5 Things to Consider When Incorporating a Business in Los Angeles
Starting a Business in L.A.: Complicated for Entrepeneurs without Law Degree3 min read
When it comes to creating your own successful business, it can be a complicated process for entrepreneurs in Los Angeles, especially if you don't have legal experience or a law degree. Incorporating your business requires you to consider several factors such as choosing the right legal structure, understanding the tax considerations, filing with the SEC for securities offerings, and compliance with other business regulations. Whether you're starting a traditional brick-and-mortar shop, an online business, or a service-based venture, it's essential to take into account the local regulations when filing for incorporation in Los Angeles. Here, we provide an overview of the key factors to consider when incorporating a business in Los Angeles and the services that can offer valuable support.
1. Choosing the Right Legal Entity
The first step of the incorporation process is to decide which legal structure you'd like for your business. The most common choice in California, and the entire United States for that matter, is a Limited Liability Company (LLC). An LLC is the most suitable type of legal structure for most businesses as it provides limited liability protection to owners and can also be used as an alternative to corporations and partnerships. Forms must be filed with the Secretary of State in order for the LLC to be legally formed.
2. Establishing a Business Name
The second step of the incorporation process is to give a legal name to the business. In order for a company name to be registered, it must achieve two objectives: follow the guidelines established by the state and differentiate itself from existing business entities. Before selecting a business name, the business owner should research the potential name to see if it is already used or similar to another business' name. The name should include an indicator such as “LLC” or “Incorporated” or an abbreviation such as “Inc.”
3. Appointing a Registered Agent
In California, a legal representative who is responsible for submitting and receiving legal notices and other documents related to the company must be appointed. This person or business is known as a “Registered Agent.” While you can act as your own Registered Agent, the job can become tedious when you begin to receive a large number of documents. It is recommended to outsource this role by letting a professional company provide a registered agent service.
4. Working with a Lawyer for Tax and Regulatory Requirements
It is essential to consult with an experienced lawyer regarding the incorporation process in order to ensure that all applicable tax laws and regulations are followed. This is especially important for businesses that are looking to raise capital or offer securities. Furthermore, the lawyer can assist in the preparation of necessary paperwork, such as Articles of Incorporation and Operating Agreement. These documents are legally binding and must be accomplished according to the State of California and any relevant local regulations in Los Angeles.
5. Utilizing the Services of UpCounsel
For businesses in Los Angeles looking for legal services on a budget, UpCounsel is an ideal resource. Whether you need advice on starting your business or ongoing legal help for compliance issues, UpCounsel offers access to experienced lawyers with an average of 14 years of experience in small businesses and Fortune 500 companies. On top of having the necessary credentials, the online attorneys have clients reviews and ratings that you can use to determine the right fit for your business.
Final thoughts
Incorporating a business in Los Angeles requires you to take various factors into consideration, such as the legal entity, business name, appointing a registered agent, complying with taxation and regulatory requirements, and accessing the services of an experienced lawyer. Establishing a successful business is a complicated process, but understanding the key points of the incorporation process can help you make informed decisions and create a successful foundation for your business.
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