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At Strategy Law, we provide comprehensive legal services to assist entrepreneurs, start-up founders and business owners in establishing the right foundation for success. Our expertise in business law and entity formation ensures that your new venture is structured efficiently and compliant with legal requirements, allowing you to focus on running your business, growth and development.
Starting a New Business: The initial stages of forming a business involve critical decisions that can impact your long-term success. Our services include:
Customized Business Planning: Effective planning is crucial for a new business. Our services include:
Initial Operations: Once your business is established, we provide essential support to help you get started on the right foot:
Ongoing Legal Support: As your business grows, we provide ongoing legal support to ensure continued compliance and operational success:
Our firm combines extensive legal expertise with a client-focused approach to provide personalized and effective legal solutions for your business needs:
Contact us today to learn how we can assist with your business and entity formation needs. Whether you are starting a new venture, dissolving or restructuring an existing business, Strategy Law, LLP is here to provide the legal expertise and support necessary for your success. Contact us at (408) 478-4100 to speak with an attorney about your business formation needs.
A corporation is a legal entity that exists separately from its owners (called shareholders). It can own property, enter into contracts, sue or be sued, and must comply with certain formalities like maintaining bylaws, holding annual meetings, and filing regular reports. One of its key features is limited liability—shareholders are generally not personally responsible for the corporation’s debts or legal obligations.
The main difference is how they are taxed. A C corporation pays corporate income tax, and then shareholders are taxed again on dividends (known as double taxation). An S corporation does not pay income tax at the corporate level; instead, income passes through to shareholders and is taxed only once at the individual level.
Yes. Both S corporations and C corporations are formed by filing Articles of Incorporation with the appropriate state agency. However, to be treated as an S corporation for federal tax purposes, the corporation must also file IRS Form 2553 to elect S corporation status.
No. An S corporation can have no more than 100 shareholders, and all must be U.S. citizens or U.S. residents. Other corporations, LLCs, partnerships, and non-resident aliens are not allowed as shareholders. In contrast, a C corporation can have an unlimited number of shareholders of any type, including foreign and institutional investors.
A C corporation can issue multiple classes of stock, including preferred and common shares with different rights and privileges. An S corporation can only issue one class of stock, though it may have voting and non-voting shares.
A C corporation is generally better for raising capital, especially from venture capital firms and institutional investors. This is because C corporations can issue preferred stock and are not subject to shareholder restrictions, making them more attractive for complex equity arrangements.
A C corporation files IRS Form 1120 to report its income and pay taxes. An S corporation files IRS Form 1120S and provides each shareholder with a Schedule K-1 to report their share of the corporation’s income on their individual tax returns.
Yes. In California, both S corporations and C corporations must pay an annual minimum franchise tax of $800. C corporations are also subject to state income tax rates on net income. S corporations pay a reduced 1.5% state tax on their net income, in addition to shareholders paying personal income tax on their distributive shares.
Yes. In both S corporations and C corporations, owner-employees can pay themselves a reasonable salary for services rendered. These wages are subject to employment taxes. In an S corporation, any additional distributions to shareholder-employees beyond their salary are generally not subject to self-employment tax.
An S corporation is often more tax-efficient for closely held businesses with U.S. owners, due to pass-through taxation and avoidance of double taxation. A C corporation may be better for businesses planning to raise outside capital or offer complex equity structures, but comes with the tradeoff of double taxation on distributed profits.
An LLC is a flexible business structure that combines aspects of a corporation and a partnership. Owners (called members) have limited liability like shareholders in a corporation, but LLCs typically have fewer formalities and can choose how they are taxed. An LLC can be managed either by its members or by designated managers.
An LLP is a type of professional partnership where partners are shielded from personal liability for certain partnership obligations, particularly those arising from the actions of other partners. LLPs are often used by professional service firms (e.g., law firms, accounting firms). In California, LLPs are only available to specific licensed professions – law firm LLPs, accounting firm LLPs, architect LLPs and engineers and land surveyor LLPs.
An agent for service of process (also called a registered agent) is the person or entity designated to receive legal notices, including lawsuits, on behalf of the business. The agent must have a physical address in the state of formation and be available during business hours. Appointing a reliable agent is essential for staying in compliance and avoiding default judgments.
Standard processing times vary, but in California:
We can assist with preparing and filing your documents efficiently, including requesting expedited service if needed.
Yes. We regularly assist clients in forming Delaware corporations and LLCs. Delaware is a popular jurisdiction for businesses due to its:
We can guide you on whether Delaware is the right choice for your business, assist with formation, and ensure compliance with California foreign registration requirements if you’ll be doing business in California.
Yes. Even if not legally required in all situations, having a written operating agreement (for LLCs) or bylaws (for corporations) is critical. These documents:
We can prepare custom governance documents tailored to your business and industry.
Yes. If your business was formed in another state (such as Delaware), but is operating in California, you are likely required to register as a foreign entity with the California Secretary of State. We handle this process, including appointing a California agent for service of process and filing all necessary forms.
Yes. We assist with:
Staying compliant with corporate formalities helps preserve limited liability and avoid penalties.
Forming a corporation or LLC is just the first step. After formation, you should:
We can assist with preparing and filing many of these items.
Yes. Most entities need an Employer Identification Number (EIN) even if they do not have employees. An EIN is required to:
We can help you apply for your EIN with the IRS. Significantly more time is required to obtain an EIN if the company is not affiliated with a US person with a social security number.
Most cities and counties in California require businesses to obtain a local business license (also known as a business tax certificate), even for remote or home-based businesses. Requirements vary by jurisdiction. We can help you determine where and when you need to register and assist with filing.
In California:
This filing updates the state with current information about your business, such as officers, addresses, and agent for service of process. Failure to file can result in penalties and suspension. Penalties can be a minimum of $250.00. When your business has been suspended; it is no longer in good standing and loses its rights, powers, and privileges to do business in California.
To remain in good standing with the state and maintain liability protection:
We offer annual maintenance services to help clients stay current and compliant.
Possibly. You must register with the California Department of Tax and Fee Administration (CDTFA) if your business:
We can help determine your obligations.
You should maintain:
Proper documentation supports your entity’s legal status and is essential in the event of audits, disputes, or future due diligence.
Yes. We assist clients with:
Let us know your goals and we can recommend the most efficient and legally sound approach.
If you have any problems making a payment, please contact us at (408) 478-4100 during business hours or email billing@strategylaw.com
The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship.
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