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FAQs

Below is the list of frequently asked questions.

To Accept Service of Process (“A lawsuit”).

Yes, our opinion is that IN MOST CASES an LLC is better than a corporation.   We think the benefits of an LLC vs a corporation include the following:

  • The paperwork for an LLC is simpler than that of a corporation. This is not much of a factor in most cases, unless the company gets sued.  Then, it matters a lot!  Although in theory both an LLC and a corporation give the same liability protection, in the real world lawyers assume that the average person hasn’t kept a corporation’s paperwork current, or has violated other rules governing corporations.  So the lawyers assume they can “pierce the corporate veil,” which would void the corporation’s liability protection.  But because the LLC paperwork is very simple, in most cases a lawyer will assume there’s no chance of piercing the LLC’s corporate veil.  That will help the LLC avoid or at least settle lawsuits.
  • If an LLC loses a lawsuit, the winner will normally get a “charging order” against the LLC. A charging order allows the winner to collect its booty from the LLC’s income before any income is distributed to the members, BUT the winner can’t force the LLC to actually distribute its income.  Therefore, the LLC can retain its money without paying anything towards the charging order for as long as the LLC wants.  To compound the winners’ problems, the income taxes must still be paid on the LLC’s profits by those to whom it is owed, so the winner of the lawsuit will have to pay taxes on the LLC’s profits even though he/she didn’t get the money.  After a few years of paying those taxes, most winners are likely to settle or just drop their charging order.
  • There is no “double taxation” on an LLC. A corporation has to pay taxes on its income, and thereafter may pay dividends to the shareholders.  Then, the shareholders also have to pay taxes on the dividends they received, since the dividends are income to the shareholders.  On the other hand, for tax purposes, an LLC is normally treated as a partnership.  That means the LLC won’t pay any income tax, although the members of the LLC will still have to pay taxes on the income the LLC earns.
  • Presently, corporations don’t get any tax break for long-term capital gains, whereas individual members of an LLC may still get a tax discount for long-term gains of the LLC.

Both corporations and LLCs offer (1) tax benefits, (2) protection from lawsuits, and (3) protection from debts.

(1)  Tax Benefits.  Many things that aren’t deductible on your individual income tax return are deductible to an LLC or corporation:  Medical expenses (not limited as they are on personal tax returns), vehicle expenses, education assistance, business travel expenses, company parties, gifts to employees of nominal value, perks to employees, life insurance up to $50,000, home office deductions, etc.

(2)  Protection from Lawsuits:  When a corporation or LLC gets sued, the personal assets of the owners and officers (such as home, cars, personal belongings) aren’t normally at risk.  For example, if a customer sues your company for discrimination or negligence on the part of an employee, the owners normally won’t lose their private homes, cars, etc.  Such a loss is much more likely for a sole proprietor or a partnership.

(3)  Protection from Debts:  If the corporation or LLC doesn’t pay its debts owed to contractors, for unfilled contracts, for legal fees, for loans, etc., the personal assets of the owners and officers (such as home, cars, personal belongings) aren’t normally at risk.  For example, if your corporation or LLC borrowed $200,000 to expand its operations but then your company went out of business, the owners normally won’t lose their private homes, cars, etc.  Such a loss is much more likely for a sole proprietor or a partnership.

(A Resident Agent is actually called a “Corporate Agent for Service of Process” in California, but you may also hear it called Resident Agent, Corporate Agent, Statutory Agent, or Domestic Agent.  They all mean the same thing.)

A Registered Agent can be either a person or corporation.   An RA must be located in every state in which your corporation or LLC does business and must be available to receive “service of process,” if the company it represents is ever sued in that state.  “Service of process” means to personally receive a copy of the summons and lawsuit, which happens if a company is sued.  A California registered agent can be an adult who lives in California or an approved California corporation with a physical address in California.  The corporation must keep regular business hours and accept hand-delivered services of process (so a P.O. Box isn’t adequate).

If you live in California, then “Yes,” you can be your own Resident Agent in California.  However, if you later move out of California, you will need to appoint a new Resident Agent in California.  It is unacceptable to simply hire a post office box because the constable, sheriff, or other person serving the lawsuit must actually put the legal paperwork in the hand of someone authorized to accept it.

The California Corporations Code requires that all business entities formed with the California Secretary of State (“SOS”) to appoint a Corporate Agent for Service of Process and have a corporate address in California. This is to ensure that the Secretary of State or anyone desiring to take legal action against an LLC or corporation can find a responsible party.  That party is the Corporate Agent for Service of Process, or “Resident Agent.”  At the same time, this law ensures that any LLC or corporation being sued or sought can be sure that the company will be informed of such pending legal actions.  So even if a corporation or LLC has no California office that can be easily located, the government has a way to communicate reliably with that company.  The Corporate Agent provides the California government this access to your business.  Using Resident Agent, Inc. provides this reliable corporate agent service.  Resident Agent, Inc. also ensures you will be informed of any official notices, or any significant changes in the law which we become aware of, so you can keep on top of California’s government requirements.

