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California Business Formation Questions & Answers
2 Answers | Asked in Business Formation and Business Law for California on
Q: Once a corporation has been formed can shares of stock not be issued, and if so who owns the corporation?

Once a corporation is duly incorporated, who owns the corporation if no shares of stock have been issued, and can ownership change simply by issuing the majority of shares to and officer (say CEO) of the corporation without that officer having to pay for them?

Shawn R. Jackson Esq.
Shawn R. Jackson Esq. answered on Sep 13, 2021

Well ... the first thing to do is to review the documents ... articles, bylaws and organizational meeting minutes. Second, email those documents to a business development attorney of your choice to schedule a free initial consultation by video call or telephone call.

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2 Answers | Asked in Business Formation and Business Law for California on
Q: Once a corporation has been formed can shares of stock not be issued, and if so who owns the corporation?

Once a corporation is duly incorporated, who owns the corporation if no shares of stock have been issued, and can ownership change simply by issuing the majority of shares to and officer (say CEO) of the corporation without that officer having to pay for them?

Doug Bend
Doug Bend answered on Sep 17, 2021

You could change the ownership of the corporation by issuing shares to an officer of the corporation. To do so, I recommend that you have a stock purchase agreement, a Board consent authorizing the issuance of the shares and submit a 25102(f) securities filing for the issuance of the shares.

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1 Answer | Asked in Business Formation and Contracts for California on
Q: How can I create a Partnership Agreement for our start up company.

I am creating a Limited liability Partnership Agreement for a start up business. I need help with jurisdiction and whether or not the sum of 500 dollars a month is in line with federal minimum wage laws.In addition to what the value of cash is insofar as the establishment, development and branding... Read more »

Shawn R. Jackson Esq.
Shawn R. Jackson Esq. answered on Aug 9, 2021

As you probably already know, the basis for any successful business is a clear and cogent "agreement" between the founding members or partners. In an LLC or an LLP, such "agreement" would be embraced within an Operating Agreement ... which outlines management responsibilities... Read more »

1 Answer | Asked in Tax Law, Business Formation and Business Law for California on
Q: Hello, I am planning to found my own consulting firm. Should it be a LLC or sole proprietor?

Hello, I am planning to found my own consulting firm. I am helping startups in the US and EU with public policy, grant strategy, fundraising and business partnerships. Should it be a LLC or sole proprietor? Which one will be better for tax-wise?

Shawn R. Jackson Esq.
Shawn R. Jackson Esq. answered on Aug 6, 2021

The answer depends upon three initial focus points: [1] your exposure to liability ... [2] your desired management structure and [3] how you would like to see ownership and succession. The next step for you would be to schedule at least two free initial calls with attorneys of your choice ... by... Read more »

1 Answer | Asked in Business Formation, Civil Litigation, Contracts and Consumer Law for California on
Q: Can a person who sells her auctioneer services conduct business and hold auctions if the company isn't bonded by the sos

If she cannot legally provide or sell her services to another because she isn't properly bonded, then wouldn't any auctions she's held be illegal to do and void any contracts between her and the buyers of said illegal (fraudulent) auctions?

Leon Bayer
Leon Bayer answered on Jul 30, 2021

This sounds like a matter of government regulation. That would be between her and state licensing agency. She will likely face a fine. It should not affect the validity of the auction sales.

1 Answer | Asked in Business Formation and Business Law for California on
Q: At what point must I have a business license?

I am a website designer normally employed full time but since Covid I have been considering starting my own business. I would offers website design, graphic design, logo design and creation, marketing and social media management as well as ongoing site maintenance and management. Before I fully... Read more »

Julie King
Julie King answered on Jul 12, 2021

Once you market yourself to the world, you are in business and should have a business license. Check the websites of your city and your county to learn the requirements that apply to your jurisdiction. If you are working out of your home, your city and/or county may require a home-based business... Read more »

3 Answers | Asked in Business Formation, Business Law and Tax Law for California on
Q: Do I have to pay the CA franchise and file annual income tax for a newly formed single member LLC with no income?

