Los Angeles’s legal landscape is a complex one. Deciding between incorporating as an Inc or an LLC in the City of Angels requires attention to local and state regulations, along with all the pros and cons of each option. For the busy executive navigating these waters, UpCounsel's network of vetted attorneys are here to provide comprehensive legal advice and support.

When it comes to incorporating in Los Angeles, one of the most popular options is between Incorporating as a C-Corp and an LLC. But what is the best decision for you and your business? Below we’ve provided some of the most pressing questions and answers to help you make the best choice for you and your business.

Should I Incorporate as an LLC or C-Corp in Los Angeles?

The first and foremost question when incorporating in Los Angeles is what type of entity you should form for your company.

Corporations and LLCs each have unique pros and cons. A C-Corp is the most common corporate type of business entity. C-Corps offer a double-layered liability protection, meaning that any creditors, lawsuits, or other claims can only be filed against the corporation and never the owners, officers, or shareholders. LLCs form a pass-through entity, meaning that the taxes of the company will pass-through to the owners of the company. This type of entity is often used by freelancers and those who run small consulting businesses, who otherwise would have to pay double taxes.

At the end of the day, whether your business is better suited as an LLC or a Corp will depend upon your individual goals and circumstances. It’s important to understand key differences between legalese and the implications, and to work with an experienced and knowledgeable attorney in the Los Angeles area to get the best advice for your business.

What are the Tax Implications of an Incorporation in Los Angeles?

Deciding between a C-Corp and an LLC also has tax implications that you should consider. C-Corporations are taxed differently than LLCs, paying their own separate taxes, and are subject to a corporate tax rate, as well as filing a corporate tax return.

LLC’s, on the other hand, are “pass-through” entities, meaning that the taxes of the company will “pass through” to the owners of the company. This is known as taxation at the owner/member level; the LLC itself does not pay taxes. Instead, all the profits and losses of the LLC are reported on the personal tax returns of the owners/members.

Additionally, the State of Los Angeles offers tax incentives and benefits to incentivize startups and businesses that operate in Los Angeles. Researching these can often help you make the best choice when incorporating your business.

What Type of Paperwork is Required When Incorporating in Los Angeles?

The paperwork needed when incorporating an entity in Los Angeles can be complex, but are important to pay attention to. Filing the wrong type of paperwork can lead to issues with your business down the line. The most common paperwork when incorporating in Los Angeles includes:

- Articles of Incorporation: A document filed with the Secretary of State that contains company name and address, the type of entity, and the names of executive officers.

- Employer Identification Number: A unique nine-digit number assigned to your business by the IRS.

- Operating Agreement: This is a document which outlines the company’s structure, such as governance details, voting requirements, and how profits and losses are distributed.

- By-Laws: A set of rules that govern the operations of the business.

It is important to remember that filing the wrong paperwork can result in fines or penalties, and hiring an experienced attorney can help you fill out the right paperwork for your company.

How Long Does it Take to Incorporate in the Los Angeles Area?

The answer to this depends on what documents have been filed and how quickly they are is processed. The average time it takes to incorporate a company in Los Angeles is about two to three weeks. This includes filing the Articles of Incorporation, receiving the Employer Identification Number (EIN), and other paperwork.

What Happens After the Incorporation Documents are Filed in Los Angeles?

Once the documents have been filed and the incorporation process is complete, there is still a lot of work to do. Some of the most important steps in this process include:

- Setting up a corporate bank account.

- Securing licenses and business permits.

- Drawing up contracts and other legal documents.

- Declaring a registered agent.

- Obtaining liability insurance.

- Establishing an accounting system.

- Conducting a business audit.

Each of these processes are important for the success of your business, so it’s critical that you carefully consider your decisions. An experienced attorney can help you weigh the pros and cons of each and develop the best plan for your business.

Concluding perspectives

Incorporating in Los Angeles can be a complex and daunting process. The decision between Incorporating as an LLC or C-Corp will have long-lasting implications for your business. The best advice is to consult a knowledgeable attorney in the area who understands local regulations and can provide comprehensive legal support.