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Apply for your Home Health Care License before Purchasing a Home Health Care Company

Home health care is a rapidly expanding industry in California. The Employment Development Department (EDD) notes that the home health care industry already generates more than $10 billion in annual revenue in our state. You may be thinking about purchasing a home health care company—either to add to your existing business or to get into the industry.

When buying or acquiring a home health care agency in California, it is imperative you understand the licensing requirements. You should apply for your license before you purchase the company. Our Bay Area home health care agency attorney explains what you need to know about home health organization licenses and purchasing these businesses in California.

Understanding the Licensing Requirement: Home Health Care Agencies in California

As of January of 2016, all home health care agencies that operate in California must comply with the Home Care Services Consumer Protection Act. Among other things, the law requires that all home health care organizations in the state must be properly licensed. If you do not have the appropriate home health care license, it is unlawful for you to operate the business. Licensing is a major consideration when you buy/acquire a home health care business.

You Cannot “Buy” a Home Health Care License in California

In California, obtaining a license to operate a home health care service is not as simple as purchasing an existing business. Buying a home health care business in California does not mean that you automatically get access to its license to operate.

All individuals interested in entering this industry must be prepared to apply for their own license or be prepared to complete a required waiting period. Licensing is an issue that you should address before you finalize the purchase of a home health care business.

You do not want to end up in a situation whereby you effectively buy the debt of a home health care business and a few relatively low value assets, without getting access to the license that you need to operate the company.

Protect Yourself: Consult with a Business Lawyer who has Home Health Care Experience

Buying a business is complicated—especially so in California’s highly regulated home health care industry. It is imperative that any deal that you enter is structured properly—with licensing sorted out before the transaction is finalized. Do not go it alone. When venturing into the home health care industry in California, it is crucial to engage a knowledgeable business lawyer with industry-specific experience. Your attorney will understand the complexities of licensure, issues of regulatory compliance, and the ins and outs of the business transfer processes.

Contact Our Bay Area Home Health Care Business Law Attorney Today

Lynnette Ariathurai is a commercial lawyer with the unique skills and experience to handle the issues facing home health care agencies. If you have any questions about health care licenses and the purchase of a home health care company, please contact us today for a fully private consultation. From our Fremont office, our firm serves home health care agencies across the Bay Area.

California home health care licensing, home health care agency, home health care licensing

Securing your Medi-Cal License before you Purchase a Medical Practice

Are you preparing to purchase or acquire a medical practice in California? It can be a fruitful business decision—but it is crucial that all aspects of the transaction are handled properly. Health care is a highly regulated industry. You need to obtain a Medi-Cal license—and there are certain steps that you should take to help ensure your application is approved in a timely manner. Our Bay Area business law attorney explains why it is so important to secure your Medi-Cal license before you purchase a medical practice in California.

Background: The Importance of a Medi-Cal License

Medi-Cal is California’s Medicaid program. The public health insurance program provides coverage for health care services for low-income individuals and other qualifying people with significant financial or medical needs. As explained by the California Department of Health Care Services (DHCS), a medical practice must apply to enroll in the Medi-Cal program to be an eligible provider. It is a big market and medical providers that are not enrolled cannot be reimbursed by Medi-Cal.

A Premature Medi-Cal Application Will Result in Denial

The Medi-Cal application enrollment process you must undertake when buying a medical practice in California is complicated. Timing is a key issue. Submitting your application too early—prior to fully establishing the business—can result in denial. Medi-Cal stipulates that before applying, practices must meet several requirements, including securing a lease and fulfilling other preconditions, defined as “establishing the business” under CCR Title 22, Section 51000.60. The proper sequence of steps is crucial when applying for a Medi-Cal license. An experienced attorney can help you navigate this procedure and with other matters related to the purchase or acquisition of a medical practice.

You May Qualify as a Transferee Applicant if You Buy a Medi-Cal Enrolled Medical Practice

If you are planning to purchase or acquire Medi-Cal enrolled medical practice, you could potentially qualify as a “transferee applicant”. It is a classification that is applicable to individuals or entities acquiring a business already enrolled with Medi-Cal. Notably, the transferee application is a distinct process that can help streamline the transition and speed up Medi-Cal enrollment. However, not all purchasers will qualify. It depends on your specific situation. There are several different requirements that must be met. Among other things, you will need a valid Successor Liability with Joint and Several Liability Agreement. A Bay Area business lawyer with experience handling medical practice transitions in California can help you understand all your options and ensure that your purchase is structured in the manner designed to best protect your interests.

