Business entity setup: LLC, S corporation, or C corporation
Choosing the right structure affects taxes, liability, and paperwork for years. We compare the options for your numbers, then handle the filings.
Steps we take
- Compare structures. Sole proprietor, LLC, S corporation, or C corporation, with estimated federal and California tax for each.
- Form the entity. Articles filed with the California Secretary of State.
- Get an EIN. Federal employer identification number from the IRS.
- Make tax elections. Form 2553 for S corporation status, when it makes sense.
- Register with California. Employer registration with the EDD if you will have payroll, and a seller's permit if needed.
- Set up books and payroll so the business starts clean.
The California costs to know
California LLCs and corporations pay a minimum $800 franchise or annual tax each year. LLCs with gross receipts of $250,000 or more also owe an LLC fee on a sliding scale, and S corporations pay 1.5% of net income with an $800 minimum. These costs belong in the decision, alongside self-employment tax savings.
When an S corporation election helps
An S corporation can reduce self-employment tax once profits are high enough to cover a reasonable salary plus the added payroll and filing costs. We run the numbers for your business rather than using a rule of thumb.
Common questions
Should my LLC be taxed as an S corporation?
It depends on your profit, the salary you would pay yourself, and the added costs. We calculate the break-even for your numbers.
Can you form an LLC for a rental property?
Yes. We also explain how the LLC is taxed and what it does and does not change about the rental's tax treatment.
How long does entity setup take?
California filings usually take from a few days to a few weeks depending on the filing method.
Talk through your situation, free for 30 minutes.
Call, email, or send a message. We'll tell you plainly whether we're a good fit and what it would cost.