Q: How do I form an LLC to start a business?
A: To form an LLC, a document is filed with the CA Secretary of State which specifies the name of the company, and some basic details such as whether the LLC will have a manager, what will be the nature of its business, and who will act as agent for service of process. Then, you will need what is called an Operating Agreement, which sets the rules for governing the company by a manager or its members (owners), and sets forth what each member contributes (money and/or property) in return for its share of the company proportional to the contribution of the other members. You should consult an attorney to draft the Operating Agreement, which is not filed with the state but is essential to define the internal relationships of the members and manager. You will also need to have IRS assign a tax ID number (EIN), which, together with the certified articles you filed with the Secretary of State, will be enough to open a bank account. It is advisable that you seek not only an attorney but also an accountant to set up the entity.
A: Well, the first question is SHOULD you operate your business as an LLC ... OR ... a corporation ... and if the LLC sufficiently embraces your ownership, management and exit strategies, then should the LLC be taxed as a "partnership" or taxed as a corporation. The answer will evolve with at least two free initial consultations with at two attorneys of your choice ... by video call or telephone call. The initial consultation will allow you to make the best decision ... and the formation of the legal entity is very straightforward ... albeit, if you have other people involved, you will want either an LLC Operating Agreement [which is your actual starting point] ... or if you elect to operate as a corporation, you will want a shareholder's agreement... so, first engage at least two free initial consultations ... then let me know your thoughts ... thank you.
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