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Los Angeles

Entity Formation & Structuring — Los Angeles

Choosing and forming the right business entity in California involves working through state-specific requirements that differ significantly from other jurisdictions. We advise Los Angeles professionals and entrepreneurs on entity selection, handle the formation process through the California Secretary of State, and make sure you stay compliant with the state’s franchise tax and reporting obligations.

What’s Included

  • ◆
    Entity Type Analysis — Comparative analysis of sole proprietorship, LLC, S-Corporation, C-Corporation, and partnership structures under California law.
  • ◆
    California Secretary of State Filing — Articles of organization or incorporation filed with the California Secretary of State.
  • ◆
    Statement of Information — Initial and biennial statement of information filings required by California.
  • ◆
    EIN Acquisition — Federal Employer Identification Number obtained from the IRS.
  • ◆
    Operating Agreement Guidance — Advice on operating agreement provisions affecting tax treatment and member obligations.
  • ◆
    S-Corp Election — Form 2553 preparation when S-Corporation status is beneficial under both federal and California rules.

Entity Formation & Structuring in Los Angeles

California imposes an $800 annual minimum franchise tax on LLCs, S-Corporations, and limited partnerships — due even if the entity has no income. LLCs also pay an additional fee based on total California income that can reach $11,790. These costs must be factored into the entity selection decision.

We evaluate each client’s situation completely. For some LA professionals, the liability protection and tax flexibility of an LLC justifies the annual franchise tax. For others, an S-Corporation election provides self-employment tax savings that outweigh the additional administrative requirements. We model the scenarios and present clear recommendations based on your specific income level, growth trajectory, and risk profile.

Sources & References

IRS Publication 15 (Circular E)Employer’s Tax GuideForm 941Employer’s Quarterly Federal Tax ReturnForm 940Employer’s Annual FUTA Tax ReturnForm W-2Wage and Tax Statement26 USC §3101Rate of FICA Tax26 USC §3301Rate of FUTA TaxIRS Employment Tax CenterIRS Publication 15-AEmployer’s Supplemental Tax GuideIRS Business Structures OverviewIRS LLC OverviewIRS S Corporation OverviewForm 2553S Corporation Election
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