Start my own business LLC [Glossary]

Last updated : Sept 22, 2022

Written by : Quintin Haliburton

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What do you need to start an LLC in CA?

Name your California LLC.
Choose your registered agent.
Prepare and file articles of organization.
Receive a certificate from the state.
Create an operating agreement.
File a statement of information.
Get an employer identification number.
Pay the annual franchise tax.

Do you have to pay the $800 California LLC fee the first year?

If your California LLC goes into existence on or after January 1st, 2021 (but before December 31st, 2023), there is no $800 payment due the 1st year. The first $800 payment is due in the LLC's 2nd year.

How do I start an LLC in California for free?

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

What are the 3 types of LLC?

Single-member LLC for the sole-proprietorship (solo entrepreneur)
Multi-member LLC (member-managed LLC or manager-member LLC)
Domestic LLC and Foreign LLC.
Series LLC.
L3C Company (low-profit LLC)
Anonymous LLC.
Restricted LLC.
PLLC and LLC.

At what point do I need an LLC?

If you have business partners or employees, an LLC protects you from personal liability for your co-owners' or employees' actions. An LLC gives you a structure for operating your business, including making decisions, dividing profits and losses, and dealing with new or departing owners. An LLC offers taxation options.

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 from your taxes. If your startup expenses exceed $50,000, the total deduction will be reduced by however much your expenses exceed $50,000.

How long does it take for an LLC to be approved in California?

Mail filings: In total, mail filing approvals for California LLCs take 2-3 weeks. This accounts for the 3-5 business day processing time, plus the time your documents are in the mail. Online filings: In total, online filing approvals for California LLCs take 3-5 business days.

What should I name my LLC?

Make It Legal. The most important thing when you're choosing an LLC name is to make sure it's legal.
Make It Memorable. You want your LLC name to be something people can remember.
Make It Meaningful.
Make It Original.
Make It Distinctive.
Make It Domain Name Ready.
Make It Social Media Friendly.

Can LLC Get tax Refund?

Do LLCs get tax refunds? Generally, no. However, LLCs can elect to be treated like C corporations for tax purposes by filing Form 8832. If an LLC elects C corporation status and makes quarterly estimated payments higher than its tax liability for the year, the LLC can receive a tax refund.

How do I avoid LLC tax in California?

Can I avoid the California Franchise Tax? There's no way for a registered business to legitimately avoid the California Franchise Tax. Sole proprietors and general partnerships don't have to pay the California Franchise Tax, but they also don't have any personal liability protection.

How much does an LLC cost?

You can file the LLC filing documents online, by mail, or in-person when visiting the local SOS office. The filing costs usually vary from $50 to $150 which is a single-time fee. If you plan to form your company in another state, then you might have to provide additional documentation and pay a higher formation fee.

What are the benefits of an LLC in California?

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

What does an LLC do?

A Limited liability company (LLC) is a business structure that offers limited liability protection and pass-through taxation. As with corporations, the LLC legally exists as a separate entity from its owners. Therefore, owners cannot typically be held personally responsible for the business debts and liabilities.

Does an LLC need a business license in California?

LLCs, Corporations, LPs, LLPs, or GPs operating in California need to register and form their legal entity with the California Secretary of State's Office, file appropriate taxes, register as an employer, and obtain business licenses and other permits from appropriate cities or counties.

What type of LLC is best?

Company transactions.
Taxes.
Debts the business owes.

How does an LLC avoid paying taxes?

A general Corporation making a Subchapter â€œSâ€ Election or an LLC with or without a Subchapter S Election pays no federal tax on its taxable income and no employment taxes on its distributions to stockholders.

What are the benefits of an LLC?

Personal liability protection. One of the primary benefits of forming an LLC is that it separates your personal assets from the business.
Inexpensive and relatively easy to form.
Flexible taxation.
Ownership and management flexibility.
Appropriate for individuals.

Is it better to be self employed or LLC?

You can't avoid self-employment taxes entirely, but forming a corporation or an LLC could save you thousands of dollars every year. If you form an LLC, people can only sue you for its assets, while your personal assets stay protected. You can have your LLC taxed as an S Corporation to avoid self-employment taxes.

Should I start an LLC before making money?

Is an LLC Necessary To Start a Business? You don't need to start an LLC when establishing your business. However, if you want to differentiate between your assets and the company, an LLC is the right way to go. You should start an LLC if you want to start a business and protect your personal assets.

Is it better to be a sole proprietor or LLC?

One of the key benefits of an LLC versus the sole proprietorship is that a member's liability is limited to the amount of their investment in the LLC. Therefore, a member is not personally liable for the debts of the LLC. A sole proprietor would be liable for the debts incurred by the business.

