Business Law Attorney In Orange, CA
Attorney Marc L. Weber has spent over four decades practicing law in California. Serving people throughout Orange and other cities in Southern California, he is well-regarded as an extremely knowledgeable and skillful attorney who always prioritizes the needs of his clients. He has provided legal assistance to hundreds of clients in their pursuit of becoming successful business owners. All too often, the complexities of business law that are encountered almost immediately in this pursuit cause entrepreneurs to lose sight of their goals and never fully realize what they are capable of creating. Attorney Weber is acutely aware of this, and he’s made it his mission to help people through the difficulties of forming, developing, and maintaining a business. Read on for an overview of some of the most commonly asked questions about business law in Orange, CA.
What Are The Different Types Of Business Entities In Orange, CA?
There are several types of business entities available in California; the choice of one over the other relies heavily upon the needs and goals of the client, as well as the nature of the business being formed. The following are a few of the most common business structures in Orange, CA:
- California C Corporation
- California S Corporation
- Limited Liability Company (LLC)
- Limited Partnership (LP)
- General Partnership (GP)
- Limited Liability Partnership (LLP)
- Sole Proprietorship
What’s The Difference Between A C Corporation And An S Corporation?
There are two main types of corporations available in Orange, CA: C corporations and S corporations. There is also a great deal of confusion as to how the two differ and which one is better given a particular set of circumstances. In part, this confusion may be because a C corporation can become an S corporation under certain conditions. Every corporation that is initially established in California can be a C corporation without any special action. A C corporation will remain as such unless and until all of the stakeholders are in agreement with the decision to file for status as an S corporation. If this is the case, Form 2553 will be filed with the IRS. There is no time limit on when a C corporation can become an S corporation.
So, what’s the advantage of filing for status as an S corporation in the first place? One of the main driving factors is to obtain special tax treatment in the form of exemption from federal tax (this is referred to as pass-through taxation). Under California law, a 1.5 percent tax is imposed on the net income of the business. The tax consequences of a C versus an S corporation in California are many, and often complex. For this reason, a business law attorney should always be sought prior to filing for status as an S corporation. In addition, there are restrictions imposed on S corporations that are not imposed on C corporations. For example, an S corporation can only have 100 shareholders, whereas a C corporation is allowed more stakeholders than any other type of business entity.
Other differences between C and S corporations involve compensation of owner-employees, employee benefits, capital accumulation, eligible business activities, size, and the date on which the fiscal year ends. For an in-depth explanation of the similarities and differences between S and C corporations, and for help deciding which is best for your business, contact the Law Office of Marc L. Weber in Orange, CA today.
What Types Of Corporate Mergers Can Occur In California?
A merger occurs when two companies join to become one company. In Orange, CA, there are three main types: horizontal, vertical, and concentric.
A horizontal merger occurs between two companies that are in competition with one another, such as two companies that each make and distribute sportswear. When the companies merge to form one company in this way, the customer base of the newly-formed single entity is significantly higher than the customer base of either company individually. In turn, this provides a beneficial cost reduction.
A vertical merger occurs between two companies that operate in the same industry or type of business but in different capacities. For example, a soybean farm might merge with a company that produces soy milk. Once the individual companies join to form one company, that one company carries out both stages of the process (the growing of the soybeans and the making/selling of the soy milk). As a result, supply and demand becomes more calculable and reliable, and greater price stability can be achieved.
A concentric merger occurs between companies that operate in similar industries but are not necessarily associated with one another. For example, companies producing separate technologies might agree to a concentric merger to produce a third product of technology that benefits from the combination of the two separate products of technology. These types of mergers help to widen market bases and strengthen marketing abilities.
For any and all of your questions regarding business law, consult with an experienced business law attorney at the Law Office of Marc L. Weber in Orange, CA.
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