I worked with Andy through the Incubator Program at Chapman and could not have asked for a better Lawyer to meet with. I have a start-up company and really know nothing about legal advice when starting a business. Not only did Andy make me feel comfortable and was easy to talk to but he really pushed me towards the right direction for my company. He was very informative when answering my many questions and explained things in an understanding way. Not only did Andy help with law advice but also introduced me to a client of his that he felt would benefit me. I could not thank him enough and recommend him to anybody seeking law advice!
Choosing a business structure for your company? Two of the most common business entities in Orange County, California are corporations and limited liability companies. You need a good business attorney to help you incorporate your business or form a limited liability company.
But whether you are incorporating your business or forming a limited liability company in California, you also need to consider the requirements that you should comply with when your company has transitioned into an LLC or a corporation. There are various ongoing requirements that corporations and LLCs need to comply with regularly, and failing to do so in a timely manner can have major consequences. Learn more by reading through this page.
Basic Requirements of Businesses in CA
Business 101: Understanding the Types of Requirements
There are two categories for business compliance requirements and these are internal and external. Here are their differences:
1. Internal Requirements
Internal requirements refer to the actions that must be taken within the company. For corporations, the directors and shareholders are responsible for taking action while the members and managers are responsible in limited liability companies. Internal requirements are the most commonly overlooked type of requirements. These requirements must be documented as part of the company records. If there is a need to sell the company or in the event of a lawsuit, these records may need to be presented.
Corporations have the strictest internal requirements in Orange County, California. This includes holding both initial and annual director and shareholder meetings, creating and adhering to a set of bylaws, issuing stock to stockholders, and recording all stock transfers. This strictness in compliance with internal requirements applies to all types of corporations.
Limited liability companies are recommended to maintain an updated operating agreement, issue membership shares, diligently record all membership interest transfers and hold annual meetings of members and of managers.
Many business lawyers in California advise businesses to use a compliance kit to organize their corporate records. In corporations, these records may include bylaws, stock certificates, transfer ledger, a corporate seal, and sample meeting minutes. In an LLC, these may include the operating agreement, membership interest certificates, transfer ledger, the LLC seal, and also sample meeting minutes.
To simplify the internal requirements compliance process, it would be good to have document templates. Your corporate attorney can provide you with the templates for bylaws, operating agreements, and meeting minutes.
What are the Requirements for your Business?
2. External Requirements
External requirements are those that are imposed by the state of California. State compliance requirements include an annual report filing and payment of a corresponding state fee. It is important for all businesses in Orange County, California to comply with external requirements diligently.
Both corporations and limited liability companies in Orange County, California are required to file their annual reports. Annual reports are sometimes called annual statements. These reports are the means by which the state can track corporations and LLCs that were formed in Orange County, California. There is a corresponding fee to be paid when these reports are filed.
You should pay your tax annually to the Franchise Tax Board in the State of California for the privilege of operating as a corporation or a limited liability company in this state. This is one of the external requirements imposed by the state that all corporations and LLCs must comply with.
It is imperative that you keep track of the due dates for the filing of annual reports and for the paying of franchise taxes. Failure to comply within the due dates has corresponding consequences. Because these are ongoing external requirements, all businesses should research thoroughly and be aware of all requirements before they incorporate their business or form an LLC so that they can plan their budget properly.
Lastly, the state of California requires all corporations and limited liability companies to file initial reports and pay the corresponding fees. This should be done within months following business incorporation or LLC formation. For more information on these, you need the assistance of a competent corporate lawyer in Orange County, California.
The Consequences of Non-Compliance
If a corporation or a limited liability company is sued and is shown to have been unable to comply with all corporate or LLC formalities and state requirements, the judge can rule that the company has been acting like a sole proprietorship or general partnership business structure. This results in the piercing of the corporate veil. This means that the liability protection is stripped from them and the individual owner(s) could lose their personal assets in the event that a judgment is made against them.
Before the piercing of the corporate veil, there are other consequences that can also happen on the state level. For instance, if a corporation or a limited liability company does not comply with the state of California’s annual or ongoing requirements, that particular company will no longer be in good standing. There are many consequences of losing good standing. One disadvantage is that it will eventually lead to an administrative dissolution wherein all benefits of being a corporation or a limited liability company are lost. Ask your corporate attorney what the parameters are to maintain good standing for businesses in Orange County, California.
