Business Formation in Los Angeles
MangoBooks sets up California LLCs and corporations and files the S corporation election for new businesses in Los Angeles. Before anything is filed, we compare how the business would be taxed as an LLC, an S corporation or a C corporation, using the owners' expected income and payroll.
We also set out the first-year California payments and filings, so the new company knows what is due and when.
What's Included
- A comparison of entity types for your situation, including the California taxes each one pays.
- Filing Articles of Organization (Form LLC-1) for an LLC, or Articles of Incorporation for a corporation, with the California Secretary of State.
- The initial Statement of Information, which an LLC files within 90 days of registering and every two years after that.
- An employer identification number from the IRS.
- The S corporation election on Form 2553, when it suits the business.
- A first-year calendar of California payments, including the $800 LLC annual tax or the corporate minimum franchise tax.
- EDD employer registration when the business will have employees.
- Setup of the books and payroll, if we will be keeping them.
Who This Is For
- New companies choosing between an LLC and a corporation. See Small Businesses and Their Owners.
- Existing LLCs and sole proprietors considering the S corporation election.
- Rental property owners setting up an LLC to hold a property. See Rental Property Owners.
How It Works
- Consultation. We talk by phone or video about the business, the owners and their plans.
- Engagement letter. We send a written engagement letter that sets out the filings we will make and the fee before work begins.
- Document exchange. You send owner details and the information the state forms require electronically.
- Filing and handoff. We file with the Secretary of State and the IRS, send you the filed documents, and give you the first-year tax calendar.
What to Bring
- The proposed business name and one or two alternatives.
- Each owner's name, address, ownership percentage and taxpayer identification number.
- The business address in California and the agent for service of process.
- Expected income and payroll for the first year, for the entity comparison.
- For an existing business: its current filings and last year's tax return.
The full list is in our New Client Checklist.
Key Dates
- Within 90 days of registering, an LLC files its initial Statement of Information, then every two years. California stock corporations file a Statement of Information every year.
- The 15th day of the fourth month after an LLC files with the Secretary of State is the due date for its first $800 annual tax.
- Two months and 15 days after the start of the tax year is generally the deadline for Form 2553.
- Within 15 days after paying more than $100 in wages in a calendar quarter, a business registers with the EDD as an employer.
Fees
LLC or S corporation setup starts from $950 plus state fees. State filing fees include $70 for LLC Articles of Organization, $100 for Articles of Incorporation of a general stock corporation, and $20 for an LLC Statement of Information.
Factors affecting fees: the type of entity, the number of owners, whether the S corporation election is part of the work, and whether employer registration and payroll setup are included. Fees depend on the scope of work and are set out in a written engagement letter before work begins. See the Fee Guide.
Frequently Asked Questions
What is the difference between an LLC and an S corporation?
An LLC is a legal entity formed by filing Articles of Organization with the California Secretary of State. An S corporation is a federal tax status that a corporation, or an LLC eligible to be taxed as one, elects by filing Form 2553 with the IRS. An eligible LLC that files a timely Form 2553 and meets the IRS requirements is treated as a corporation from the election's effective date without filing a separate Form 8832.
When must the S corporation election be filed?
Form 2553 is generally due no more than two months and 15 days after the beginning of the tax year the election is to take effect.
Does California recognize the federal S election?
Yes. A corporation that elects federal S corporation status and has a California filing requirement is treated as having made the California S election on the same date.
Is there an $800 California tax in the first year?
For an LLC, yes: the $800 annual tax is due by the 15th day of the fourth month after it files with the Secretary of State. Newly incorporated corporations, including S corporations, do not pay the $800 minimum franchise tax in their first taxable year, although an S corporation's first-year income is still taxed at 1.5 percent.
Does a new business need an EIN?
Generally, a business needs an employer identification number to hire employees or to operate as a partnership or corporation. The IRS issues it online at no charge, after the entity is formed with the Secretary of State.
Schedule a Consultation
Call (213) 255-4665 or send us a short message about your situation.
Please do not include Social Security numbers, bank account numbers or tax documents in the form.