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California Business Formation Questions & Answers
2 Answers | Asked in Business Formation, Business Law and Public Benefits for California on
Q: Can a CA Nonprofit Public Bene Corp use proxies to meet a quorum & to actions? & use unanimous consents in lieu of mtgs?

CA Corp Code 5510 + seem to allow proxies to achieve a quorum and to take actions "if allowed"

5516 allows for unanimous consent "if allowed"

Does this mean if the by-laws permit, both can be so used? Thx

James L. Arrasmith
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answered on Mar 14, 2023

Yes, a California nonprofit public benefit corporation can use proxies to meet a quorum and to take actions if it's allowed in the corporation's bylaws. Similarly, the use of unanimous consent is also allowed if it's permitted by the bylaws.

According to California...
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2 Answers | Asked in Bankruptcy, Contracts, Business Formation and Business Law for California on
Q: Can i be removed from an Eidl loan? Is it possible to transfer liability with a indemnification agreement/ stake sale?

i am member of an llc and i signed a personal guarantee on an Eidl loan. A member wants to take my stake in the company. Will an indemnification agreement between partys be an option?

Is that be an option or would that be voided by the SBA?

James L. Arrasmith
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answered on Mar 10, 2023

Generally, an EIDL loan is a loan that is made directly to a small business, and the loan is based on the creditworthiness of the business, not the individual partners or owners. However, it is possible that the loan agreement includes a personal guarantee, which means that the individual partners... Read more »

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1 Answer | Asked in Business Formation and Business Law for California on
Q: What do I need to form a c-corp in the US when operations are out of a different country (ie Ecuador)?

I'm starting a business where the founders live/work virtually in the US, but money will technically be made in Ecuador. We are a subscription based business for backpackers to book and get discounts in Ecuador (and eventually other countries in South America). So backpackers will buy their... Read more »

James L. Arrasmith
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answered on Mar 6, 2023

To form a C-corp in the US when your operations are based in Ecuador, you will need to follow the incorporation procedures of the state in which you plan to incorporate. Delaware is a popular choice for incorporation due to its favorable corporate laws and tax benefits.

To form a C-corp in...
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1 Answer | Asked in Business Formation and Business Law for California on
Q: Do I need 2 separate business licenses for different products?

I am a sole proprietor offering graphic design services and stationery in CA. Now, I want to start selling handmade jewelry and polished rocks (using a different name for this business) – do I need a separate business license for that? The owner (myself) and business address remain the same for... Read more »

James L. Arrasmith
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answered on Mar 3, 2023

In California, you are not generally required to obtain a separate business license for each different type of product or service that you offer. As a sole proprietor, you can operate multiple businesses under a single business license, as long as the businesses are related and have the same owner... Read more »

1 Answer | Asked in Business Formation and Business Law for California on
Q: Wyoming LLC

As an online seller business owner residing in California, do I have to register LLC in California if I already have LLC in Wyoming for my business? I have no employees, and my wife and I are the owners of the Wyoming LLC for the online business.

James L. Arrasmith
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answered on Feb 20, 2023

If you are doing business in California, then you are required to register your LLC in California as a foreign LLC. Doing business in California generally means that you are selling goods or services within California or have a physical presence in the state, such as an office or a warehouse.... Read more »

1 Answer | Asked in Business Formation, Business Law and Contracts for California on
Q: I just made an LLC in December in California through incfile. I wish to cancel it. Please help!!

I can't afford to $49/monthly fees and I can't afford $119 for statement of information (CA state fee $20 and processing fee $99). Times are tough right now and I just can't afford it. I started an LLC cause i was trying out affiliate marketing thingking it'll be easy can earn... Read more »

James L. Arrasmith
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answered on Feb 19, 2023

To cancel your LLC in California, you will need to follow these steps:

File a Certificate of Cancellation with the California Secretary of State. You can do this online or by mail. The fee for filing the form is $35.

Once the Certificate of Cancellation has been filed, you will need...
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2 Answers | Asked in Business Formation and Business Law for California on
Q: I want to start an online business. DBA, LLC, both, neither?

I will not be selling products. I will offer a service which will pay me a finders fee as compensation. I will be conducting the business from home/online. No employees. Do I need to register a DBA, get a license, LLC? Im in California

Shawn R. Jackson Esq.
Shawn R. Jackson Esq.
answered on Feb 13, 2023

As is often the case, the answer is "it depends" ... upon [1] your exposure to liability ... [2] your management structure ... and the [3] the scope of your services ... the next step would be for you to schedule at least two free initial consultations by video call or telephone call.

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2 Answers | Asked in Business Formation and Business Law for California on
Q: LLC Formation for Real Estate Investment

I need to form an LLC to buy and operate a rental unit. Three members are brining 1/3 investment each. Can there a buy-out clause such that one member can be bought out a year or later when two other members can bring the capital equal to the initial investment of third member plus 6% annual... Read more »

Shawn R. Jackson Esq.
Shawn R. Jackson Esq.
answered on Jan 1, 2023

yes, but with several issues ... management issues, capitalization protocols, any improvements ... and of course, valuation formula ... always best to schedule a few free consultation video calls with at least two law firms to discuss the options and strategies.

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1 Answer | Asked in Business Formation, Business Law and Internet Law for California on
Q: What constitutes as the state in "doing business" for online business filing for a LLC? Owners in separate states too

I've read in some articles that the place to file an LLC is in the state you reside, even for online businesses. As you would need a foreign LLC to do business in the home state anyways if you filed out of state.

