Often, selection and formation of a startup can be stressful and confusing. But it is not the end of the process. In order to protect your startup and its status, many steps must be followed to continue to ensure the startup remains in good standing with local and state laws. The experienced California corporate lawyers at Structure Law Group, LLP can help entrepreneurs and businesses, at any stage of the process, protect and maintain their corporate form.
Why It Matters
Formation of a limited liability company (LLC) or incorporation of a startup takes time and money to gain the protections offered by the corporate form. If a business owner fails to maintain the ongoing requirements, the startup’s status may be put in jeopardy, and as a result, can lose the protection offered by the corporate form. Maintenance of a corporation or an LLC is a continual process, requiring completion of steps to be in compliance with all applicable California state and local laws.
If proper procedures are not followed and the protections of the corporate form are lost, each business owner can be exposed to potential personal liability. For example, if your business is sued while its status is expired or not in good standing, it is possible that the plaintiff can pursue both business assets and your personal assets.
What is Required?
The requirements for a business will vary based on whether the business is a corporation or an LLC. Requirements also vary by state and local laws. Be sure to check your local requirements or speak with an experienced California corporate lawyer in your area to ensure you are following all of the applicable requirements. Below are only a few common requirements:
- Annual Reports – California requires that businesses file a report with the state, either every year or every other year, depending on the year the business was registered. In California, these documents are called “Statements of Information”.
- Fees – A business is required to pay a fee at the time of filing the report to renew registration with the state. Be sure to check the amount of the fee each year, as it is subject to change.
- Internal Requirements – These state requirements apply to the internal operation of the business. For example, corporations are required to adhere to certain corporate formalities by doing the following: holding annual director and shareholder meetings, adopting and updating bylaws, and issuing stock and keeping updated records of those stocks. LLCs have less stringent requirements, but it is still recommended that all LLCs maintain good corporate records and updated operating agreements.
California Corporate tax rates
|Corporations other than banks and financials
|Banks and financials
|Alternative Minimum Tax (AMT) rate
|S corporation rate
|S corporation bank and financial rate
Effective January 1, 2015, for taxable years beginning on or after January 1, 2014, California law requires business entities that prepare an original or amended return using tax preparation software to electronically file (e-file) their return to us.
Call a California Corporate Lawyer Today
If you are unsure if you have taken all of the necessary steps to maintain your startup’s status as a corporation or an LLC, reach out to a California corporate lawyer right away. Many of the most common deficiencies can be remedied to restore your status and the accompanying protections. It is suggested to have an experienced corporate lawyer review with you all of the requirements for maintaining your business’ corporate status on an annual basis.
The California corporate lawyers at Structure Law Group, LLP have the experience needed to help guide you through each requirement and ensure that your corporation or LLC is set up for success. Call us at 408-441-7500 or fill out our online contact form today.