San Diego Business Law Lawyers – California Corporations Code

Business Organization & Formation Attorneys

At the San Diego, California law firm of Wilkinson & Finkbeiner, our attorneys provide a proactive, professional approach to meet your business law needs, stressing long-term planning and goal setting. Our services range from counseling business clients at the outset of their business, through dissolution and exit strategies. Typically, during your free initial consultation with one of our attorneys, the attorney will gather information related to your specific business law needs. Following your free initial consultation, your attorney will research and analyze your information and develop a concise strategy designed to form the appropriate entity, or multi-level entities, to meet your specific requirements. Our business law services include:

• Incorporation / Formation: Selecting the proper entity or entities is crucial to maximizing asset protection and minimizing taxes. Some of these entities are listed and discussed below.
• Purchase / Sale / Transfer / Dissolution of a Business: Our attorneys will provide you with options and strategies associated with the acquisition, transfer or dissolution of a business.
• Financial and Tax Counseling: The Internal Revenue Service (IRS) and the State of California promulgate and assess tax obligations on businesses. These obligations vary by entity. Some entities may utilize a "pass through" tax structure, and some entities are assessed taxation at the organization level as well as the individual (stakeholder) level. Our attorneys provide well-thought counseling regarding tax rules and regulations.
• Contract Review: Our attorneys counsel clients regarding proposed contracts to be used in all facets of business.
• Mediation of Business-Related Disputes: Our experienced attorneys will mediate conflict between business owners, employees, stakeholders, investors, and other interested parties using learned creative problem-solving techniques. Clients utilizing this service immediately realize productivity and profitability as a result of this least intrusive and clever dispute resolution mechanism.

Generally, California and Federal law provide business owners with multiple organization structure possibilities, generally including:

• Sole proprietorship
• Corporation
• Limited Liability Company
• Partnership
• Limited Partnership
• Limited Liability Partnership

Selecting the appropriate organizational structure is an essential ingredient to the success of every business. Depending on each interest partys concerns, such as asset protection, minimization of personal income taxes, or planning for the overall success of the business venture, great considerations must be given to the selection of the business entity. In some cases, a multi-entity structure must be utilized to address the concerns of every interested person.

Sole Proprietorship.

A sole proprietorship allows an individual to own and operate a business by him/herself. A sole proprietor has total control, receives all profits from and is responsible for taxes and liabilities of the business. If a sole proprietorship is formed with a name other than the individual's name, a Fictitious Business Name Statement must be filed with the county where the principal place of business is located. Generally, there are no other formal requirements to own and operate a sole proprietorship. However, depending on the business venture, a particular license or certification may be required.

Corporation.

A corporation is an entity that exists separately from its owners (stakeholders). A corporation may be utilized to provide asset protection for its stakeholders, as well as protection for managers, officers and directors. There are numerous types of corporate entities, including:

• Close Corporation: These corporations must meet the minimum statutory requirements and generally consist of family members as shareholders and operators.
• Subchapter S Corporation: A corporation electing Subchapter S regulation provide limited liability to its shareholders as well as pass through taxation to shareholders (meaning the corporation is not taxed but the corporations shareholders are taxed individually.) In California, there is an annual fee to operate a corporation with a Subchapter S election and shareholders must consider and anticipate the business profitability before electing to be treated under Subchapter S.
• C Corporation: Any corporation that does not elect to be treated under Subchapter S of the Internal Revenue Code is a C Corporation. Our attorneys will explain the benefits and drawbacks of each type of corporation.

Our attorneys will also research and analyze the appropriate state of incorporation for your business. Generally, businesses operating in California will choose to become incorporated in California. However, there may be advantages to incorporating in Delaware or Nevada, and registering the business in California as a foreign corporation.

Limited Liability Company.

A domestic limited liability company generally offers liability protection similar to that of a corporation but is taxed differently. Domestic limited liability companies may be managed and operated by one or more managers, or one or more members. In addition to filing the applicable documents with the Secretary of State, an operating agreement among the members as to the affairs of the limited liability company and the conduct of its business is required. Our attorneys will assist you with drafting an appropriate and clear operating agreement, which has similar effect of corporate bylaws. There is a minimum annual tax in California to operate a Limited Liability Company.

General, Limited, and Limited Liability Partnerships.

A general partnership is required to have two individuals engaged in a business for profit. Generally, there are no formal requirements to establish and operate a general partnership; however, it would be wise to consult a Wilkinson & Finkbeiner attorney before doing so. General partners are jointly and severally liable for all business obligations as well as the conduct of the other partners, and may be required to meet certain local government requirements. An expertly drafted partnership agreement should be the minimum condition for every partner.

Formal requirements are set forth to establish a limited partnership, which must consist of at least one general partner and one limited partner. Limited partners maintain limited liability for business obligations and the conduct of general partners. Many families elect to form a family limited partnership, which provides asset protection and management, easy succession of ownership interests, estate tax advantages, and other benefits.

A limited liability partnership (LLP) is a partnership that engages in the practice of public accountancy, the practice of law or the practice of architecture, or services related to accountancy or law. A limited liability partnership is required to maintain certain levels of insurance as required by law, and must register with the California Secretary of State.

Enlisting the assistance of an experienced, knowledgeable and trustworthy Wilkinson & Finkbeiner attorney is paramount to the success of your business. We will take the time to discover your particular needs and develop a strategic plan to achieve long-term success of your business. Business owners attempting to develop and implement such strategies without the assistance of qualified counsel often find themselves and their business in debt, defending lawsuits, and struggling to avoid dissolution. Our law firm provides a free initial consultation, providing our clients with a no-risk opportunity to benefit from our knowledge and experience.

Our mission as a law firm is to offer high quality, compassionate, professional, and aggressive representation in a cost-effective manner to reach each clients key objectives.

If you have legal questions about estate planning, probate, or family law, contact the attorneys of Wilkinson & Finkbeiner. Our lawyers represent clients in the San Diego County area including the communities of San Diego, North County, East County, and South Bay.