The Certificate of Formation proves the creation of your company or corporation.
Key Documents for LLCs
A Certificate of Formation provides a snapshot of your LLC. You also need an Operating Agreement. This document lays out the internal rules for your LLC. Operating Agreements contain details about profits, losses, member roles, and more.
Corporations and LLC Differences
Articles of Incorporation, also known as Certificate of Incorporation in some states, legally establish a corporation. It separates the business’s assets from the owner’s assets.
Termination and Tax Considerations for LLCs
The Certificate of Cancellation is needed to cancel a limited liability company in California. The powers, rights, and privileges will cease once the Certificate of Cancellation is filed. As an LLC owner, you’ll incur steep self-employment taxes on all net earnings from your business, whereas an S corporation classification would allow you to only pay those taxes on the salary you take from your company.