Limited Liability Company (LLC) A limited liability company (LLC) or domestic limited liability company means an entity having one or more members. In other words a limited liability company (LLC) is a new business entity or a legal form of Business Company that provides limited liability to its owners.
Features: owners have limited liability for the entity's debts and obligations, LLC income and losses are normally passed through to the owners as if it were a partnership. An LLC filing eliminates personal legal and financial liability, save taxes, and protects personal assets. LLC is not a corporation or a partnership may be called a limited liability corporation, owners are called members not partners or shareholders number of members are unlimited and may be individuals, corporations, or other LLC's Members Taxed On Share of Company Income (Profits). Taxes Paid on Personal Tax Return
Advantages of LLC Legal entity separate from Individuals Limited liability: the owners (also called as members) of the LLC, are protected from liability for acts and debts of the LLC. Members cannot be held personally liable for debts unless they have signed a personal guarantee. No double Taxation/no corporate income tax: Profits taxed at the member level and not at the LLC level. Single member: Can be set up with just one natural person involved No General Meeting and minutes: No requirement of an annual general meeting for shareholders No loss of Power: No loss of power to a board of directors (although an operating agreement may provide for centralization of management power in a board or similar body). Specific period/Perpetuity: LLC’s can continue for a specific period as agreed or it can be unlimited (Perpetual). Less paper work: Much less administrative paperwork and recordkeeping. Assignment of membership interests: Membership interests of LLCs can be assigned Flexible Profit Distribution: Limited liability companies can select varying forms of distribution of profits. Easier to Raise Capital
Governing Law: Sections 17000-17005 of California Corporation Code. The title also known and cited as the Beverly-Killea Limited Liability Company Act.
Classification of LLC Domestic (California) LLC- Domestic limited liability company means a corporation organized under the laws of California state. Sections.167.3, 17000(t),17001(K), Foreign ( out–of–state or out–of–country) LLC: Foreign limited liability company means either (1) an entity formed under the limited liability company laws of any state other than California, or (2) an entity organized under the laws of any foreign country Sec.17001.(q), Sec.17001. (s)
Requirements for registration of domestic LLC Articles of Organization (LLC-1) Section 17050(a)), along with the filing fee statement of information (Form LLC-12) (Calif. Corporation Code §17060,). Operating Agreement Annual tax payment of $800 to the California Franchise Tax Board (Sec.17050.(d) of corporation code and Section 17941 of the Revenue and Taxation Code)
Requirements for registration of Foreign LLC Certificate of Good Standing from home state or country Application for Registration as a Foreign Limited Liability Company (LLC-5) Statement of Information Operating agreement
Registration of LLC through California business portal 1. search a California Business Portal through Google or directly go to http://www.sos.ca.gov/business/, click on business entity to search for business name. 2. click on business search or directly visit http://www.sos.ca.gov/business/ check availability of name 3. search the name you wish to register/proposed name: if the name searched, is not found, it can be believed that no company exists in such name and you can reserve such name. However, make sure that nothing is similar already registered. 4. to register the name- go to LLC name availability- click on Reserving a Name, then click on name reservation request form or directly visit http://www.sos.ca.gov/business/corp/pdf/naavreservform.pdf 5.Fill up the form by choosing 3 names send the completed form to the Secretary of State (SOS) with a $10 check. Processing time is typically 10 days. It can be mailed with self addressed envelop addressed to to Secretary of State, Name Availability Unit, 1500 11th Street, 3rd Floor, Sacramento, CA 95814. It can also be submitted in person. The name will be reserved for 60 days. 6.After receiving LLC name reservation, visit http://www.sos.ca.gov/business again and click on Forms, Samples & Fees, go to business entities, go to Limited Liability Companies. Download and fill out ‘Articles of Organization (LLC-1)’, (if it is Foreign Limited Liability Company download ‘Application for registration’ Form LLC 5) The completed form along with the applicable fees can be mailed to Secretary of State, Document Filing Support Unit, P.O. Box 944228, Sacramento, CA 94244-2280 or delivered in person to the Sacramento office, 1500 11th Street, 3rd Floor, Sacramento, CA 95814. Statement of information for Domestic and foreign LLC: Filing statement of information for Domestic and foreign LLC is one and same- Statement of Information (Form LLC-12), fill out the form and Completed forms along with the applicable fees can be mailed to Secretary of State, Statement of Information Unit, P.O. Box 944230, Sacramento, CA 94244-2300 or delivered in person to the Sacramento office, 1500 11th Street, Sacramento, CA 95814.