If anyone has questions about different business structures, please ask away here! We're happy to answer any questions about the general pros and cons of each, and can provide resources and information about specific rules and requirements for different business entity types in any state.
Sarah Lawlor
Sr. Business Analyst, Intuit MyCorporation
http://mycorporation.intuit.com/
Hello,
My love for animals especially dogs has turned in to a remarkable company. I would like some direction on how I form the right business. I am the sole owner, I ocassionally contract help and im' located in california, Thanks for your assistance in advance.
Hi PetArchitect,
Thanks for your question.
There are several options for businesses, and what's best for you depends on your specific circumstances, of course, but here are some general descriptions of different options for a business such as yours located in California.
1. Sole proprietor -- In this case, if you're conducting business under a different name than your own legal name, CA law requires the filing of a Ficitious Business Name (aka, FBN, DBA) in any county from which business is conducted. In addition, there may be licensing requirements based on the type of business you're conducting. In general, as a sole proprietorship, there is no liability protection on personal assets (so, for example, if the company goes under, or the company is sued, the owner's personal assets - like house and other personal property - are fair game). Taxes are reported and paid on the owner's individual returns at the normal individual income tax rate. On the plus side, there are few formalities required compared to corps and LLCs and other more formal structures.
2. Corporations or LLCs: Single-owner businesses can also form as corporations or LLCs (limited liability company). Both of these business structures offer "limited liability" -- a degree of protection on owners' personal assets -- which sole proprietorship does not have. Corporations and LLCs are formed at the state level. In California, either of these entity types must pay a minimum annual franchise tax of $800.00 after the first year of existence as a corp/llc. With regard to income tax: For corporations, company income is reported and paid separately from the owners' individual returns (unless it's an "S Corporation"). S Corporations and LLCs report and pay company income tax on owners individual returns (aka, they're pass-through" tax entities). Corporations and LLCs -- moreso corporations -- have more formal requirements as far as record keeping (for example, corporations must draft internal bylaws and have to hold certain meetings annually). In California, both corps and LLCs are required to file an annual Statement of Information with the state, with a small filing fee ($20-$25).
Some sole proprietors who hire contract employees choose to form LLCs, since as an LLC they have a certain amount of liability protection wihtout having to observe as many formalities as a corporation.
Here are a couple of free resources / comparison tools we offer, where you can do further research on the different entity types:
http://mycorporation.intuit.com/help_me_choose/index.js...
http://mycorporation.intuit.com/business-formations/incorporate.jspview=compar...
Maybe if you would like to provide a little bit more dtailed information about your business, or if you have any more specific questions, we in this community can provide some additional insight and/or information.
In any case, best of luck with your business, and thanks for taking care of animals :)
--Sarah
Sarah Lawlor
Sr. Business Analyst, Intuit MyCorporation
I have an LLC for my company called nashville learning center. I also own 2 residental lease properties, I have a DBA under my LLC called TommyRocco investments. How do I list my properties under my DBA so they are protected?
