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Business Entity Comparison, C-Corp vs. S-Corp
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FORM A California Limited Liability Company,
C-Corporation OR S-CORPORATIOn

There are many reasons to form a California LLC or Corporation.

Most business owners’ primary reason to form a business is to safeguard their personal assets by separating them from their business liabilities.  When a corporation or LLC is properly formed and maintained, the business owner creates a shield from lawsuits that could otherwise adversely affect their personal assets such as their home, savings or even their car.  

While asset protection is the cornerstone reason for most business owners, there are numerous advantages to forming a California LLC or Corporation.

LLCs and Corporations provide these advantages

Increased Personal Privacy
Tax Planning
Business Flexibility
Raising Business Capital
Continuity of the life of the business entity

LLCs provide additional advantages such as:

No Federal Income Tax on an LLC
Flexibility of allocating income and tax deductions among members
Members can have management responsibility
Minimal limitations on shareholder qualifications
Multiple ownership levels are possible

It is important to note that when forming a California LLC or Corporation, the California Franchise Tax Board will require a minimum annual franchise tax of $800. Additionally, a Business License or Health Certificate may be required depending on the type of business and the location. It is always a good idea to consult with the local tax authority when starting a business in California.

Those business owners looking for an increased level of asset protection, tax options and privacy protection may want to consider forming their business in either Nevada or Delaware and qualifying their business in California.

Nevada and Delaware are known as the states with the most business friendly legal environment. For further information on forming a corporation or LLC in Delaware or Nevada, call CenterPoint Corporate Services at 877-901-5800 and ask to speak with a client representative.

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