[...]... Professionals to Help You Incorporate Lawyers can charge up to $2,000 or even more to incorporate your business To allow you to save money and spend it more usefully elsewhere, this book shows you how to fill in standardized incorporation forms As you’ll see, its not hard, and the investment of your time and energy should be modest Beyond this, How to Form Your Own California Corporation is geared to help... if you do form your own corporation, the ultimate responsibility for making the right decisions is yours I/4 HOW TO FORM YOUR OWN CALIFORNIA CORPORATION ICONS USED IN THIS BOOK Throughout this book, these icons alert you to certain information Fast Track We use this icon to let you know when you may skip information that may not be relevant to your situation Warning This icon alerts you to potential... gives investors a preference if dividends are declared or the corporation is sold) to venture capitalists willing to help fund future expansion of your corporation 1 / 18 HOW TO FORM YOUR OWN CALIFORNIA CORPORATION And owners of a small corporation can set their sights someday on making a public offering of shares Even if your corporation never grows large enough to interest a conventional stock underwriting... the corporation s owners The result of this type of business income splitting between the corporation and its owners can result in an overall tax savings for the owners (compared to pass-through taxation of all business profits to the owners, which is the standard tax treatment of sole proprietorships, partnerships and LLCs) 1 / 12 HOW TO FORM YOUR OWN CALIFORNIA CORPORATION Example: Jeff and Sally own. .. a corporation A corporation is also a separate tax entity from its owners In practice, this means you can often use your corporation to shelter business income instead of having to pay personal income taxes on all business profits each year (as you would with a sole proprietorship or partnership, where you and your business are treated as the same person for tax I/2 HOW TO FORM YOUR OWN CALIFORNIA CORPORATION. .. Proprietorship 1/2 2 Partnership 1/4 3 The Limited Liability Company 1/8 4 The Corporation 1/10 B COMPARING BUSINESS ENTITIES AT A GLANCE 1/20 1/2 HOW TO FORM YOUR OWN CALIFORNIA CORPORATION T o help you make sure that forming a California corporation is the best legal and tax approach for your business, this chapter compares the California corporation to. .. tax return 1 / 14 HOW TO FORM YOUR OWN CALIFORNIA CORPORATION U.S corporations that have 75 or fewer shareholders who are U.S citizens or residents can elect federal S corporation tax treatment (by filing IRS Form 2553) Once an S corporation election is made with the IRS, the corporation can make the same election with the California Franchise Tax Board A corporation that files an S corporation tax election... similar legal liability protection by forming a California professional corporation See How to Form a California Professional Corporation, by Anthony Mancuso (Nolo) 1/ 5 1/6 HOW TO FORM YOUR OWN CALIFORNIA CORPORATION A general partnership has the following characteristics: Each Partner Has Personal Liability Like the owner of a sole proprietorship, each partner is personally liable for the debts and taxes... 7 CALIFORNIA CORPORATION If you do decide to incorporate, this book provides the instructions and forms necessary to organize a privately held, profit-making (business) corporation in California You cannot use it to form a California nonprofit or California professional corporation (one set up to practice law, medicine, accounting and other special state-licensed professions) The special types of corporations... working together in a rented warehouse space where they share a kiln used to make blown glass pieces They recently collaborated on the design and production of a batch of hand-blown halogen light fixtures, which immediately become popular with local lighting 1/8 HOW TO FORM YOUR OWN CALIFORNIA CORPORATION vendors Believing that they can streamline the production of these custom pieces, they plan to solicit . trained professional, consult an attorney licensed to practice in your state . How to Form Your Own California Corporation by Attorney Anthony Mancuso 10th California edition TENTH EDITION September. as California Incorporator, a stand-alone software program that produces all the documents you need to make your California corporation legal. Tony is also the author of How to Form Your Own.