Legal Question in Business Law in California

There are no serious problems to overcome with him opening a company as desired, in various available corporate structures. He will need to comply with the formation and registration laws here. Family owned corporations as you propose can have investors as shareholders, or the company can simply borrow money, by following the rules. Choice of state for formation is up to the owners, but there is little to gain by out of state formation unless you expect it to end up as a multi-billion dollar publicly traded company. If it reaches that size, you can make the changes necessary then when needed. The primary choice is what form of corporation to use, based upon the advice of a tax professional, CPA, etc., and based upon how corporate profit is handled. Consult with one, or I can arrange for that. With that choice in hand, please feel free to contact me for the legal help you'll need in establishing this corporation.

First, the company can be either an LLC or a C corporation if formed in California, or it could perhaps be formed under the laws of India and then registered to do business in California as a foreign corporation. The choice between LLC or C corporation would be governed by income tax law for the most part, and if the sole or major shareholder was outside the U.S., the question requires special knowledge of the shareholder's country's tax laws. An LLC would perhaps be best. There is no advantage to forming it in any state other than California if this state will be its USA base of operations.

I would suggest that you look for a service you can hire on a monthly basis to provide mail receiving. Look for something like maibox, mail forwarding, secretarial or desk-space services in your neighborhood. You could probably operate the business out of an apartment or rented house without trouble, but these services are not expensive and might keep you out of unknown trouble.

1. Your assumption is correct. He could also form his company in India and register it as a foreign corporation doing business in California.

2. Using your residence address is likely to be a problem with local authorities, since most local governments have restrictions on running the kind of business you propose out of a private home. If it is permitted under your local zoning and business license laws, however, there is not state law issue with it.

3. Nevada is a tax-advantaged state to do business in, but taxation is based on where you do business, not where you are incorporated or form your LLC. The promotions about forming your business in NV for tax reasons are scams. Deleware has corporate governance laws that are very favorable to corporations wanting to minimize shareholders rights and have maximum flexibility in mergers and acquistions, and other corporate governance issues for publically traded companies. Unless you plan to be publically traded, that is a non-issue for you. So there is no reason to incorporate or form the LLC in a state other than where your principal place of business will be located.

4. Whether you would have to hire someone here depends on your business model.