Dental Practice Sales
Professional Practice Sale
Medical Pratice Sale
CA Corporations
S Corporations
Free Appraisals & more

California Corporations
vs
California LLCs

The only limited liability organization that is available to medical/ dental professionals (professional LLCs and LLPs are not available to California practitioners)

Minimum $800 California Franchise Tax is waived for the first tax return/ fiscal year ($800 per fiscal year is payable by LLC)

No additional annual fee based on gross income (for LLCs this annual fee ranges from $900 for gross income over $250,000, $2,500 over $500,000, $6,000 over $1 million, and $11,790 over $5 million)

No income tax owed by shareholders of insolvent corporation for "cancellation of debt" (solvent LLC members of insolvent LLCs are generally taxed on the amount of bad debt cancelled)

Less annual paperwork (no annual minutes required, and no separate LLC tax return required for a one person LLC)

Far more freedom to creatively arrange differential capital contributions, profit distributions, loss allocations, preferential payments and voting arrangements between owners

Fewer limitations and burdens on trust ownership of LLC (dangers exist for trust ownership of S corporation)

* This tax comparison of corporations and LLCs is intended to address a typical California startup of a small business organization.  This comparison is not exhaustive, nor does it apply necessarily in each and every circumstance. The contents of this website are not intended to be, nor shall they be considered, legal advice or legal opinions. Please see your CPA and/or attorney for more thorough coverage of the subject.

CAVEAT: Pursuant to applicable federal regulations, we are required to inform you that any advice contained in this communication is not intended to be used nor can it be used for purposes of (1) avoiding tax penalties or (2) promoting, marketing or recommending to another party any transaction or matter addressed above.