Business Formation Attorney Serving Southern California

There are more than 1.6 million businesses in California. Millions more dream of starting and building their own businesses. If you are one of them, you need to form the right type of entity and create ironclad legal documents throughout the life of your business to help you succeed.

At Martinez Law Office, I have helped clients for more than 40 years realize their dreams of business ownership by putting them on solid legal ground from the start. I work with entrepreneurs in Santa Ana and throughout Southern California. Contact me today for a consultation and let my experience help you.

MOST COMMON ENTITY TYPES

There are five common types of business entities. The one that best suits you depends on the type of business you plan to launch.

1. Limited Liability Company (LLC). LLCs are ideal for sole proprietors and people launching a business with no or few employees. An LLC protects your personal assets from business losses and taxes your business assets and profits as personal income rather than at higher corporate rates.

2. Corporation. Corporations are the most formal entities, requiring that the business file Articles of Incorporation with the California Secretary of State. In a C corporation, profits and losses are absorbed by the corporation and earnings are taxed at corporate rates. Shareholders are taxed on dividends earned. In an S corporation, profits and losses pass to the owners of the corporation and are taxed at a lower rate.

3. Sole Proprietorship. A sole proprietorship requires no organizational filing, although localities might require you to purchase a business license. You operate under your own name or under a “doing business as” name. You personally absorb profits and losses and pay personal income tax on earnings. You have no liability protection which means your personal assets are at risk should you be sued or your business fails.

4. Partnership. Partnerships don’t require filing with the Secretary of State, but the partners should have a legal partnership agreement. The personal assets of partners have no liability protection. Profits are distributed to partners who pay personal income tax on them.

5. Non-Profit Organization. Non-Profit Organizations are dedicated to furthering a cause or advocating a particular point of view. Operating this type of entity requires obtaining a tax-exempt status from the Internal Revenue Service. Although salaries can be paid to individuals working for a non-profit, profits are maintained by the organization to further its work.

STEPS TO TAKE WHEN FORMING
A BUSINESS IN CALIFORNIA

Forming LLCs, corporations, and non-profit organizations in California requires filing certain documents with the Secretary of State. Although a partnership does not, you should have a partnership agreement in place. Names must be researched and reserved, different documents need to be created and filed, and appropriate fees paid to get your business up and running.

ESTABLISHING EMPLOYMENT CONTRACTS

Once you’re ready to launch, you will need certain contracts created to protect your business. You may need non-compete agreements to keep employees from leaving your company for a competitor’s. Partnership agreements are vital to detailing how a partnership operates and how investments, profits, and losses are shared. Non-disclosure agreements prohibit employees and contractors from sharing confidential or proprietary information about your company or clients. Supplier contracts establish details about pricing, delivery, scheduling, and other terms.

I will help you determine what legal agreements you need, draft them, and review contracts others want you to sign.

WHY HIRING LEGAL COUNSEL IS IMPORTANT

There is an abundance of legal document templates available on the internet. But those boilerplate contracts are not specific to your business nor often to the State of California. I can help you not only with forming and conducting business in California, but in all 50 states.

As your business begins entering into agreements with individuals, contractors, suppliers, and other entities, you need an experienced business attorney looking things over to make sure your best interests are represented in those contracts. Not having an attorney can be costly or even devastating to your personal assets.

At Martinez Law Office, I started out as a transactional business attorney 40 years ago, drawing up legal documents that businesses needed to form and operate. I then began litigating contract lawsuits. That means I not only have the expertise to create binding contracts but know how a loophole could be used against you in court.