If you are forming a new business in San Diego, it’s important to choose the right form of business entity and properly draft your formation documents. Any miscalculation may lead to you being personally responsible if the business is sued.
The Law Offices of Rick Aljabi represents entrepreneurs who form corporations, LLCs, partnerships, limited partnerships, and joint ventures in San Diego. Attorney Rick Aljabi offers a free initial consultation to discuss your needs.
Benefits of Business Incorporation
People choose to incorporate their business for many reasons. Some of these are as follows:
- To shield your personal assets from liability. If your corporation or LLC is sued, only that business entity is at risk. If you operate as a sole proprietorship, your personal assets such as your personal bank accounts are exposed to creditors.
- To gain tax advantages. There are many tax benefits to incorporation. One example is savings gained from paying into the self-employment tax if operating as a sole proprietorship.
- Privacy. Operating a business as a corporation or LLC provides an additional layer or privacy by making it difficult for the public to determine exactly who the individual owners are.
- Perpetual Existence. As a sole proprietor, if you die then your business must be transferred to your heirs in order to continue to operate. In a corporation or LLC, there is no interruption of business upon the death of a shareholder or member of the LLC.
Most people who form a business entity would benefits most from establishing their business as a corporation or an LLC. An LLC offers you fewer formalities and more flexibility than a corporation. For example, if you have several members in an LLC, each member can contribute the same amount or different amounts of initial capital and still receive an equal share of profit distribution. Alternatively, you can have different distributions to each member. For example, one member may contribute less and receive a higher profit sharing percentage in the LLC because he or she operates the day to day activities of the business. By contract, in a corporation, contributions and distributions must be in proportion to each shareholder’s actual capital contribution.
In addition to formation of various business entities, The Law Offices of Rick Aljabi helps clients with operational issues and corporate governance to preserve their limited liability protections.
For More Information About Business Incorporation
To discuss your legal needs with San Diego corporate formation attorney Rick Aljabi, call 619-220-0500 or fill out the contact form on this website. Your initial consultation is free.