Hello

I created a new LLC last July and I'm the only member.

So far the LLC has not been operative and has generated no revenue.

Do I need to file an income Tax return or pay the $800 California Franchisee tax?

Thank you.

Julie King
Julie King answered on May 17, 2021

Unfortunately , yes, you have to pay that franchise tax regardless of whether your LLC is active or inactive. So long as the LLC is in existence, you must pay the annual tax. Some people make the mistake of only paying the tax when they earn an income, which causes the LLC to go into "FTB... Read more »

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1 Answer | Asked in Business Formation, Business Law and Copyright for California on
Q: How do I get my name secured on all social platforms when I own the main domain for the name and do business as it?

I would like to get my own name as a social media account on the 2 remaining platforms where someone has created ghost accounts to hold the name and I am unable to clame it for myself.

Marcos Garciaacosta
Marcos Garciaacosta answered on May 7, 2021

Unfortunately it is a first come first served basis so you may be out of luck.

Consult with an attorney to see if you have some options.

Maybe if you have a trademark registration you could use it to get some of the names back, but may not be an easy or cheap proposition.

1 Answer | Asked in Business Formation and Business Law for California on
Q: What is the appropriate business structure in California that can provide PT, OT, ST services?
Julie King
Julie King answered on May 6, 2021

It likely needs to be a professional corporation, but it can still be taxed as either a C corporation or an S corporation.

4 Answers | Asked in Legal Malpractice, Employment Law, Business Formation and Business Law for California on
Q: Hired as an independent contractor, but now owner claims that I was a partner after trying to receive payment. Legal?

I was hired by company to run Tournament events. The company wants to contract me to run tournamemt events. With work product created, I provided the company with this service. After creating an FBN and EIN for the sole purpose of getting paid for services I provided, I asked for payment by giving... Read more »

William John Light
William John Light answered on Apr 25, 2021

You are free to sue for your fees as an independent contractor, if that is what you were. Even as an independent contractor, if you created intellectual property during the course of those duties, that property would likely belong to the person who contracted with you to create it.

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1 Answer | Asked in Consumer Law, Business Formation and Business Law for California on
Q: I cashed my stimulas check at Marin Check Cashing in San Rafael CA. They charged me $43.81 fee. IS this legal in CA?
Daniel Timothy LeBel
Daniel Timothy LeBel answered on Apr 24, 2021

The answer, as with most questions asked of lawyers online, is: "it depends" and "message boards are no substitute for legal advice." Here, there just aren't enough facts to provide a complete legal analysis. However, if your check was the standard $1,400 stimulus... Read more »

2 Answers | Asked in Contracts, Business Formation and Business Law for California on
Q: How to obtain a brick-and-mortar physical address in California?

We need a brick-and-mortar address for a business set up by us in the US (there might be more businesses in the future), whose CEO is working from home (currently in Ohio but soon to be in California).

For the new company, we tried already tried to register But the Secretary of State’s... Read more »

Julie King
Julie King answered on Apr 20, 2021

You may be making this more complicated than it needs to be. Why can't you use your home address? Yes, it will be a public record, but it works. There are many solutions to this issue without you having to lease expensive office space that you will not be using. Best wishes!

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1 Answer | Asked in Business Formation, Business Law and Tax Law for California on
Q: I have a vending machine business, can I have freelancers?

I know there some ab 5 law now but I want to hire freelancers to stock my machines. I will purchase the food products for the machines. They will stock the machines once or twice a week. Meaning 1- 2 hours a week. I am giving them a set payment amount for each month they help me. Do I have to... Read more »

Julie King
Julie King answered on Mar 21, 2021

The chances are very high that those workers would be classified as employees. In today’s world, it is harder than ever to successfully classify a worker as an independent contractor. But a lawyer would need to ask a lot of questions before giving an opinion. For example, will the workers have... Read more »

2 Answers | Asked in Business Formation and Business Law for California on
Q: What is the best way legally to file a foreign corp from Colorado to California and also could I later move to CA?

