How to Start an LLC in Los Angeles: What You Need to Know
Creating a Business in Los Angeles: How to Form an LLC3 min read
For entrepreneurs looking to establish and grow their business in the City of Angels, one of the first steps they will take is to form an LLC. Los Angeles offers a wide range of opportunities to entrepreneurs from all walks of life, and an LLC is a great way to get a business off the ground. But first, let’s establish what an LLC is and why you should consider forming one in Los Angeles.
An LLC is a limited liability corporation – essentially a business structure in which the owners, or members, have limited personal assets that face liability should the business fail or incur financial losses. Instead, should tragedy strike, the LLC’s assets are at risk, protecting the owners from the repercussions. Put simply, an LLC is a form of business entity that offers legal protection and flexibility when managing one’s business without the oversight of a board of directors or other oversight entity.
The main benefits to forming an LLC in Los Angeles are the limited legal and financial burdens the members are subject to. Additionally, an LLC is an ideal form of business entity for businesses that are just beginning to grow and don’t need the heightened legal and financial obligations of corporations. Furthermore, with LLCs, owners benefit from more lenient taxation than corporations, as the LLC itself is not subject to corporate taxes. Owning an LLC also creates a distinction between personal and business liabilities – protecting the personal assets of its members from legal actions taken against the business.
Overall, an LLC is beneficial to small and medium businesses as it requires only minimal paperwork and structure, and grants flexibility in its governance. It has advantages across the board for entrepreneurs in Los Angeles who need a structure to protect their personal assets while managing their business.
Once you’ve decided that an LLC is the right form of business entity for your business needs, you’ll need to determine the state and locality in which the business will be formed. Since this article focuses on starting an LLC in Los Angeles, you’ll need to register your business with the California Secretary of State. The global online business filing service used to file and manage records for businesses in California is called the Business Filing Portal.
From the Business Filing Portal, you will be able to complete the forms necessary for registering your company as an LLC. This includes appointing a registered agent, forming a plan of organization, filing the Articles of Organization, filing the Statement of Information, and submitting the required fees. Registered agents ensure that the business is available to receive service of process in the event of a lawsuit or other legal action taken against the business. A registered agent is required to be listed on all important documents in the life of the business, such as its formation documents, tax returns, contracts, and other forms.
Once the initial paperwork is completed, you will also need to apply for and obtain the necessary business permits and licenses from the Los Angeles government offices. This can include business permits, health permits, tax payment permits, signage permits, and other necessary permits depending on your type of business and location. Working with an experienced legal counsel can expedite this process and ensure that all of the steps are taken in the most efficient manner.
The forms and procedures must also be followed in order to sustain the LLC – through filing an Annual Tax Return and a Biennial Statement with the California Secretary of State. Both of these documents must be renewed every two years, and the current fee for filing the Biennial Statement is $20.
In summary, forming an LLC in Los Angeles is a straightforward and beneficial process for entrepreneurs looking to establish and grow a business in the City of Angels. It offers many advantages, including limiting personal liability and offering more flexibility than a corporation. Establishing an LLC allows owners additional freedom to establish and manage their business in a manner that best serves their needs and goals. Working with an experienced legal team, such as via UpCounsel, ensures that the LLC is properly formed, registered, and maintained, so the owner can focus on running their business instead of worrying about the paperwork.