BUSINESS LAW

Your business structure impacts everything from day-to-day operations, ability to raise capital, how much taxes you pay and how much of your personal assets are at risk. You should choose a business structure that gives you the right balance of legal protections and benefits. As a result, you need to choose your business structure carefully. While you may convert to a different business structure in the future, there may be restrictions based on your location. This could also result in tax consequences and unintended dissolution, among other complications.  We have the expertise to help you weigh your options.

BUSINESS ENTITY FORMATION
Starting a business venture is new and exciting. Not all business owners consider the legal ramifications if a business is not properly classified or if the business is given the wrong entity. Seeking representation of an equipped legal team at the very beginning of this process will protect the business's interests, and can ultimately eliminate costly or lengthy legal issues in the future. We can assist owners in forming limited liability companies (LLCs), limited liability partnerships (LLPs) and other California business entities.

PRINCIPLE TYPES OF ENTITIES

Liability

Control

Tax Effect

Tax Formality

Character

Joint Venture (Tenancy In Common) Unlimited None without co-owner agreement naming agent Individual Ownership for 1031 swaps Deed filing Aggregate, Realty, Mortgage, Lien
General Partnership Unlimited Universal, each Partner is an agent Pass through benefits and losses based on investment Deed filing; fictitious name Entity/Aggregate; Personality UCC, Charging Order
Limited Partnership General Partner Unlimited; Limited Partner Limited General Partner. “Controlling” limited partner. At least 2 partners Pass through benefits and losses, like direct owners. Pass through benefits and losses; depreciate on an “at risk” compliant non-recourse debt. Deed filing. Certificate of Limited Partnership. Certificate of Foreign Limited Partnership Entity, Personality UCC, Charging Order, May be regulated “security” for lack of control.
Limited Liability Company Limited for all members Manager/ Operating Board. May have 1 member Same as LP Same as LP Same as LP
S Corporation Same as LLC Same as LLC (except restrictions on maximum and types of shareholders for trusts, corporations, and partnership). Pass through benefits and losses based on invested capital. Same as LLC Same as LLC (except restricted to only one class of stock)
C Corporation Same as S corporation Same as S corporation Tax at Corporate level and shareholder level. Same as S corporation Same as S corporation, but no restriction on one class.