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Case Introduction
Service No.O-010
Establish a Company (CA only)
Brief Introduction

There are many forms of entity such as: corporation, Limited Liability Company, limited partnership or general partnership. When you’re first starting up your business, there’s a lot of paperwork to be filed, such as permits, licenses, names, trademarks, etc. There are also different regulations you’re expected to follow depending on the type of business, such as building and health inspections. The daily operation of your business can be complicated. There are a number of different issues related to areas such as employees, purchasing, customer relations, etc


1.         The most common form of business organization, and one which is chartered by a state and given many legal rights as an entity separate from its owners. This form of business is characterized by the limited liability of its owners, the issuance of shares of easily transferable stock, and existence as a going concern. The process of becoming a corporation, call incorporation, gives the company separate legal standing from its owners and protects those owners from being personally liable in the event that the company is sued (a condition known as limited liability). Incorporation also provides companies with a more flexible way to manage their ownership structure. In addition, there are different tax implications for corporations, although these can be both advantageous and disadvantageous. In these respects, corporations differ from sole proprietorships and limited partnerships.

2.         In the eyes of the law, a corporation has many of the same rights and responsibilities as a person. It may buy, sell, and own property; enter into leases and contracts; and bring lawsuits. It pays taxes. It can be prosecuted and punished (often with fines) if it violates the law. The chief advantages are that it can exist indefinitely, beyond the lifetime of any one member or founder, and that it offers its owners the protection of limited personal liability.

3.         A business owned by two or more people who agree on the method of distribution of profits and/or losses and on the extent to which each will be liable for the debts of one another. A partnership permits pass-through of income and losses directly to the owners. In this way, they are taxed at each partner's personal tax rate.

4.         A firm with a single owner, chiefly one who acts as the manager of the business. Business income, expenses, taxes, liability for debts, and contractual obligations are inseparable from the owner's personal finances. Also called sole proprietorship.

5.         The liability of a firm's owners for no more capital than they have invested in the business. Essentially, the legal separation of ownership and liability means that a stockholder can lose no more than he or she has paid for the shares of ownership, regardless of the firm's financial obligations. Limited liability is one of the major advantages of organizing a business as a corporation.


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$2000 for C Corporation/ $1500 for LLC

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