Start on the right structure

There is no universally correct answer — it depends on your expected profit, whether you have partners, your liability concerns, and how you plan to pay yourself. A sole proprietorship, single-member LLC, multi-member LLC, partnership, S corporation and C corporation each carry different tax treatment and filing obligations in California. We walk through your actual numbers and explain the trade-offs before you file anything.

Nearly every LLC, limited partnership and LLP registered in California owes the $800 annual minimum franchise tax to the Franchise Tax Board starting in its first taxable year. The temporary AB 85 first-year exemption only applied to entities registered between 2021 and 2023 and has expired. Corporations are different: they remain exempt from the $800 minimum franchise tax in their first taxable year under a separate, permanent rule. LLCs with sufficient California income also owe a separate, tiered gross receipts fee in addition to the $800. These costs are part of the entity decision, not an afterthought, and we factor them into the comparison.

An S corporation can reduce self-employment tax at certain profit levels, but it also adds payroll requirements, a separate return, and the duty to pay yourself reasonable compensation as a W-2 wage. Below a certain profit it often costs more than it saves. We model your specific figures and tell you plainly which side of the line you're on — we don't quote savings before seeing your facts.

Beyond the state formation documents, most Riverside businesses need a City of Riverside business tax certificate, and anyone operating under a name that isn't their legal name must file a fictitious business name statement with Riverside County and publish it as required. We make sure the state, county and city pieces are all covered, not just the headline filing.

No. Riverside CPA & Tax provides tax and accounting services, not legal services, and we don't give legal opinions. We advise on the tax and accounting consequences of each entity choice, handle the tax registrations, EIN application and S corporation election, and coordinate the filings — and where legal documents or advice are needed, we'll tell you to involve an attorney.

At minimum: the entity filing with the California Secretary of State, an EIN from the IRS, any S corporation election within its deadline, a separate business bank account, a bookkeeping system, and payroll if you'll have employees or pay yourself wages as an S corporation owner. Setting these up from day one is far cheaper than untangling mixed finances at tax time.