Benefits of using an LLC

A Limited Liability Company (LLC) is a versatile business structure that combines the limited liability protection of a corporation with the tax efficiencies and operational flexibility of a partnership. In California, forming an LLC offers several advantages:

• Limited Liability Protection: Owners (members) are generally not personally responsible for business debts and liabilities.
• Tax Flexibility: An LLC can choose to be taxed as a sole proprietorship, partnership, S-corp, or C-corp, providing flexibility in tax planning.
• Simplicity and Flexibility: Compared to corporations, LLCs have fewer compliance requirements and offer greater flexibility in management and operations.
• Credibility: Forming an LLC can enhance your business’s credibility with customers, suppliers, and potential investors.

Formation and Planning

Start your LLC: Step 1
Please use the LLC Intake Form here to provide some basic information about your business. We can also set up a brief consultation (included in the fixed fee price) to discuss your business plan and the annual requirements of operating a Limited Liability Company (LLC) in the State of California.

Articles of Organization
The Articles of Organization is a document filed with the California Secretary of State to officially create the LLC. This document includes basic information about the LLC, such as its name, address, and the name and address of its registered agent.

Operating Agreement
An Operating Agreement is a legal document outlining the ownership and operating procedures of the LLC. While not required by California law, it is highly recommended as it helps prevent disputes among members and provides a clear management structure.

Employer Identification Number (EIN)
An EIN, also known as a Federal Tax Identification Number, is required for tax purposes and is obtained from the IRS. It is used to identify the LLC for federal tax filings and is necessary to open a business bank account and hire employees.

S-Corp Election
An LLC can elect to be taxed as an S-corporation by filing Form 2553 with the IRS. This election allows the LLC to pass corporate income, losses, deductions, and credits through to its members for federal tax purposes, potentially reducing self-employment taxes.

In a hurry? Download the checklist on your device.

What We Take Care Of:

1. We file the Articles of Organization on your behalf.
2. We draft the Operating Agreement for your business.

What You Need To Do:

1. Review and Sign the Operating Agreement.
2. Take your copy of the Articles of Organization and go to https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online. From there, apply for an EIN for your business using the entity number given by the Secretary of State on your Articles of Organization.
   a. You will need to know:
   i. Name and Address of the responsible person filing (Use business address);
   ii. Social Security number of the responsible person filing.
   b. Once you complete the Application you will immediately receive an electronic letter from the IRS with your LLC’s tax id number (EIN).
3. Take a copy of your Articles of Organization, Operating Agreement, and EIN number and go to a bank to set up a business account for your new business.
4. Apply for any applicable business license for the municipality in which your business is located, if required. If you are in San Diego County you can use the link here to search if your city requires a license and how to apply:
   https://www.sandiegocounty.gov/content/sdc/cosd/businesslicenses.html.
   If you are located in the city of San Diego you can apply for your license, called a Business Tax Certificate using the link here:
   https://pay.sandiego.gov/BTaxApp/Login.aspx.
   You will need to set up an online account prior to completing the application.
5. If you are selling products, whether online or in a physical location, you must apply for a seller’s permit.
   a. If you are located in the State of California you can use the link below:
   https://onlineservices.cdtfa.ca.gov/_/ . You will have to set up an online account prior to completing the application. Once you do so you can use this link to access the application:
   https://www.ca.gov/service/?item=apply-for-sellers-permit.
   b. For information and frequently asked questions regarding the CA sellers permit application please use the link here:
   https://www.cdtfa.ca.gov/taxes-and-fees/faqseller.htm
6. Please consider seeking out a tax professional who can assist you in navigating any tax related issues with your business, especially if you intend to operate within multiple states, to be sure you are in compliance with all your financial operations. Your tax professional can also assist you in filing the IRS form 2553 if you elect to be taxed as an S-Corporation. Please be aware that this form must be filed within 2 months and 15 days from the date of your incorporation if you wish to be taxed as an S-Corp in your first year.
7. Within 90 days of the filing date of your Articles of Incorporation, you are required to file a Statement of Information with the Secretary of State identifying the names and addresses of the managers and/or members as well as any changes to the business address or agent for service of process. You can file this form online using the link here:
   https://bizfileonline.sos.ca.gov/search/business.
   Search for your business and you can click through to find the prompt to file the SOI online. Please also be advised that you are required to file a Statement of
   Information every 2 years from the date of your incorporation, even if no information has changed.
8. Under the new Corporate Transparency Act, you are currently required to file a federally mandated Beneficial Ownership Report unless you fall within a limited exception. Businesses incorporated after January 1, 2024, will have 90 days from the date of incorporation to file the report. To file the report online or to obtain more information please use the link here:
   https://www.fincen.gov/boi.

Please do not hesitate to ask if you need assistance with any of the steps above. We thank you again for your business and we look forward to assisting you with any of your future business needs. Additional services we provide clients include contract drafting and review, trademark filings, lease negotiations, and designing terms and conditions or privacy policies for your website. If you have any additional questions regarding either the formation process above or additional services, please feel free to contact us at (858) 926-5797 or info@tomgallagherlaw.com. We wish you luck on your future business endeavors.

● Note: If operating a website that sells online, make sure to be aware of the ADA regulations for the accessibility of the blind. To avoid being targeted by this influx of new ADA lawsuits, you will need to make sure your website is compliant with the ADA regulations.