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Comment by Arla Liew

hey guys welcome back to the channel so a question that i get all the time is charlie what is the best way to start an llc so in this video i'm going to show you the best easiest and most affordable way to start your llc today this is exactly how i've created my business entities and it's crazy because you guys can literally set up your llc in like five or ten minutes so the first part of the video is me just going over what llc's are and why they may be beneficial to you as an entrepreneur or small business owner the second part is going to be me taking you step by step through inc file which is the website that i use to set up all my business entities so if you do want to skip directly to that part i will put the time code down below right now so without further ado let's get started so firstly what is an llc an llc is a type of business structure that stands for limited liability company it's perfect for startups and entrepreneurs and i always tell people if you want to take your business seriously it may be good to start an llc because there's so many benefits first of all they limit your personal liability what this means is that if your company gets sued they can't come after your personal assets creating an llc also allows you to raise capital from investors and of course they do carry some big tax advantages yeah diving a little bit more deeply into the whole limited liability part if your business does something wrong and they actually get sued by someone then only the assets that are inside that llc are at stake so this means that things like your house your cars and any other personal assets are safe that's where the term limited liability comes from now if you are creating a business and you are looking for outside funding llcs allow you to raise the outside capital and of course llcs can have very specific tax advantages rather than starting a c corporation which actually gets double taxed with an llc this is called a pass-through entity so you're only getting taxed one time now i'm not going to go into too many of the details about the whole taxation of llcs because you can be taxed as an lc or as an s corp but just know that when it comes to this tax stuff i recommend talking to your accountant and figuring out what works best for you yeah for 99 of you guys out there who are starting your own business i'd say an llc or an lc uh taxed as an s corp is going to be right for you it's very easy and affordable to set one up so in the next section i'm going to actually walk you through the whole setup process so i'm here in ink files main page you guys can get to this link by clicking on the link in the description below and what i'm going to do is i'm going to come up here and click start my business so it's going to take us this page where it's going to allow you to actually register your business entities so first i'm going to click entity type and i'm going to select which one i want we're going to be doing an llc and then you're going to select your state of formation so it's going to be a little bit different for each state but most of things are going to be the same i'm in california so i'm going to click on that here it's going to take us to the different i guess plans that they have so you have the silver one which is 75 this is basically completely free because you're only paying the state fee of 75 bucks no matter what you do you will have to pay the state fee so if you do want to you know not pay anything then you guys can choose this one and it's gonna come with pairing and filing the articles of organization it's going to allow you to do unlimited name searches and it's going to give you a free registered agent service for one year now that is not the most popular plan it's actually not the plan that i recommend so when i set up my business entities i always used the gold plan this one is a little bit more comprehensive and it just makes the whole thing a lot lot easier so especially if you're just doing this like this is your first time making a business entity then you know this one's probably going to save you a lot of time and headache so yeah this one is 224 and the package fee is 149 so that's basically what you're paying to inc file to set this up for you and then the state fee is about 75 which you have to pay this one's going to include the same things as the silver except it's going to actually automatically create an ein business tax number for you so that's going to save you some time it's going to file the irs form 2553 it's going to actually give you a bunch of these like documents like the operating agreement the banking resolution all these things are pretty cool to have and they just save you a lot of time so honestly in my opinion i think this one is probably the best for most of you if you're down to do all this stuff by yourself and figure it out then yes you can save that extra 149 package fee but as a business owner you want to focus on on building your business not all this really boring stuff and of course they have their platinum plan this is their most expensive plan but also most comprehensive this one's 374 dollars at the moment and that includes the package fee of 299 dollars and the mandatory 75 dollar state fee this one's going to be just like the gold plan except that you're going to have a little bit more support you're going to have expedited filing and you're going to get that domain name and business email so for this one i'm just going to go ahead and select the gold package because i think that's going to be the right one for a 95 percent of you guys watching this video so it's going to have you enter in your contact information as well as your mailing address so i'm going to do that right now but so after all that is entered in i'm going to click next it's going to process the information and now in the next section it's going to allow you to select your state filing time now the original time it takes for california is around four weeks it might change a little bit for depending on what state you guys are in but they are going to have an expedited filing option that you can add on as well so if i want to just keep the four weeks filing time with the estimated formation date that is right here then i can just select that or if i want the faster five day business filing time i can go ahead and select that so assuming that i don't care too much about the filing time then i'll select that but if you are in a rush then i would go ahead and select the faster one here it's going to allow you to enter in your company information so this is stuff that you'll want to at least brainstorm beforehand so i'm just going to enter in a biz entity prep services just as an example since i'm not actually setting up this llc right now then i'm going to select the designators so you can choose any of these does not matter but i'm just going to select this one and it's going to give you a preview of what your company name will display as so in this case biz entity prep services llc then it's going to have you select your business type or industry so for this one let's just say it's account acc

Thanks for your comment Arla Liew, have a nice day.
- Quintin Haliburton, Staff Member

