Starting an entity in CA

What is the name of your state? California

Hey all, this is my first post to this forum and before I start I wanted to say kudos to all who offer help here. Very cool...

I'm about to start a business entity in the State of California and i have some questions. I'm fairly familiar with the differences between corporations, LLCs, S-Corps, etc. but have a few details that I'm unsure of. Here is a bit of information about my business:

-I will be the only shareholder and don't anticipate needing outside investing in the near future. However, I do want a structure that I convert to a corporation within a couple of years.
-The purpose for forming an entity is two-fold: (1) to get separation between my personal finances and the business finances and (2) to have protection for my personal assets.
-I may have an employee or two in the next year but hope to have the personal employed on a contractor basis.
-The business will be Internet-related and I will receive revenue from people around the U.S. and potentially around the world.

Here are my questions:

1. What would the major differences be between LLCs and S-Corps in California? I'm pretty sure that they are fairly minor (# and type of shareholders, etc.) but I'm wondering if there is something major I might be missing out on?

2. I've heard something about a $900 minimum tax for LLCs in California. Can anyone comment on whether that is true and how that works?

3. I am considering doing my filings through bizfilings.com? Does anyone have any experience with their service or have any comments or good or bad regarding them?

4. Does anyone know whether there is an online search process available to determine if I can use the name that I would like to? I'm pretty sure that no one is using the name I have picked out but of course want ot check it first.

Thanks in advance for any help!

I am in the similar situation, and I think I can offer what I have learned so far and discuss it with you here.

I am outside US and I am looking to build a couple of online businesses targeting US and Canadian customers. I will answer your question by the order you posted without quoting them.

"I will be the only shareholder and don't anticipate needing outside investing in the near future. However, I do want a structure that I convert to a corporation within a couple of years.
"
www.turbotax.com/articles/changing_ the_legal_structure_of_your_business.html

"The purpose for forming an entity is two-fold: (1) to get separation between my personal finances and the business finances and (2) to have protection for my personal assets.
"
An “S” corporation begins as a “C” corporation. After the initial filing an additional form (form 2553) is filed with the IRS to change to “S” corporation status (referring to Chapter S in the IRS code). There may be additional state filings required. Once this process is complete, the IRS treats the corporation like a partnership or sole proprietorship instead of a separately taxed entity. This results in shareholders’ individual tax returns reflecting income generated or losses accrued by the corporation. Converting to an “S” corporation affects the tax status but does not generally effect the legal protection offered by the corporation. Often a reasonably small salary is paid and a large Schedule K-1 distribution is paid to the employee/owner to help lower Social Security and Medicare taxes.

Therefore, if you want your personal asset be separate from your company's, do NOT choose S corporation.

http://www.companiesinc.com/structures.asp
http://www.bizfilings.com/learning/corptypes.htm#LLCvsS

1. See Above
2. Yes, it is true. See Bizfiling.com
3. I don't have any experiences with this company, and I am looking for one too. I would appreciate it very much if you could share with me your opinion about this.
4. www.ss.ca.gov/business/resources.htm. You can also apply for Tax ID there.

Just a little help about what I know.

I sold my business (LLC) Mar 04. Here's what I can share

There is an AMT (alternative minimum tax) of $800 per calendar year. Whether you sell anything or not. So, it is in your best interest to start your LLC or Scorp Jan 01. Because, if you start it Dec 31, you are liable for a full $800 AMT even though you were in business 1 stinking day. Same with closing your business. Welcome to CA. You might look into incorporating your business in another state

I used bizfilings and they were fine for me. They were the cheapest I found too. I believe their site has a good side by side comparo of scorp vs llc

And, be very careful in selecting merchant accounts. I found out that the fine print hooked me into an additional 3 years with the company because I made a small change in my account. Know their terms of cancellation thoroughly or pay for it like I will.

Good luck!

Anyone has any experiences with companiesinc.com too? I am outside US and need a US business banking account. Does anyone know which company offers decent and reliable service for this?

I am stilling in the process of picking state for my businesses. I found that some states offer 0 sales tax while others have 0 income tax. If I apply for a single member LLC with disregarded status, I will most likely be treated as a solo priepriotoryship and pay income tax for all business profits. But some states offer 0 income tax tend to treat such entity as corporation and force to pay sales tax. I am wondering if anyone can give me some advice on which states should I choose in my situation.

Thank you so much for your help!