LLP Formation
A limited liability partnership (LLP) in California is governed by state law and must be registered with a state office. To form an LLP, an individual must:
- Name the LLP.
- File a registration.
- Appoint an agent for service of process.
- Prepare a partnership agreement.
- Get an Employee Identification Number (EIN) from the IRS.
- Register to pay taxes.
- Obtain relevant business licenses.
Be aware that the name of a California LLP must contain the words “Registered Limited Liability Partnership” or “Limited Liability Partnership” or one of the abbreviations “L.L.P.,” “LLP,” “R.L.L.P.,” or “RLLP” as the last words or letters of its name.
Registration of an LLP must include:
- the official name of the new LLP;
- the street and mailing address of the LLP’s principal office;
- the name and street address of the LLP’s agent for service of process (registered agent);
- a brief statement of the business in which the partnership engages; and
- a statement that the partnership is registering as a registered limited liability partnership.
Additionally, depending on what kind of business the LLP is and where it is located, business owners may need to obtain local or state business licenses for the LLP, such as licenses related to:
- their profession;
- specific goods or services they’ll sell or provide;
- an assumed or fictitious name for the business; or
- health and safety matters.
Non-Profit Formation
Most nonprofits are 501(c)(3) organizations, which are related to religious, charitable, scientific, literary, or educational purposes and are eligible for federal and state tax exemptions. To create a 501(c)(3) tax-exempt organization, individuals must first form a California nonprofit corporation. Generally, the steps for creating a nonprofit in California are:
- Choose the initial directors for the corporation.
- Choose a name for the California non-profit corporation.
- Prepare and file the nonprofit articles of incorporation.
- Prepare bylaws for your California nonprofit corporation.
- Hold a meeting of your board of directors.
- Set up a corporate records binder.
- File your Form 1023 federal tax exemption application.
- Obtain your California state tax exemptions.
- Other state reporting and registration requirements.
The name for the non-profit corporation cannot be the same as or too similar to an existing corporation name on record with the California Secretary of State. Note that individuals can reserve a name for 60 days by filing a Name Reservation Request Form, which will prevent another corporation from registering the name while the individuals prepare and file their articles.
The articles of incorporation must include basic information including:
- the name of your nonprofit;
- the following statement: "This corporation is a nonprofit public benefit corporation and is not organized for the private gain of any person. It is organized under the Nonprofit Public Benefit Corporation Law for (public or charitable [insert one or both]) purposes";
- the name and street address in California of the corporation's initial agent for service of process;
- the initial street and mailing addresses of the corporation.
Note that to receive tax-exempt status from the IRS and the state, applicants will need to provide:
- a statement of purpose that meets IRS requirements;
- statements that the non-profit will not engage in prohibited political or legislative activity; and
- a dissolution of assets provision dedicating their assets to another 501(c)(3) organization upon dissolution.
Questions About Forming Your Business?
If you seek to form a business in California, whether a corporation, LLP, or non-profit, you will need to take a number of important steps to legalize your business. An experienced attorney can better help you navigate the legal process, including preparing the required application documents, appointing a registered agent, and handling any tax regulations. Attorney Joyce Komanapalli Jones has significant experience working with business owners and can provide you the professional guidance you need to form your business in Costa Mesa, California.
Schedule a free consultation with the Law Offices of Joyce Komanapalli Jones online or at (949) 264-0323 to learn more today.