The California Secretary of State keeps track of all business entities that operate in this state.  Resident Agent, Inc. maintains your current address and contact information, so you will be informed of legal actions against your company in California.  And, of course, the California law requires that your company have a Resident Agent who is available whenever the SOS wants to contact your company.

Here are a few reasons you would want to hire an RA service:

  • Suppose you don’t live in California and you want to form a California LLC or a California Corporation, or you want to do business in California as a corporation or LLC based in another state. [That’s called a “foreign” corporation or “foreign” LLC.]  Your company must have a physical location in California, where your company or your RA can accept service of process.  Hiring a registered agent accomplishes this and is a lot cheaper than setting up a full-blown office in California.
  • Perhaps your business doesn’t keep regular business hours in which service of process or official mail can be delivered. Hiring an RA is an inexpensive way to protect your company from unpleasant and costly surprises.
  • Perhaps you don’t want your home or business address as a point of contact. Or maybe you live in a gated community, which could prevent your company from receiving notification that the company is being sued.  Not showing up in court at the appropriate time could cause your company to lose a lawsuit without even a chance to defend itself.  Using an RA will protect your privacy and ensure you get notified of any litigation against your company.
  • If your business is sued, the sheriff, deputy, or process server might deliver the lawsuit to your home or place of business. This can be distracting or embarrassing for you, your family, and your employees.
  • Resident Agent, Inc. will remind you when your annual fees and taxes are due, helping you avoid fines and penalties.

As your RA, Resident Agent, Inc. will

  1. Forward (by email) all mail from the California Government to you.  We’ll ask you to confirm that you’ve received the documents and we’ll follow up to ensure you get them.
  2. Forward (by email) copies of all Processes Served on you.  We’ll ask you to confirm that you’ve received the documents and we’ll follow up to ensure you get them.
  3. Provide you all routine forms you need to file, with instructions.  We’ll give you the link to do it yourself and save money.  This includes all forms required by the California Secretary of State.
  4. Remind you 30 days before your annual filings are due.
  5. Provide a List of potential Tax deductions available to LLC’s or Corporations
  6. Provide Information on Liability Protection for your LLC or Corporation
  7. Provide Updates on LLC or Corporation Laws
  8. Maintain your registered office address.

$39 per year.  This gives you all the basics which the California Secretary of State requires your Registered Agent to provide, plus some nice extra services.  If you desire to add services, you pay only for those you actually want.

No.  $39 per year is all you need to have our corporate agent service, which meets the California Secretary of State’s requirements.

Trick question.  You can always get more services by paying more.  But we won’t charge you for services you don’t need and don’t want.  We offer all the services you are required to have, plus some free additional services, plus optional services that you will pay for only if you want them.  The legally required duties of your Resident Agent are (1) be available to accept service of process and (2) to tell you if that Resident Agent ever accepts service of process on your behalf.  Your company gains no benefit from paying more to fulfill this requirement.  No matter how much your company pays, that’s what you get, unless your Resident Agent adds some services which you don’t need or which could be done by someone else.  In fact, Resident Agent, Inc. does add some free services [See the list near the top of this page] and we also offer some optional services [See the list near the top of this page] at varying fees.  Some Resident Agents include additional services which your business doesn’t need and won’t use.  That just costs your business more money.

The registered office is the actual, physical address of your business in California. If your company is a “foreign corporation” or a “foreign” LLC, your company isn’t required to have an office in California, although it’s OK if it does have one.  If your business has a registered office is California, this is the address that will be listed as the business’ contact on the California SOS’ public records.  You will still be required to have a registered agent in California.

Yes, you must have an RA in California before you can form or register your corporation or LLC in California. You won’t be certain if the name you’ve chosen for your business will be approved until it is officially approved, but you must have an RA before filing the application with the California Secretary of State.   If you hire Resident Agent, Inc. as your RA, we will be your RA no matter what name your company ends up with.  Just be sure you let us know if you change the name you originally gave us.

Normally, a process server will deliver a summons and a complaint [“Complaint” is the official word meaning “lawsuit”] to you or your registered agent. The summons informs you that a lawsuit has been filed against your company and provides some instructions which you must follow.  The complaint tells who is suing, who is being sued, a short summary of the reason they’re suing, and what the person or entity suing your company wants.  These documents are hand-delivered to your California registered agent, who accepts them on your company’s behalf.  Your RA will then inform you of the lawsuit and send you the summons and complaint. This is the point at which your company would probably contact a lawyer for further guidance.

You simply sign up with Resident Agent, Inc., online.  We’ll send you a copy of California’s Statement of Information form, which someone in your company must complete and submit.  There is an annual fee of $25 for a corporation or $20 for an LLC to submit the required Statement of Information, but changes can be submitted within the same corporate year without any additional fee.  If you provide the needed information to Resident Agent, Inc., we can complete and submit the form for you, for a fee of $8 (plus the state filing fee, if due at that time).