Contact Our California Business Lawyer for a Confidential Consultation

Lynnette Ariathurai is a business lawyer with experience helping clients purchase medical practices. If you have any questions about Medi-Cal licenses and the purchase or acquisition of a medical practice, we can help. Call us now or contact us online to set up a confidential consultation. With an office in Fremont, our firm serves communities throughout the San Francisco Bay Area.

California Medicaid, Medi-Cal licensing

Building a Group Practice Veterinarian Business

According to the most recent information published by the Bureau of Labor Statistics (BLS), California had 7,770 actively licensed veterinarians as of 2022. For veterinarians, there can be significant commercial advantages to operating as part of a group practice. At the same time, building a successful group veterinary practice is complicated. It is imperative that you have the right structure in place. In this article, our Fremont attorney for starting a business highlights the key things to know about building a group practice for a veterinarian business in California.

Develop a Shared Vision to form a Group Veterinary Practice (Business Plan)

Building a successful group veterinary practice starts with getting all major players on the same page. It is generally a best practice to develop a comprehensive business plan. Among other things, your business plan should outline the goals, operational strategies, and financial projections of your practice. It should also include things like a market analysis—which can be used to identify potential clients, competitors, and commercial risks.

Form Your Veterinarian Business – You Need the Right Legal Structure

The right legal structure is essential for your group veterinary practice. In California, a professional veterinary corporation is generally the most sensible structure for group veterinary practices. It provides liability protection while being taxed as an S-corporation. Notably, there are strict ownership requirements for professional veterinary corporations in our state. It should be owned by a licensed veterinarian. To form a professional veterinary corporation, you will need to file articles of incorporation with the California Secretary of State and draft bylaws.

Ensure Your Business is Properly Registered and in Compliance with Tax Regulations

Once your professional veterinary corporation is formed, it is crucial to register your business and ensure compliance with all business regulations and tax laws. Apply for an employer identification number (EIN) from the IRS, which is necessary for tax purposes. California has an annual franchise tax of $800 for all professional corporations. Beyond tax laws, it is also crucial that you ensure that all veterinarians who are part of the group practice are properly licensed.

Find and Lease the Right Commercial Space to Operate Your Veterinary Business

A group veterinary practice in California needs the right commercial space to operate effectively. Finding the right location is a key component to the success of your group practice. Consider factors such as accessibility, parking availability, proximity to a demographic that aligns with your target market, and the potential for growth. As commercial lease negotiations can be complex, you should be ready to consult with a top business start-up attorney.

Contact Our Fremont, CA Business Law Attorney for Veterinarians Today

Lynnette Ariathurai is a top business law attorney with the skills and experience to represent veterinarian businesses. If you have any specific questions or concerns about building a group practice veterinarian business, please contact us today for a fully confidential consultation. With an office in Fremont, we serve veterinary practices throughout the Bay Area.

group vet practice, group veterinary business, veterinary group practice, veterinary practice legal advice

5 Critical Aspects of a Franchise Agreement—What to Know Before You Sign

Franchises are one of the most popular business models in California. According to data from the International Franchise Association (IFA), there are approximately 76,000 franchise businesses operating in the state. The franchise agreement is the foundation of the relationship between the franchisor and the franchisee. As a prospective franchisee, you need to carefully review the terms of the contract. Here, our Fremont business law attorney highlights five critical aspects of a franchise agreement and explains the key things to know before you sign in California.

California Regulates Franchise Agreements—But Contract Language is Still Key

The California Franchise Relations Act (CFRA) is a state law that establishes a regulatory framework for franchise relationships. It was passed, in large part, to establish protections for franchisees. The CFRA aims to foster fair business practices and safeguard the interests of California franchisees. Along with other key issues, the law regulates:

Jurisdiction;
Termination;
Nonrenewal;
Transfer of rights;
Inventory repurchases;
Arbitration clauses; and
Venue selection.

While California law provides some important legal protections to franchisees, it is imperative to emphasize that the relationship between the franchisor and the franchisee is still primarily governed by the franchise agreement. You should ensure that your franchise agreement is reviewed by a California business lawyer who has experience representing franchisees.

Note: The California legislature recently passed Assembly Bill 676 (AB 676) into law. It updates both the CFRA and the California Franchise Investment Law (CFIL). The state statute imposes some additional obligations/restrictions on franchisors.

Five Key Things to Look for in a Franchise Agreement in California

The Total Cost (Start-up Investment, Ongoing Costs, etc)

Cost matters. Franchisees in California should consider both the initial investment and ongoing costs. The initial cost—often referred to as the franchise fee,—is the amount payable upfront to gain the right to operate the business. It can vary widely based on the franchise, the industry, and the specific market conditions. Of course, this is just the beginning: A franchisee in California is often also responsible for ongoing costs, such as royalty fees, marketing fees, and other expenses.

