Forums: Discussions for entrepreneurs and small business.

Hi folks,

Going to be chatting up a lawyer next week, wanted to have a better understanding of a couple issues prior to that.

Background: in CA, doing financial planning and investment mgmt.  I wanted an LLC but the same lawyer was pushing incorporation instead.  In CA, both have to pay an $800 minimum corporation tax when registering.

Questions:

1.  Anyone know if the $800 is waived in the first year?  I'd thought I'd heard that...

2.  Assuming I incorporate and elect an S-Corp, all profits and losses should pass through - so in other years what happens to the $800 minimum corp tax?  Is it still paid, but a credit in the pass-through?  Or a sunk cost?

3.  Not knowing how much I'll earn, especially in the first 3-5 months, how do I handle my salary?  Do I just change it monthly as I know how that month will close?  Or draw a VERY small salary and just give myself large quarterly bonuses (maybe monthly bonuses?)

4.  I'll be the only employee as well as the owner.  Since I'm an employee, do I really have to get, and post, the EEO & other notices to be in compliance with federal law?

5.  Anyone have a realistic idea of the time/dollar/effort impact of Inc. vs. LLC?  Lawyer said it wasn't much bother, but wondering how many extra hours I'll spend worrying/doing the extra incorporated activities per year?

Thanks to all, even if you can only answer one of these. Appreciate your time!

Regards,

Trond Hildahl

 

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