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SpinDistribute.com Article Directory

The following article was published in our article directory on August 24, 2012.
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Important Considerations for California LLC

Article Category: Business

Author Name: John Pena

It definitely takes a lot of effort to go through the process of setting up California LLC. As a matter of fact, assistance will definitely come in handy at this point. But even before you finally decide to proceed with it, here are some pointers worth pondering upon about the matter of California incorporation.

First and foremost, consider whether you really need to proceed with the process. If you are conducting transactions in California however, it really is compulsory. Consider this as well: once you have successfully gone through California incorporation, you are required to pay a minimum of $800 yearly on franchise tax to the state.

It does not even matter whether the company is active or inactive. This is an obligation you have to cover for. Moreover, you should also expect to be charged 8.84 percent worth of tax based on the net income of your company.

To formalize the existence of your business, articles of incorporation have to be properly filed with the California Secretary of State. The articles should include the following information: the purpose of building the company, name and place of residency of the business itself as well as the individuals who participated in filing the articles. Aside from the articles of incorporation, a statement of information also has to be submitted to the same office. Company bylaws are also a requirement. This document shall contain the rules and regulations of the business.

Although the process of filing for California LLC may appear to be somewhat complex, a lot of business owners prefer this set up. This is because they are bound to enjoy several benefits for incorporating in the state of California. For one, a company becomes able to issue stocks and this can be used as a method of growing the company's capital. Moreover, California incorporation is allowed to issue several classes of stocks. In which case, a company's ability to raise money is further strengthened.

The corporation in California is also regarded as one with an unlimited life. What it means is that the corporation can continue to exist and operate even after the original shareholders are gone. Transfer of ownership also becomes much simpler as it can be passed on without restriction of law from one shareholder to another. These are among the reasons why a lot of company owners prefer the set up as proposed by incorporation in the state of California.

There are important considerations however that you need to take note of including the required formalities. A company incorporated in the state is required to hold at least one meeting session in a given year. The agenda and minutes of the meeting have to be properly documented and submitted to the California Secretary of State. Moreover, financial statements have to be filed in the same office too.

It is important that you note these formalities required of California incorporation. Otherwise, this can result to fines and penalties. Furthermore, failure to comply may cause you to lose your California LLC status.

Keywords: california llc, california incorporation

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