San Diego LLC Attorneys

REQUIRED LEGAL STEPS TO FORM AN LLC IN CALIFORNIA

1. Choose a Name for Your LLC

Under California law, an LLC’s name must end with “Limited Liability Company” or the abbreviations “LLC” or “L.L.C.” The words “Limited” and “Company” may be abbreviated to “Ltd.” and “Co.” The LLC’s name may not contain the words “bank,” “trust,” “trustee,” “incorporated,” “inc.,” “corporation,” “corp.,” “insurer,” “insurance company,” or any other words suggesting that it is in the insurance business. In addition, the name you choose must not be:

• the same as, or too similar to, an existing name in the California Secretary of State records, or
• misleading to the public.

MARSHALL LAW  checks for availability by searching the California Secretary of State’s business name dasu_tabase. Note that when this dasu_tabase is searched, names are checked only against those of other LLCs registered with the California Secretary of State.

An available name may be reserved for up to 60 days The form must be  postal mailed or hand delivered to the California Secretary of State’s office. Email and/or online requests for name reservations are not accepted. A $10 fee must be paid to reserve a name.

2. File Articles of Organization with the State

A California LLC is created by filing articles of organization with the California Secretary of State’s office. Complete and file Articles of Organization.    The articles of organization must include the following information: the LLC’s name, its purpose, information on how it will be managed, its address, and the name and address of its registered agent.

Form LLC-1 can be completed and filed online at the California Secretary of State’s website, or postal mailed or hand delivered to the secretary of state’s office. The filing fee is $70.

3. Appoint a Registered Agent

Every California LLC must have an agent for service of process in the state. This is an individual or corporation that agrees to accept legal papers on the LLC’s behalf if it is sued. An LLC may not serve as its own agent for service of process and only one agent can be designated. The agent should agree to accept service of process on behalf of the limited liability company prior to designation.

Individual agents must reside in California and their address must be listed in the LLC’s articles of organization. The agent may be affiliated with the LLC.

MARSHALL LAW provides this service at no extra charge as part of the business formation process.

If you already have a company and you want Daniel Marshall to serve as your agent for service of process there is a one-time fee of $250 which includes filing all the necessary papers with the Secretary of State.  For corporations minutes are required prior to this filing.

4.   File a Statement of Information With the State

Every California and foreign LLC registered in California must file a Statement of Information,wi th the California Secretary of State within 90 days after filing their articles of organization (Form LLC-1). In addition, a Statement of Information must be filed every two years thereafter during the applicable filing period. The filing period is the calendar month during which the original articles of organization (or Application for Registration by a foreign LLC) were filed and the prior five calendar months.

Form LLC-12 is available on the California Secretary of State’s website. It can be completed and filed online or printed from your computer for mail or drop off submission. The filing fee is $20.

The Statement of Information must include:

• the LLC’s name and California Secretary of State file number
• the name and address of the LLC’s agent for service of process
• the street address of the LLC’s principal executive office
• the LLC’s mailing address, if different from the street address of its principal executive office
• the name and complete business or residence addresses of any manager or managers and chief executive officer, if any;  if no manager has been elected or appointed, the name and business or residence address of each member
• a valid email address, if the LLC chooses to receive renewal notices and any other notifications from the secretary of state by electronic mail instead of by United States mail, and
• the general type of business that is the LLC’s principal business activity (for example, manufacturer of aircraft; wholesale liquor distributor, or retail department store).

COUNTY AND CITY REQUIREMENTS

1. File a DBA form with the County Recorder

In order to open a checking account  and to legally operate within the County of San Diego, including incorporated cities therein,  a doing business as form needs to be filed with the County Recorder.   It is the LLC that is doing business as and not the individual after the LLC is formed by the State of California and MARSHALL LAW.

This can be filed the very next day after MARSHALL LAW receives approval of registration from the State.

•   Publication Requirements

The filed DBA  form needs to be published within 30 days of the DBA form  being filed in a County and court approved publication.  These vary greatly in their pricing but the publication that MARSHALL LAW uses is only  ($35).

•   File an Application for City Business License

An The City of San Diego requires a business owned or operated within the City to file a application for a business license that is also entitled a “tax application”  The fees can vary by commercial district but generally run from $00  to $150  as a maximum price.

7. Prepare an Operating Agreement

An LLC operating agreement is not required in California, but is highly advisable.  The fee for this operating agreement is $250 dollars if prepared by MARSHALL LAW.  This is the contract between the members of

the LLC and describes the important duties of the manger(s).  This document can show that the LLC is not

merely a shell or the “alter ego’ of an individual.  However, a two manager or at least two member LLC is preferable to essu_tablish stronger asset protection defenses.

FURTHER STATE REQUIREMENTS

1. Pay Your State Tax Obligations

All LLCs and foreign LLCs must pay California taxes to the California Franchise Tax Board (FTB) if:

• they are organized in California, registered in California, or conduct business in California, and
• they have not elected to be taxed as corporations–that is, they are taxed as partnerships or sole proprietorships (disregarded entities). LLCs taxed as corporations must comply with California’s corporate tax rules.

Annual minimum tax: All LLCs doing business in California must pay an annual minimum franchise tax of $800.

Additional taxes: LLCs with income over certain levels must pay an additional fee based on their total annual income.

Filing procedures: All LLCs must file California Form 568, Limited Liability Company Return of Income, by the 15th day of the 4th month after the close of the LLC’s taxable year. For details and tax forms, see the California Franchise Tax Board website.

2. Comply With Other Tax and Regulatory Requirements

You will need to comply with any other tax and regulatory requirements that apply to your LLC. These may include:

EIN: If your LLC has more than one member, you will need to get an IRS Employer Identification Number (EIN) for it, even if the LLC has no employees. If you form a one-member LLC, you must obtain an EIN for it only if you elect to have it taxed as a corporation instead of a sole proprietorship (disregarded entity). You may obtain an EIN by completing an online application on the IRS website or by filing IRS Form SS-4. There is no filing fee.

MARSHALL LAW provides this service free of charge at the time your Articles are approved by the State.

1.  Special California Rules for Professional Services

Under California law, LLCs cannot be formed to provide professional services. Professional services include any service that requires a professional state license. If you don’t know whether your service requires a state license, see the California Department of Consumer Affairs website. As an alternative to forming an LLC, California professionals may form limited liability partnerships (LLPs). For details, see the California Franchise Tax website.

1. Foreign LLCs Doing Business in California

All LLCs organized outside of California must register with the California Secretary of State to do business in California. To register, you must file , Application to Register a Foreign Limited Liability Company and pay a $70 fee. The LLC must appoint a California agent for service of process and provide a certificate of good standing from the agency where the LLC was originally formed. For details, see the business entities section of the Secretary of State’s website