Legal Question in Business Law in California

Re: Business License for online services

I agree with the previous answer. Let me add a few thoughts:

First, the City of Los Altos probably requires, and issues, business licenses. But just as getting a license for your dog, or to get married, is not the most important part of pet ownership, or of forming a marriage, a business license is only a trivial (although necessary) part of forming a new business.

An LLC is formed by filling out and filing a very simple one-page form, an LLC-1, with the Secretary of State. The form can be downloaded from the Secretary of State's Web site at www.ss.ca.gov with about a half dozen clicks needed to find it.

However, anyone who thinks filling out a form is sufficient to create a business that will survive the realities of the business world is in a fool's paradise. For example, the law authorizing LLCs in California assumes each new LLC will have a so-called "Operating Agreement," a contract between its members that takes the place of a corporation's bylaws.

Incidentally, LLCs don't technically have "partners," they have members. LLCs also have managers. Managers and members may be the same people, they may partly overlap, or may be completely separate. A manager is someone who under the operationg agreement curently has authority to run the LLC; there may be only one, or many. A member is someone with an economic interest; an owner.

If this is to be a serious business with significant contributions of capital (money) and time, it would be foolish to try to set it up without an attorney's assistance. It's not so much a matter of forming it, as it is getting the rights and duties of the several participants down in black and white.

A starting point might be to get a couple of paperback self-help law or business books on LLCs or small business startup and operation in general, and read them thoroughly. Also, obtain and read the California LLC enabling law, found in the Corporations Code at sections 17000 to 17656. Then get a lawyer.

Re: Business License for online services

License?? Samples?? Nice try, no brass ring. You're asking for an attorney to give you for free what legitimate businesses pay thousands of dollars to get. Advice is worth what you pay for it.

You need to properly form and start a corporation or LLC [your tax adviser should tell you which version actually suits your needs instead of your speculation about it], follow all the state and federal rules and regs in doing so, issue the various categories of stock you desire for the different categories of shareholders if a corporation, prepay your first year taxes, obtain all required business licenses where you operate, create the operating documents specifying the rights and duties of the various members of the entity, create the written contracts for your services, etc, etc.

Feel free to contact me if you get serious about doing it right. A little money spent now will seem a bargain when you have to spend many times that later in litigation because you didn't do it right in the beginning.

Re: Business License for online services

I don't mean to be rude, but don't you mean, "Where can I get lawyer forms for free?" In that case, you may get what you paid for! What you have is a situation where everyone is on the same page starting the business. Down the road, a well drafted LLC agreement provides a point of reference (i.e. Oh yeah, I guess I DID agree to that!) and/or a road map to help you deal with the differences of opinion that arise over time. Having a lawyer draft the agreement will help you stay friends! I've seen this scenario over and over again. It's worth the investment, whether you call me or another lawyer. And, on a more positive note, best of luck as it sounds like you're starting a wonderful adventure!!