But what is the definition of "doing business"? Is it the... Read more »

Louis George Fazzi
Louis George Fazzi
answered on Dec 17, 2022

Lawyers practice law so they can provide advice on questions just like this. Are you asking this question because you are only interested in LLCs, or do you need advice on how to set up an LLC and begin operating a business under one? This forum isn't here just to satisfy someone's... Read more »

1 Answer | Asked in Business Formation for California on
Q: I dissolved a corporation due to non activity with the business in 2021. However now I would like to reinstate it.

Does it make sense to reopen the same s Corp or would it be better to open a new corporation for my business?

I am also ready to hire an attorney to help me with this process (either opening a new one or re opening the old one). So it would be very helpful if this question is answered by... Read more »

Fritz-Howard Raymond Clapp
Fritz-Howard Raymond Clapp
answered on Nov 17, 2022

If the corporation has been formally dissolved and its assets distributed, it cannot simply be "reinstated". But you can file new articles of incorporation with the same name.

1 Answer | Asked in Business Formation for California on
Q: Can I file a CA LLC if I am canadian?
Fritz-Howard Raymond Clapp
Fritz-Howard Raymond Clapp
answered on Nov 4, 2022

Yes. A non-US citizen may be a member and/or manager of a California limited liability company.

2 Answers | Asked in Business Formation, Business Law, Contracts and Employment Law for California on
Q: Can I take my company’s client and start my own business in California

I work for company that takes care of people the person wants to hire me directly can I start my own business and care for that person

Fritz-Howard Raymond Clapp
Fritz-Howard Raymond Clapp
answered on Oct 19, 2022

Some companies have employment agreements that include non-competition provisions which prohibit the employee from soliciting their clients for a period of time after the employee leaves the company. If your company does not have such a provision to which you have agreed, then after you have... Read more »

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2 Answers | Asked in Banking, Business Formation and Business Law for California on
Q: I just started a non-profit LLC company so what are the next steps in legally keeping my company in good standing?

Beginning of this month I filed my articles of incorporation and today the Secretary of State of California approved the articles of incorporation and I am unsure what to do next?

Matthew Morris
Matthew Morris
answered on Sep 24, 2022

Congratulations on starting your nonprofit. You have chosen an unusual path by using the LLC formation method. One of the first things you will likely want to do is to file a "statement of information" with the Secretary of State -- usually within about 90 days from when you filed your... Read more »

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1 Answer | Asked in Real Estate Law, Business Formation, Civil Rights and Legal Malpractice for California on
Q: I am living a gated community and HOA has no meeting and no elections for last 5 years since I moved in.

HOA has 5 board members which appointed by president. No elections at all. Is that legal? I have been asked for the election and no board member answers. Also I found out some board member on the position for 12 years and they use HOA water and HOA Garderner for private land. For such small... Read more »

James R. Dickinson
James R. Dickinson
answered on Sep 22, 2022

There are attorneys who practice HOA law. Speak with one about your situation. [I litigate cases. Anything posted here must not be construed as legal advice, nor as grounds for forming an attorney-client relationship. You should seek an attorney for formal legal advice and representation.]

1 Answer | Asked in Business Formation and Business Law for California on
Q: is neutrogena makeup remover wipes pack of 2 patented?
James R. Dickinson
James R. Dickinson
answered on Sep 22, 2022

Likely so and, if not, the formula is no doubt kept secret. [I litigate cases. Anything posted here must not be construed as legal advice, nor as grounds for forming an attorney-client relationship. You should seek an attorney for formal legal advice and representation.]

2 Answers | Asked in Business Formation for California on
Q: Can I legally use the abbreviation Dr. In my business name if I'm not a Dr.? If not, can I combine it with another word?

Ex: The Tooth Dr.

Or The ToothDr.

James L. Arrasmith
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answered on Sep 20, 2022

No. That would be false or misleading advertising.

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1 Answer | Asked in Contracts, Business Law and Business Formation for California on
Q: I'm starting 1099 consultant biz. Do most consultants charge travel time from my office to their office for auditing?
Neil Pedersen
Neil Pedersen
answered on Sep 6, 2022

The answer you seek will have to come from studying industry standards for the kind of consulting you will be doing. As an IC you have the right to charge whatever you wish, and in many industries, contractors charge for travel to and from worksites.

Good luck to you.

1 Answer | Asked in Banking, Business Formation, Securities Law and Stockbroker Fraud for California on
Q: Can I manage other people's money (money manager or portfolio manager) with only my series 65 license in California?
Steve A. Buchwalter
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Steve A. Buchwalter
answered on Sep 1, 2022

Anyone can allow you to manage their money. There are no requirements for you to do so. Having a business of, or charging for, managing someone else's money can a different story and is more complicated.

1 Answer | Asked in Business Formation, Business Law and Tax Law for California on
Q: Can I register a for profit business at a property owned by non profit religious organization?
Julie King
Julie King
answered on Aug 30, 2022

I'm sorry to say, your question doesn't make sense. Businesses are registered with the state, not registered at a property. Perhaps you can try asking your question again, but give the lawyers more information about what you need. Sorry about that!

1 Answer | Asked in Business Formation for California on
Q: I have a question about naming an S-corp and whether I will need to do a DBA.

I have been operating a small business as a sole proprietor and I'm at the point of needing to form an S-corp. My chosen name is too similar to another name, so the company helping me to complete the filing has asked me to find an alternative. Should I go with something COMPLETELY different,... Read more »

Shawn R. Jackson Esq.
Shawn R. Jackson Esq.
answered on Aug 25, 2022

As you might imagine, the answer is "it depends" ... the first question is ... have you engaged or requested the "name research" and/or achieved the "name reservation" on your first choice for the corporation's name? The second question is how will your name... Read more »

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