California Limited Liability Company (LLC)

A California Limited Liability Company (LLC) is a legal form of business company offering limited liability to its owners.  It is similar to a corporation, and is often  a more flexible form of ownership, especially suitable for smaller companies with a limited number of owners.  Unlike a regular corporation, a limited liability corporations with one member may be treated as a disregarded entity, so the member is often singled-out a a person performing the actions of the LLC. 

A California Limited Liability corporation with multiple members may choose, generally at the time that the new entit applies for a EIN number, to be treated for U.S. federal taxation purposes as a partnership, as a C Corporation, or as an S Corporation. 

California Limited Liability Company combines the best of corporations and partnerships because the Limited Liability Company offers its members protection from individual liability and, like a limited partnership, allows others to become a member only if the other members unanimously agree. 

The California LLC Formation is governed by its regulations called an operating agreement.  Limited Liability Company (LLC) regulations are a hybrid between corporate bylaws and a partnership agreement.  The California Limited Liability Company is further distinguished from the corporation in that it is not generally required to have annual meetings unless otherwise stated in the operating agreement.

• Owners are called members not partners or shareholders
• Number of members are unlimited and may be individuals, corporations, or other LLC's

LLC Advantages

LLC Disadvantages

Pursuant to Section 17375, a domestic limited liability company may not render professional services, as defined in Sections 13401(a) and 13401.3.  If your business is required to be licensed, certified or registered, it is recommended that you contact the appropriate licensing authority before filing in order to determine whether your services are considered professional.

Filing this document shall obligate most California Limited Liability Companies (LLC) to pay an annual minimum tax of $800.00 to the Franchise Tax

Board pursuant to Revenue and Taxation Code section 17941.

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