  6. LLC Operating Agreement.
  7. Fill Out and File the Formation Document.

What state is the easiest to form an LLC?

Delaware takes one of the top spots as the best state to form LLC. More than 50% of all U.S. publicly-traded companies and roughly 63% of Fortune 500 companies are incorporated in Delaware.

Can an LLC write off car payments?

Can my LLC deduct the cost of a car? Yes. A Section 179 deduction allows you to deduct part of or the entire cost of your LLC's vehicle.

How does an LLC affect my personal taxes?

The IRS disregards the LLC entity as being separate and distinct from the owner. Essentially, this means that the LLC typically files the business tax information with your personal tax returns on Schedule C. The profit or loss from your businesses is included with the other income your report on Form 1040.

What deductions can I claim without receipts?

  • Maintenance.
  • Loan interest.
  • Registration.
  • Insurance.
  • Fuel.

How can I avoid $800 franchise tax?

The only way to avoid the annual $800 California franchise fee is to dissolve your company, file a 'final' income tax return with the FTB and to submit the necessary paperwork. Once your company no longer exists, neither does your liability protection.

How do you maintain an LLC?

  1. File a separate tax return when necessary.
  2. Sign documents in the name of the LLC.
  3. Keep detailed records.
  4. Comply with all annual filing requirements.
  5. Adequately fund the LLC.
  6. Keep separate bank accounts.

How do I file taxes for my LLC?

If the LLC is a corporation, normal corporate tax rules will apply to the LLC and it should file a Form 1120, U.S. Corporation Income Tax Return. The 1120 is the C corporation income tax return, and there are no flow-through items to a 1040 or 1040-SR from a C corporation return.

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Do you need a lawyer to set up LLC

Comment by Alfredo Denni

Now useful and this video can Asus

Thanks for your comment Alfredo Denni, have a nice day.
- Theron Maas, Staff Member

Comment by Tony

hey guys one minute with eric so everyone always asks me do i really need a lawyer and you know what the answer is no no you don't you know you can represent yourself in court it's called being pro se you can write your own contracts you can go on the internet and see if you can find something that applies to your situation so the question is why do you need a lawyer well you need a lawyer because we're professionals we're good at this we do this for a living we are going to take a lot less time now if you have all the time in the world then what the heck you might as well teach yourself how to be a lawyer you can go to the law library and read the books and so when somebody says well do i need a lawyer to set up an llc i tell them no i'll point you to the state website get your credit card out but be wary you might do it wrong there's a lot of ways you can make mistakes well can you tell me how to do it i'm like well no i charge for that so one of the big things that comes up is llc taxation which is usually step two or three when we're creating a company if you just create it and you do nothing it's default but there's a couple other options so the three options are we can do default llc taxation which means if you're a single member it's sole proprietor taxation under the llc um the internal revenue code if it's multi-member you're gonna be a partnership under the internal revenue code and what that really means is it's just to go directly on your personal tax return so if for example my partner and i if this business was being taxed as a partnership then at the end of the year it would generate a tax return which is called a form 1065 and it would show our respective percentages it would show how much profit or loss the business had and then it would basically tell the irs hey you can expect to see this percentage on eric's tax return and this percentage on oscar's tax return that's what it would say so that's partnership um second option if you're eligible now not all companies are eligible but an llc can choose to be taxed as an s corp one of my most frustrating things is i ask someone what kind of company they have and they said oh well i have an escort they're not answering my question the correct answer is i have a florida corporation or i have a delaware llc that's the correct answer now if you want to elaborate you could say i have a florida llc that's taxed as an s corp now not all companies qualify typically you need to have only one class of shares you can only have up to a hundred shareholders and they must be natural born u.s people there's a few exceptions to that but generally speaking no foreigners no companies owning companies etc and so it's very typical for closely held businesses my law firm is taxed as an s corp and the correct answer is we are a florida corporation set up as a pa a professional association that is taxed as an s corp now contrast that with my girlfriend's company she owns a law firm happens to be an immigration law firm and her company is set up under the llc statute so it's a florida llc it's actually a pllc because she's a professional it's a florida llc that's taxed as an escort we're both the same in the eyes of the irs but in the eyes of the state of florida i'm under the corporate code she's under the llc code all right so not all companies qualify so if you have a partner in argentina who's not a us citizen or a permanent resident you can't have your company taxed as an s corp and if you get it wrong and you do an improper s corp election the you could get in trouble and essentially have to pay more taxes and penalties etc and now check this out the llc has a third option an llc can actually elect to be taxed like a regular corporation we call it a c corp season charlie so your llc has these three choices default pass-through either sole proprietorship or partnership s-corp if you qualify or c-corp which means it's going to file its own tax return in a form 1120 and it's going to pay its own taxes which right now is 21 now that might make a lot of sense i tell people there's three circumstances generally where you might want to be taxed as a sequor option number one is you're not planning on taking any money out and you're just going to keep the money growing and reinvesting and buying more widgets or more marketing or whatever it is you're going to keep buying and actually the 21 might be lower than if we passed it through to your personal taxes and you might be in a higher tax bracket i don't know 30 and so you know if i'm an s corp or a partnership and i'm at the 30 tax bracket and i want to buy more widgets i have to buy more widgets after paying 30 taxes instead i could do the 21 tax and then buy more widgets so that's one reason second reason is where we plan on having lots and lots of investors and in fact where maybe i'll be taking the majority of my compensation from the business as the ceo or the president or salary in that case it makes a lot of sense to be a c corp um frankly uh that's that works for a lot of my clients and a third situation is where we have a foreign owner now i can do a whole nother video on that in fact i will but with a foreign owner you can't do the s corp right so you only have the two other options option one partnership pass-through there's an automatic 30 withholding on the foreign owner's profits because the irs wants to make sure they get their money and then they would have to file a tax return and get a refund or option two be a corporation might be easier might be easier for them to just pay the 21 so thanks guys five minutes later talk to you soon bye

Thanks Tony your participation is very much appreciated
- Theron Maas

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