Choose the Right Type of Business Entity!
Choosing the right kind of business entity for your business is one of the most important decisions you can make. The right kind of business entity can protect you from creditors and result in lower taxes. The most common types of business entities are Corporations, Limited Liability Companies, (LLC’s), and Sole Proprietorships.
Create a Corporation
Creating a corporation can protect your assets against creditors that might try to attack or sue you or your business. Generally, in the event of a lawsuit, creditors can only take legal action against the corporation, but not against you personally. A corporation LLC must pay a fee to the State each year in order to remain in operation.
You can create your own Corporation through Irvine Virtual Office for only $460
Create a Limited Liability Company
A Limited Liability Company, (LLC), offers all of the advantages of a corporation, including asset protection and pass-through income taxes, but it also offers additional flexibility when it comes to income and expense allocation between members. An LLC must also pay a fee to the State each year in order to remain in operation.
You can create your own Limited Liability Company through Irvine Virtual Office for only $460
Create a Sole Proprietorship
Creating a sole proprietorship is the quickest, simplest way to create a new business. However, a sole proprietorship offers you no asset protection and no tax advantages. If you’re not concerned about personal liability or law suits, then a sole proprietorship is the easiest way to do business. Any profits are simply reported on your personal tax return.
You can create your own Sole Proprietorship through Irvine Virtual Office for only $99
Agent for service of Process
If you establish a Corporation or a Limited Liability Company you must choose someone to act as your Agent for Service of Process. The Agent for Service of Process is the person who receives formal notices from the State, and acts as the contact person for your business for any formal legal notices.
Irvine Virtual Office can act as your Agent for Service of Process for as little as $250 per year
Protection from Lawsuits:
If your business fails or becomes insolvent, you can declare bankruptcy and terminate your corporation or Limited Liability Company without any personal liability. However, if you operate your business as a Sole Proprietorship, (also known as a DBA or Fictitious Business Name), then you will remain personally liable for all of your business debts and liabilities. Therefore, it is generally considered unwise to operate a business as a sole proprietorship if that business may result in possible business liabilities, accidents or injuries.