Comment by Arianna

and again Jim Hart back out you're here from Hawthorne law and today I want to share with you how to start an LLC [Laughter] this information is gonna be pretty much the similar regardless of what state you're in as an attorney I practice in North Carolina I'm also licensed in Florida so by the end of the day I'm going to tell you about the different steps you need to know if you're gonna start your own LLC and this is really important actually a client in yesterday he was wondering who was trying to going through a divorce situation and they have a business a rental property business that he needs to separate with his wife and they both want to keep the rental properties and we talked about one of the things they can do is start an LLC so how do you do that well it's actually pretty easy to do depending on the state you're on and before I get into that I want to remind you hit the subscribe button below make sure you comment like this video and share it with your following in social media we'd really appreciate it also hit the little bell thingy there should be a bail thing you down there as well I like to say bail thingy I don't know why so that you get notified when I post new videos so anyway here's the deal when you're starting an LLC the first thing you need to do is you need to do a search for your name you need to make sure your name is not taken and this doesn't need to necessarily be your brand name this can be a special name for your LLC your business name but you need to go to the way you're gonna do that is you're gonna go to your Secretary of State's website in the state where you're starting the LLC by the way I need to mention something right off the bat you do not need to go to Delaware you do not need to go to Nevada you do not need to go to why aunt Wyoming to start your LLC you can start your LLC in your own state if you're starting in another state then you're gonna have to register in your own state anyway as a foreign entity big mistake costs a lot of money it's more effort it's more pain than it's worth don't do it there's there's people out there they say you can do that because you can avoid taxes you can't avoid the taxes okay rant over start the LLC in the state where you're doing business that's gonna be the best state for you to do it in that's number one number two so I already mentioned go to your Secretary of State's website do a search for your name make sure the name is not taken if it's not you can go ahead and file what are called or are articles of organization and I think it's named the same thing in all 50 states I'm not sure about that but that's that's what you're gonna file you're gonna fill out this form your articles of organization it's going to give information like the name of the LLC the business address who the agent is make sure you see up here my video on registered agent that needs to be an actual physical address where somebody can accept mail on behalf of your business if you get sued that's where the registered agent does basically there's corporate entities that do that but it means to be a physical address in the state where your LLC is located they're gonna want information such as who the initial members are of the LLC owners of an LLC are called members not shareholders and other information like that and you're gonna take those articles of organization you're going to take them down your Secretary of State's office or potentially you can file this electronically through through the interwebs and you're gonna pay a filing fee it varies in different states and then once they file those your LLC is going to be formed they're gonna send you a little a document back that's gonna tell you that your LLC has been formed then you can the LLC but here's the thing that's not enough people if that's all you're doing to start your LLC there you might as well do nothing because it provides no liability protection to you there's no tax advantages to doing that that you you've basically done nothing to protect yourself which is the whole point of forming LLC hold on a second my wife thinks wanted me when I drink coffee that way anyway if you're getting what I'm saying so far make sure you leave a comment down below and just type something cool you can type something cool that's fine and let me know you get what I'm saying so far so that's number one you got to file those articles of organization but there's another step you need to create and what's called an operating agreement an operating agreement is a document it's a contract between you and you as a member of the LLC and the LLC the basically spells out exactly how the LLC is going to operate what you're gonna pay yourself in terms of a salary or distributions or how those are going to be distributed all those different things where the businesses can be located what you're gonna do if you decide to add new members what you're gonna do if you decide to break up with your the other members how often you're gonna have meetings what's going to be the subs those meetings all these things there's all these things that need to go into this operating agreement and you need to have that done and then you need to follow the next step is you need to actually follow the terms of the operating so that if somebody decides to see you at some point they can't do what's called piercing the corporate veil and by piercing the corporate veil that's how they can do that if you basically don't operate yourself as the LLC according to the terms of your operating agreement so that's important all right the next step is to make sure oh and let me go back if you're in some some states ask you to publish a notification I know I think New York asks you to do this so there might be other requirements in your particular state you want to check those requirements and make sure that you follow the law and the legal requirements in your particular state the next thing you want to make sure you do is remember to to file all the necessary updated paperwork every year and and that may be annual minutes that may be an annual report different things there's usually going to be filing fees associated with with this so you want to make sure you do that on an annual basis to make sure your LLC stays active I've had situations where people have failed to do that and then the LLC becomes inactive and then anything the LLC has done up to that point while it's inactive basically is is void I had a big issue with the client who there it involved a transfer of real estate through the LLC and a deed was passed and money was paid and things like that but the LLC does not shoot we're talking about Oh making sure you do all the annual reporting requirements you need to make sure you do that if you don't do that then you can run into problems and your LLC can be disbanded and as I mentioned I had a client that had a real estate deed and the real estate deed was basically void and that was a big problem because my client had spent several hundred thousand dollars I'm acquiring that piece of property but his deed was no good and then there was a death and that's that's what we do tha

Thanks Arianna your participation is very much appreciated
- Quintin Haliburton

About the author

Quintin Haliburton

I've studied geometric topology at Lindenwood University in St. Charles and I am an expert in entrepreneurship. I usually feel lethargic. My previous job was medical laboratory technician I held this position for 14 years, I love talking about watching documentaries and filmmaking. Huge fan of Kawhi Leonard I practice table tennis and collect coca-cola.

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