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Incorporating or forming an LLC in California can provide protection for your personal assets, increase your tax planning options, and enhance your prospects for business success. When you incorporate or form an LLC, the business becomes a separate legal entity, distinct from its owners, which means its owners typically are held responsible only for the amount of money personally invested or guaranteed. LLC or corporation provides additional credibility with lenders, potential customers, vendors, and employees, making it easier to obtain funding, goods, and talent. If your principal place of business is in California, you may find it most convenient to incorporate or form your LLC there.
To incorporate, California requires that you file Articles of Incorporation; LLCs must file Articles of Organization. Your business name can’t be deceptively similar to the name of another business operating in the state. While only close corporations need to include a corporate designator, all LLCs must include the phrase Limited Liability or an abbreviation. A corporation must state the number of authorized shares, while an LLC must indicate how it will be managed. Every California LLC and corporation must appoint and maintain an in-state Registered Agent. Be aware: California also requires that each corporation and LLC file an “Initial Report” within 90 days after filing the formation paperwork.
Are you considering forming a company in California. Learn about the requirements for the State of California.