Legal Assistance from a Business Lawyer
Proper Assistance for Business Requirements Compliance
Whether you own a corporation or a limited liability company, you need to comply with both internal and external requirements to avoid unnecessary problems. To make sure you are able to comply with the necessary requirements, it is recommended that you have proper assistance. A competent business lawyer is a perfect advocate for you. Hiring one will protect your company from legal issues later on.
There are many competent business attorneys in California. The attorneys of Gale and Vallance are some of the most trusted corporate lawyers in Orange County, California. They also offer a variety of services including forming a limited liability company and incorporating a business in Orange County, CA. They also offer a corporate records program. For more information about them, contact them at (714) 634-1414 today!
Highly recommended!
Andy Gale & the associates at Gale and Vallance were awesome in setting up the CA Professional Nursing Corp for ARF Admin Solutions. They were very responsive and knowledgeable from the start. Highly recommended!
George
01/01/2023
Business legal services
Gale & Vallance provided excellent business legal services. The firm was professional, prompt and prepared. The entire process of starting a new corporation was easy and affordable. They have my recommendation.
Raj
07/10/2022
Highly Recommend!!!
I met Andrew Gale through a mutual friend several years go. I was so impressed with their business practice that I made it a point to get to know the attorney to expand my own business. Several years later following their advice i am successful with my business endeavors and do not make any decisions unless i consult with them. Not only do they manage my corporations but also literally help 30 of my clients who use their services. Rare gems in the industry. Highly recommend Gale and Vallance.
X
Incorporation Attorney
1820 W Orangewood Ave Ste 104a, Orange, CA, United States
This firm is excellent, efficient, reliable, with great valuable expertise and very thorough. Their dedication to providing great work and service is apparent in their kind, supportive, consistent great communication. Including providing consistent updates on new laws and regulations. Working with them and having them on my team, I have the confidence and reassurance that all services provided will be of great assistance and help to the continued positive growth and success of my corporation business along with the maintenance of keeping in compliance with and within federal state laws and regulations.
Hannah K
27/01/2024
A trusted colleague/friend of mine actually referred me to Andy's firm and I'm really grateful!
He and his team were incredibly prompt, informative, helpful, and patient (with inevitable questions that came there way by a new business owner like myself). With all the specificities it takes to create a business, this team was awesome in communicating with me and assisting me with navigating not only the needs to get the ball rolling but also how to keep it rolling and with tips to help with bank accounts and accounting packages (if I were to want to take those routes).
They were also very neutral in providing all the options possible and when I requested advisement or pros/cons, they were able to share these promptly and in a way that helped me choose what was best for me.
I'm glad to have worked with them and will continue to work with them
Courtnie L.
07/11/2023
I am so grateful for Andy Gale and his firm's help in getting my S Corp established. He has great expertise and I feel more at ease knowing everything was set up properly with their assistance!
X
Incorporation Attorney
1820 W Orangewood Ave Ste 104a, Orange, CA, United States
Andy and his team were a pleasure to work with! As an LMFT opening a private practice, I was nervous and felt like I didn't know what I was doing. Andy did a great job at explaining everything step by step. I got off of our kick-off call feeling confident and ready to take the next step to opening a practice! I decided to go with a corporation for my private practice. Andy and his team are thorough and answered all my questions throughout the process. I was surprised how quickly everything was taken care of. They also sent me emails along the way, giving me updates. I will be using them for my yearly legal needs. 10/10 recommend!
Julie Eyssallenne
12/11/2023
Andy and his team of professionals are amazing to work with. Not only are they extremely knowledgeable and professional, but they are also very friendly and easy to work with. They will always be my go-to. I appreciate Andy and his team!
Z D
12/01/2024
I could not be more pleased, and frankly impressed with the expertise, attention to detail, follow-up and professionalism of the whole office staff. Andrew Gale Esq is extremely knowledgeable of his craft. His overall approach to corporation creation and management took any doubt or apprehension I had about the process.
Thank you so much for everything and I look forward to a long relationship with your legal practice.
Zouhair Kevin Daif, FNP, Nursing P. C.