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California Contractors: Protecting assets from lawsuits

“Time is of the Essence” Provisions in Contracts: What Does it Mean?

Business formation in California | attorneys / lawyers in Sacramento


A corporation is a limited liability form of business in which the ownership is represented by shares of stock in the corporation. In the eyes of the law, the corporation is generally treated as a separate entity, much the same as an individual person. Owners of shares are entitled to share in the profits of the corporation, and are generally not liable for its debts.

If shareholders are also employees of the corporation, they are entitled to wages as employees and will be taxed as employees. The corporation itself may also be taxed as an independent entity. However, if the corporation is eligible and chooses a “Subchapter S” tax treatment, then the profits, losses and tax credits of the business generally pass through to the individual owners of the stock, avoiding taxation at both the corporate and individual level. Double taxation can also be minimized through salaries to shareholders or shareholder loans.

The Porter Law Group regularly incorporates small and growing businesses. Benefits include protection of the owner’s personal assets from business liability, tax advantages, perpetual existence, and easy transferability of ownership through the sale of shares. If you are considering incorporation, contact us. We’ll explain the pros and cons, and help you arrive at a decision that suits your business and personal needs.