A limited liability company (LLC) is a relatively new form of legal entity. In California, they became authorized in 1994. There are several advantages to doing business as an LLC. They are very flexible. Corporations on the other hand are much more rigid in the sharing of profits and losses and can require substantially more documentation to maintain the legal advantages of the corporation. Also, LLC’s are very easy to form in California. The choice of the legal entity formed to run a business is crucial. There are many legal alternatives for setting up a business which include sole proprietorships, partnerships, corporations, LLCs, etc. For hundreds of years, the corporation has been the main type of entity in the raising of substantial capital to operate a business. However, for decades the use of a corporation has become more common for small businesses as well.

Similar to a corporation, an LLC can be taxed as a partnership or as a corporation. If the choice is to be taxed as a partnership, the income passes through to the owners of the LLC (called members). Otherwise, the LLC will be taxed on its income as a legal entity.

If you presently have a LLC, we can guide you in maintaining the necessary records for a such an entity. If you decide with the assistance of an attorney and us as your CPA that it is in your interest to have a LLC, we can help you set up the accounting systems for the LLC and any transferring of present systems.