Are you working on starting a new company in California? California is one of the most challenging states in which to do business, especially if you intend to be an employer. What is the best structure for your new company, and why is it important to reach out to the attorneys at the Watkins Firm for a free consult at 858-535-1511?

What is the best business entity for your new company?  Should you select an Limited Liability Corporation or LLC?  Would an S-Corporation or C-Corporation be the better choice based upon your income or how you will conduct your business?  Will your company be comprised of professionals or healthcare practitioners?  Should you consider a California Professional Corporation?  Should you also consider a Management Services Organization or MSO to go along with your medical practice or healthcare business entity?  How will taxation or regulatory requirements affect your choices?

Starting a new company in California  is going to require much more than simply downloading boilerplate forms and paying a fee to register your company here in California.  California laws are unique and favor the minority position unless you specifically address these issues within the corporate documents themselves.  Most download sites do not develop business succession plans or include an effective operating agreement.  What happens if one of the parties passes away or becomes seriously injured or incapacitated in the future?  What is the best way to protect your company from the spouse or heirs of a co-owner who attempt to step in during an illness or if another ownership interest passes away?  How will business ownership interests be valued in the event of a personal life issue such as a divorce or bankruptcy?  How will new investment be brought into your company?

The business formation attorneys at the Watkins Firm have more than 40 years of experience starting thousands and thousands of California companies and businesses.  We can and will meet with you in person to discuss your new venture.  We review dozens of aspects of your how you will do business and the legal clauses and structures within your corporate documents.  We discuss each option with you and any partners or co-owners so that your company can be tailored to your unique aspirations and requirements.

Pro-Tip: “You’re giving birth to a living creature that’s been recognized by the United States Supreme Court. And so what it means is birth is what we call capitalizing. And so you have these corporate documents and you have to decide on how much ownership will be and who owns what. Then you decide about what potential ownership there are. And then you capitalize it. Either you capitalize it with cash or you capitalize it with goodwill or a combination or a property. But how you capitalize it can determine whether or not it’s a real company or you have all those protections of corporate veil and creditors and you’re personally shielded. So how you start it is very important. And thinking about it, we’ll send you on the right path to avoiding all kinds of pitfalls and trouble.

I mean, especially if you’re going to be doing some big business, you’re going to have big liability or you could personally not have big liability. And also you can have an entity that can be sold. You can have an entity that can be sold in whole or bring in investors. If you do everything right, you get to do all these things. If you get a big opportunity and you didn’t set your company up correctly, then you can’t have your friend with an extra million dollars agree to invest.

You’ve got to rewrite everything and you’ve got to restructure everything and you’ve got to hope you didn’t make any mistakes. And all of a sudden your friend with the money doesn’t thing this opportunity looks like such a good investment. And that person who’s got the investment money will say, well, this person’s not professional. This person’s not really serious about doing business. And you’ll miss it all because you didn’t pay attention in the beginning when you formed a company.

And just because you are professionally licensed, or a medical professional doesn’t mean you’re going to be great at staffing, at equipment, at rent, at all those things. Running a business.  Why not allow business experts to efficiently and profitably run the business side of things while you focus on practicing medicine?  You can establish an MSO and it can help with all those things. And you can bring in third parties who are professional at it and you can cut a deal with those third parties to save costs, make you more money, and come up with a different revenue stream. That would be different than if you just bunched it all together with your medical practice and try to manage the whole thing and account for it. So they do what you’re not good at, take it off your plate so you can focus on practicing medicine, for example. The patient’s satisfaction goes up, the quality of healthcare goes up, the profitability goes up. And it’s scalable!” – Dan Watkins, Founding Partner

Starting a new company in California isn’t as simple as downloading a few forms. We invite you to review our podcast Episode 34 – Business formation as well as the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today.

Learn about our start-up services and the value of the business coaching and insight our experienced business attorneys can provide to help get your business off to a strong and secure start.