If you’re thinking about starting a business or already own a small business, you may be wondering whether it is worth it to incorporate and what all that means. Incorporating a business is when you have your business structured in a way that makes it a completely separate business entity. It is common for those with sole proprietorships to eventually incorporate as the business grows or they partner with other people.
Incorporating a business is not a difficult process, but it is one that has to be done properly to ensure that all of the legal requirements and tax burdens are set up correctly. Our law firm can talk with you about your business goals and what you want to accomplish with incorporation and then help you get started.
What Are the Benefits of Forming a Corporation?
One of the main benefits of forming a corporation is that it separates you from the business for liability purposes. This means that if the business is sued, your personal assets can’t be taken as part of any settlement. Forming a corporation can also offer some tax benefits, depending on the specific circumstances and how the business is set up. Corporations are often logical next steps for growing businesses because it is often easier to transfer ownership of these types of structures, and it can open up more capital and investment opportunities.
How Do You Incorporate a Business in California?
There is a specific process that must be followed to incorporate a business in California. The basic steps are:
- Decide on a business name and who will be the registered owners of the business
- Decide on a corporation structure
- Choose a registered agent — this is who handles the paperwork if your company is ever sued
- File articles of incorporation and a statement of information with the California Secretary of State
You will also want to consult with a tax professional to find out what your business tax liabilities will be and how to set up separate financial accounts for your business.
How Can a Business Attorney Help?
Incorporating a business comes with a lot of decisions and the paperwork to document them. An attorney is there to explain everything, provide a legal opinion on those decisions, and ensure that everything is filed correctly.
If you are considering incorporating your business, it’s important to do it the right way. Hiring a California business attorney can ensure that you have someone who is familiar with the state requirements for incorporation and can answer any questions you may have along the way. Call 323-230-6200 to schedule a meeting with a member of our team to find out more.