Yes, our opinion is that IN MOST CASES an LLC is better than a corporation.   We think the benefits of an LLC vs a corporation include the following:

  • The paperwork for an LLC is simpler than that of a corporation. This is not much of a factor in most cases, unless the company gets sued.  Although in theory both an LLC and a corporation give the same liability protection, in the real world lawyers assume that the average person hasn’t kept the corporation paperwork current, or has violated other rules governing corporations.  So the lawyers assume they can “pierce the corporate veil,” which would void the corporation’s liability protection.  But because the LLC paperwork is very simple, in most cases a lawyer will assume there’s no chance of piercing the LLC’s corporate veil.  That will help the LLC avoid or at least settle lawsuits.
  • If an LLC loses a lawsuit, the winner will normally get a “charging order” against the LLC. A charging order allows the winner to collect its booty from the LLC’s income before any income is distributed to the members, BUT the winner can’t force the LLC to actually distribute its profits.  Therefore, the LLC can retain its money without paying anything to the winner for as long as the LLC wants.  To compound the winners’ problems, the income taxes must still be paid on the LLC’s profits by those to whom it is owed, so the winner of the lawsuit will have to pay taxes on the money even though he/she didn’t get the money.  After a few years of paying those taxes, most winners are likely to settle or just drop their charging order.
  • There is no “double taxation” on an LLC. A corporation has to pay taxes on its income, and thereafter may pay dividends to the shareholders.  Then, the shareholders also have to pay taxes on the dividends they received, since the dividends are income to the shareholders.  On the other hand, for tax purposes, an LLC is normally treated as a partnership.  That means the LLC won’t pay any income tax, although the members of the LLC will still have to pay taxes on the income the LLC earns.
  • Presently, corporations don’t get any tax break for long-term capital gains, whereas individual members of an LLC still get a tax discount for long-term gains of the LLC.

A.  Our DO-IT-YOURSELF Packages provide everything you need to create a fully functioning LLC or corporation.  These packages are valid in all 50 states.  Either package costs $49.  You will also have to pay your state’s fees for forming whichever type of entity you choose.  (There aren’t any federal fees for forming either type of company.)

B.  Our DELUXE Packages provide everything you need to create a fully functioning LLC or corporation in California. We do all the filing for you.  The LLC DELUXE Package costs $169 and includes all the filing fees that must be paid to the California Secretary of State.  The Corporation DELUXE Package costs $199 (because California’s corporation fees are higher than for an LLC) and includes all the filing fees that must be paid to the California Secretary of State.  (There aren’t any federal fees for forming either type of entity.)

A. Assuming that you have already formed and registered your business entity in another state, the next step is to hire a Corporate Agent for Service of Process — which we often call a “Resident Agent.” Resident Agent, Inc. will be happy to serve as you Corporate Agent.  Our annual fee is $39.

B.  If you desire, we can also file the needed paperwork, act as your Corporate Agent, and pay the required fees to the California Secretary of State. Our fee for that whole package is $199 for foreign corporations or $169 for foreign LLCs; the difference in prices is because the state fees differ.

No, you can file everything yourself.  It will simply be a little more work for you, but the process isn’t that hard.

You must have a Registered Agent before you can file Articles of Incorporation (for corporations) or Articles of Organization (for LLCs) with the California Secretary of State.  On the initial filing, you will have to state who your RA is.  Also, you are required to renew your registration annually if you want to keep your company in valid legal standing.  As part of the annual renewal process, you must include the name of your Corporate Agent.

*  This means we hold copies of the documents you are required to have available in California.  These documents include your Articles of Organization, your Operating Instruction, your 6 most recent annual tax returns, your 6 most recent annual financial statements (if any), and your books and records about the internal affairs of the LLC for at least the current and past 4 fiscal years.

** Postage and Handling fees will be based on the actual amount of mail we receive for you.  See our Terms and Conditions.

***   This service only applies when we are your Resident Agent or Corporate Agent.  See our Terms and Conditions.

Routine California Forms:

  • Cal 2: Name Reservation Form ($10 state fee)
  • LLC-1: Form a Limited Liability Company ($70 state fee) (optional $5 state fee for certified copy of Articles of Organization)
  • LLC-5: Register a Foreign LLC ($70 state fee)
  • LLC-12: Statement of Information for an LLC ($20 state fee)
  • ARTS-GS – Form a C-corporation ($100 state fee) (optional $5 state fee for certified copy of Articles of Incorporation)
  • S&DC-SN: Register a Foreign Corporation ($100 state fee)
  • SI-200: Statement of Information for a domestic corporation ($25 state fee)
  • SI-350: Statement of Information for a foreign corporation ($25 state fee)
  • IRS Form SS-4: Tax ID:  Application for an Employer Identification Number (EIN) (free)

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contact@californiaRA.com
310-237-5771
1840 S Gaffey St, Ste 352, San Pedro, CA 90731

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