Starting a business can be an exciting and rewarding experience. The Los Angeles area is home to hundreds of thousands of small businesses. It is an optimal location to establish a business, as the city is home to numerous resources catered to entrepreneurs. However, one of the key steps to starting a business is deciding on the legal structure that best fits your individual needs. Understanding the different legal structures is paramount to ensuring the longevity and success of any business. In this article, we will discuss the main legal structures available in Los Angeles, including Corporation and Limited Liability Company (LLC).

There are several different legal options available to individuals starting a business in Los Angeles. While certain businesses can be run as a sole proprietorship or partnership, corporations and limited liability companies (LLC) are the most popular forms of organization in the area. It is important to choose the legal structure that best suits the individual’s needs and desires, as each one has its own advantages and disadvantages.


Corporations are separate legal and tax entities from their owners and shareholders. Corporations are the most complex of the four business structures, as they are subject to double taxation and have higher filing fees. However, corporations also offer limited liability protection for their owners and shareholders, meaning they are not personally responsible for the company’s debts and liabilities. Corporations also allow their owners to potentially enjoy certain tax advantages, such as the ability to deduct certain business expenses on their taxes.

In Los Angeles, forming a corporation requires following many steps. It is important to choose a suitable name for the corporation, as this name must be unique and not in use by any other corporation in the state. After the name has been selected, the articles of incorporation must be prepared and filed with the California Secretary of State. Furthermore, the corporation must obtain the required licenses and permits, submit the required reports, and adopt corporate bylaws for its operations.

Limited Liability Company (LLC)

Limited Liability Companies are hybrid entities comprised of the limited liability afforded to corporations and the flexibility of partnerships. Like corporations, LLCs offer their owners the benefit of limited liability protection. LLCs also have less paperwork and regulatory requirements than corporations, making them a popular option among small business owners.

Forming an LLC in Los Angeles is relatively easy and inexpensive. The initial step is to select a unique and suitable name for the business. The name must be distinguishable from any other LLC registered in California. The LLC must file Articles of Organization with the California Secretary of State and register with the State Board of Equalization if it will be engaging in sales transactions. The LLC must also obtain any applicable licenses or permits from the state or local authority and adopt an operating agreement.

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When starting a business in Los Angeles, choosing the right legal structure for your business can make or break its success. We have discussed two popular legal structures in this article; corporations and LLCs. Each of these structures offers its own advantages and disadvantages, and it is important to choose the option that best fits the individual’s needs and desires. If you are considering forming either a corporation or LLC, it is highly recommended that you consult with an experienced attorney who is familiar with the legal requirements in Los Angeles.




Legal Structures