Legal Question in Business Law in California

Re: Incorporation

Answers in sequence:

1. Yes. One corporation can "own" more than one Web site just as one corporation can own any number of trademarks, stores, factories, etc. Note, however, that at some point it might be practical to operate under more than one corporate mantle for identity, liability or other purposes.

2. Transferring liabilities from a sole proprietorship to a newly-formed corporation is a two-step process. The first involves the new corporation's agreement with you (or whomever) to assume responsibility for those liabilities in exchange for a valid consideration. That is usually sufficient if the corporation then dutifully pays the liabilities, indicating to the creditors that it's paying liabilities delegated to it by you (or whomever). However, the first step alone doesn't take you off the hook, it merely adds the corporation as a co-obligor. The second step that gets you off the hook as the original obligor is to obtain releases from the creditors which substitute the corporation for you as the sole creditor. This is not something most creditors will want to do, so as a practical matter a new closely-held corporation will just do step 1 -- assume the liability and pay it off. In any event the creditors should be notified of the delegation of the duty to pay from you to the corporation.

3. Kenneth, if the business will operate in California, it will have to pay the California franchise and other taxes just as though it were a California domestic corporation. Plus, it will have to pay Nevada franchise tax. That means double payments and double return preparation. You will also have to pay someone to act as your agent for service of process in Nevada, and comply with other Nevada laws. Some corporations benefit from formation in Nevada, i.e. greater secrecy about officers and directors may be available. However, as a general rule a small business is much better off incorporating in the state where it is headquartered and transacts most of its business. By the way, Nevada corporations also pay California income tax on California profits, so no savings there, either.

Re: Incorporation

You can transfer everything to the Corporation by contract. California law is better, I would incorporate in CA.