A Limited Liability Company (L.L.C.) is fairly new under California law. It can protect your personal assets (bank accounts, securities, autos, real property) from your creditors just like a corporation does, and it may have different personal tax advantages for you. LLC formation establishes a buffer between you and your company's future creditors who would seek to attach or liquidate any asset in order to gain recovery of corporate obligations.

Another argument in favor of a LLC formation is that it provides an exceptionally flexible operating platform for determining ownership as well as paying earnings. Your LLC incorporation functions like a partnership in terms of ownership, where members and managing members own the beneficial interests in the LLC incorporation.

An additional benefit of a LLC relates to simplicity in the area of corporate governance. Unlike other forms of business entities, which require annual meetings and written minutes, your LLC does not carry the statutory burden of meetings and minutes, therefore saving management and member-owners in time and legal expenses.

Another benefit of a LLC relates to taxation benefits. Whereas standard corporations are fully taxable at the state and federal level on corporate earnings, the LLC stands as a legally constructed “pass through” vehicle, where corporate earnings are distributed directly to member-beneficiaries who individually pay tax at the personal level, thereby avoiding double taxation.

To see if a LLC is right for you, consult an experienced Estate Planning attorney at the CC LawGroup. They will be able to fully explain the formation process and all the associated rights, benefits and obligations. They will also be able to help you set up your LLC, and ensure that all paperwork is properly prepared and legally binding.

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