I purchased 2 shelf corps that are llc's and wanted to dba in california. I wanted to also ask is it legally better to have multiple companies under 1 llc or should they legally be divided?

Julie King
Julie King answered on Mar 9, 2021

This is a tough question to answer without more information. Many companies divide up their product lines into separate corporations so if one product has a liability issue, the revenue from the other products is not affected. But, the other side of the coin is that you have to pay a minimum of... Read more »

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2 Answers | Asked in Consumer Law, Contracts, Business Formation and Business Law for California on
Q: Is it legal for a company to charge me for not being enrolled in autopay? I'm being charged 7.50 a month, seems illegal.

The company is Sunrun and based out of Denver Co, I am in the state of Ca.

Peter N. Munsing
Peter N. Munsing answered on Feb 26, 2021

Companies can give a preferential rate if someone signs up with autopay. Are you being billed extra because you are not or did you just choose the non-autopay option?

Depending on the industry, file a complaint with whoever regulates that industry.

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1 Answer | Asked in Business Formation, Business Law, Tax Law and Trademark for California on
Q: i have my own business and i went as far as paying for my trademark do i have to pay taxes on my business still?

i have not have my wedsited just yet or business cards, i havent even hired no one and i just want to know if i have to files for the business and even if i got my ein number

Julie King
Julie King answered on Feb 21, 2021

If you are taking about income taxes, the answer will depend on whether you have any income. However, you must remember that there are MANY kinds of taxes. If your business is incorporated or a limited liability company, you must pay the minimum of $800 per year franchise tax. I assume you have a... Read more »

2 Answers | Asked in Business Formation, Business Law and Construction Law for California on
Q: Would forming an LLC or Corporation be better for a person who wants to start their own General Contracting Company?

I want to become a first time business owner and was wondering which would suite me the best in terms of taxes, protection, and future costs? I am planning to elect to file taxes under S-Corp subsection for either of these business entities that I am willing to go with.

Shawn R. Jackson Esq.
Shawn R. Jackson Esq. answered on Feb 22, 2021

The answer to your question should be developed in an initial free consultation by video call or telephone call. The short answer is ... it depends" ... upon your preferred management structure, the operations plan, your succession plan ... and how well you get along with others ...

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3 Answers | Asked in Banking, Business Formation, Business Law and Gov & Administrative Law for California on
Q: Regarding EIDL loan

I receive an email today from SBA.gov and they asked me for the following information.

Why would they ask me for this information now when I already got approved?

They are also asking me "A statement that the LLC held a meeting and specify the date" I don't hold... Read more »

Shawn R. Jackson Esq.
Shawn R. Jackson Esq. answered on Feb 19, 2021

The short answer is that to qualify for the EIDL money, you would need to have had a meeting to authorize the LLC taking on that financial responsibility.

I would recommend that we schedule a free initial consultation to discuss additional requisite facts … and how to best move forward.

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1 Answer | Asked in Business Formation for California on
Q: I am want to create a business and register the name, but the name already exists and it's also registered.
Maurice Mandel II
Maurice Mandel II answered on Feb 6, 2021

Then you probably cannot use that name without licensing it from the owner. Contact an intellectual property attorney in your area.

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1 Answer | Asked in Consumer Law, Copyright, Business Formation and Trademark for California on
Q: What are the limits of using 'Established by ' in company logo? Does it have to mean when the business was established?

I'd like to create a business logo that has 'Est. 2000', but that's not when the business was created; rather, it's when my child was born. Is that false advertising?

Maurice Mandel II
Maurice Mandel II answered on Jan 26, 2021

A good guideline would be: if you think it is false advertising, it probably is not a good idea. It would be false advertising to say you were in business for 21 years if you were not. Probably not a big deal if you were in business for 19 years, but if it was only 2, it could become an issue.... Read more »

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