The major reason behind forming an entity is to protect your personal assets from your company’s liabilities by creating a barrier between where you end and your company begins.
But what type of entity should you build? In California, the choice of entity that limits your personal liability are: Limited Partnership (LP), Limited Liability Company (LLC), and Corporation (including the newly recognized B Corp and FPC).
While Corporations and LLCs offer the utmost protection, California does not afford certain professionals this protection. Such professionals include: accountants, acupuncturist, architects and contractors, attorneys, chiropractors, doctors, pharmacist, physical therapists, psychologists, and a few others. Fortunately, California does recognize the formation of Professional Corporations and California Limited Liability Partnerships.
What it takes to form a company…
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