California Corporation

There are two popular and important corporate entities that all business owners should be familiar with.  The two types are the corporation and the LLC.  The corporation is an interesting entity, because it is flexible in that you can choose wehter to be an S-corporation or a C-corporation.  The C corporation is the default type of corporation that is setup, and this is a stand alone entity for tax purposes.

What is a Standalone Corporation

A stand alone CA corp is a entity, similar to a real person, because the stand alone corporation pays taxes.  This isn't to say that the owner is responsible, this is saying that the corporation is responsible?  Huh?  The corporation obviously isn't alive, but the managers of the corporation are.   So the shareholders are responsible for making the choice of good managers who can arrange for the payment of taxes.  

Oooops, what about double taxation?

The default corporation that is formed in California is called a C corporation.  The C corporation is what we are describing up above as a stand alone entity.  Now, many of you who file for a corporation will want to file for a S corporation.  The S corporation will give you some of the benefits that are afforded to the LLC.  One of the main benefits is that you can avoid double taxation in most cases, as the S corp will be operating as a pass through entity.

Moving on...let's get it filed.

Check out the links on the left and the tabs at the top of the pages to learn more about forming a california corp.


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