Legal Question in Business Law in California

Re: Business Entity LLC/Corp/S-Corp

1.Can a foreign citizen be a member of a S Corp?

a resident alien can potentially be a stockholder.

2.Should I retain and an attorney when forming a corporation or LLC, or is it sufficient to use on a hourly fee basis

The question doesn't make sense. Some attorneys will charge a flat fee for incorporation while others charge on an hourly basis. However, if your needs are complex, most, if not all, attorney would charge on an hourly basis as it would be difficult to gauge the time needed to meet your requests.

Re: Business Entity LLC/Corp/S-Corp

Yes, under normal circumstances resident aliens can be hold stock in small, (Close) corporations. The second party or question makes no sense whatsoever. But what does make sense is, while there are numerous self-help and four books available, when dealing with business entities it is much better to obtain an attorney to invite you who is an expert in the area because of the numerous effects the nature of each business entity may have in terms of its operation, taxability and ease-of-use with the kind of business the you're doing. Most attorneys will give you some form of estimate of cost based upon what your desire is at the outset. If you change your desire is in midstream that can be modified she should stay on top of the nasty attorney. The formation of corporations and LLC's are usually on a flat fee basis. The need for other documents in addition to the formation documents can be on hourly or flat fee basis depending upon the attorney. After passing the bar I started teaching at the same time as practicing and taught corporate law. I found the need to school my students on the practicalities of dealing with the different forms of ownership businesses could have including the corporate form. One of the things that was quite evident was each business sometimes was better suited for different business entities in terms of its ownership and some were business neutral as I call it in you could use any kind of entity to its advantage. These are the kinds of things you must ask about and hope the attorney is cooled well enough that the alternatives can be presented to you.i have been practicing law in this speciality for over 30 years in the san francisco bay area and if you wish to consult with me you can contact me at 925-945-6000.

Re: Business Entity LLC/Corp/S-Corp

Yes, a foreign citizen can be a member of an S Corporation. But, an S Corporation cannot have a "nonresident" alien as a shareholder. So, any resident alien lawfully admitted to residence in the USA can be a Sub S shareholder. It is even possible that an alien with a "substantial presence" in the USA (measured by the number of days present in given years), can be a lawful Sub S shareholder, even though he has not been granted a permanent residence visa (green card).

It is, indeed, usually a good idea to have a lawyer assist you in setting up a business organization. Setting up an LLC has a lot of the same liability advantages as a corporation and is usually less costly to create, and can elect, under IRS rules, to be taxed very similarly to an S Corporation. Of course, the first step is to consult with the client regarding the business nature and objectives, capitalization, etc., and determine which form of organization is the best way to go. If your business objectives are well-defined, I would be glad to give you a free initial consultation to assess your objectives and determine which business form is likely your best option. In the course of that discussion, or very shortly thereafter, I could almost certainly provide you with a firm flat fee quote for creating and filing the necessary documents.

My offices are in North Georgia, but I also have been a member of the California Bar since 1979 and remain an active member authorized to practice there. In this kind of situation, you can be effectively assisted by me since it will mainly be an exercise in consulting, drafting and filing. Feel free to contact me at [email protected] or (770) 534-1057 if you would like to discuss your objectives with me further.

I would be glad to

Re: Business Entity LLC/Corp/S-Corp

Well, your questions both make sense to me.

A non-resident alien cannot be a shareholder in an S corporation. This can be a decisive factor in the choice between using an S corporation or an LLC for a new business organization. Even with an LLC, there will be special withholding rules that apply to the nonresident alien member's share of profits.

When using a lawyer to form a business organization of whatever kind, you and the attorney may contract for the attorney's services on either a negotiated lump-sum basis or an hourly fee, or some combination.

I do a lot of corporation and LLC start-ups. In general, simple set-ups where the amount of lawyer effort is predictible are usually done on a fixed-fee basis (and I do them OFTEN, but not always, in the $500-$1500 range depending upon how much of the errand-boy aspects I will do, rather than the client). In more complex situations, as where there are several founders whose interests must be negotiated, buy-sell agreements, handling the affairs of an existing business being incorporated for the first time, or situations involving financing the new business as well as forming it, a fee per hour is usually necessary because no one can predict how many hours will be required.

I suspect some confusion results from the words "retain" and "retainer." A lawyer is considered "retained" whenever an attorney-client relationship arises, regardless of how the lawyer will be paid -- lump sum, hourly, percentage of recovery (contingent fee), or pro bono (no fee). A "retainer," on the other hand, is a sume of money paid to the lawyer in advance. In the old days, a retainer was usually paid to buy the lawyer's future availability without any present request for services -- thus the phrase "on retainer" -- but nowadays, a retainer is usually just a down-payment for work a lawyer is currently being requested to do.