Grant of Rights (Territorial Protection, Intellectual Property Usage, etc)

The grant of rights outlines the specific rights and restrictions that the California franchisee has under the franchise agreement. Along with other things, this may include territorial rights. These rights dictate where the franchisee can operate and provide protection from encroachment by other franchisees. Beyond that, the franchisor may grant the franchisee the right to use their IP.

The Resources that Will Be Provided By the Franchisor

Franchisors often provide a variety of resources to franchisees to aid in their success. These resources may include comprehensive training programs, ongoing support, marketing materials, and access to proprietary systems and technology. The specifics of these resources should be clearly outlined in the California franchise agreement to ensure both parties understand their obligations.

Duration—including Renewal Rights and Early Termination Rights

The duration of the franchise agreement defines how long the franchisee has the right to operate the business. This is usually a fixed term, often between 5 and 20 years, but it varies depending on the franchisor. Additionally, the agreement will detail the terms for renewing the contract at the end of the initial term and conditions under which the agreement can be terminated early.

Dispute Resolution Provisions

Dispute resolution provisions are integral to any franchise agreement signed in California. They lay out the process for resolving disagreements between the franchisor and franchisee, whether they relate to contract interpretation, operational issues, or financial disputes. These provisions usually stipulate whether disputes will be handled through negotiation, mediation, arbitration, or litigation. Many franchise agreements include a mandatory arbitration provision.

Call Our Fremont, CA Franchise Law Attorney Today

Lynnette Ariathurai is a business law attorney with the skills, experience, and expertise to represent franchisees. If you have any questions about the terms or conditions of a franchise agreement, please do not hesitate to contact us today for a confidential, no obligation consultation. With an office in Fremont, we provide franchise law representation throughout the Bay Area.

Franchise agreements, franchise dispute resolution, franchise law, franchise regulations

Office Lease Considerations for Veterinarians

Veterinary medicine is one of our region’s most important industries. The Bureau of Labor Statistics (BLS) reports that there are nearly 8.000 actively licensed veterinarians in California. A successful veterinary practice needs the right office space. It is imperative that you reach a lease agreement that effectively protects your interests. In this article, our Bay Area business law attorney highlights some key office lease considerations for veterinarians.

Five Key Lease Considerations for Veterinary Practices in California

1. Total cost (base rent plus any percentage)

The rent for a veterinary lease is not always as straightforward as it may seem. Be sure to consider both the base rent and any additional percentage charges that may apply. Veterinary practices must thoroughly review the lease agreement and understand all costs associated with the property, including common area maintenance fees, property taxes, and any other expenses.

2. Viability and fit of the office space for your needs

When selecting a location for your veterinary practice, ensure that the office space is suitable for your specific needs. Assess the layout, size, and accessibility of the property to determine if it can accommodate your practice’s services, equipment, clientele, as well as any plans to house animals on-site. Consider any modifications or expansions that may be necessary and whether the space can accommodate them.

3. Property maintenance, repairs, and improvements

Before signing a lease, commercial tenants must clarify who will be responsible for property maintenance, repairs, and improvements, including things like routine upkeep, addressing structural issues, and making necessary updates to accommodate your practice’s growth. It is a key consideration for veterinary practices in California.

4. The liability risks

As a veterinary practice owner, it is crucial to understand the liability risks associated with the property you are leasing. Review the lease agreement for any clauses that may expose you to potential legal issues or damages. Ensure that you have the appropriate insurance coverage to protect your practice from potential risks, such as accidents or property damage.

5. Renewal and/or termination options

When entering into a lease agreement, it’s essential to consider the long-term implications for your veterinary practice. Review the renewal and termination options outlined in the lease. Ensure that the lease terms allow for flexibility should you need to expand, relocate, or downsize your practice.

You Have the Right to Negotiate a Lease: Get it Reviewed by a Lawyer

You have the right to negotiate a lease for your veterinary practice. A well-negotiated lease can significantly impact your practice’s success and protect you from potential legal issues. Before signing any lease agreement, consult an experienced lawyer who specializes in veterinary law. They can review the terms of the lease, identify potential concerns, and suggest modifications that better suit your practice’s needs.

We Provide Business Law Services to Veterinary Practices in the Bay Area

Lynnette Ariathurai is a business law attorney with experience working with veterinary practices. If you have any questions about office lease considerations for veterinarians in California, we are here to help. Call us now or contact us online to set up your confidential initial appointment. From our Fremont law office, we serve veterinary practices throughout the Bay Area.

commercial lease agreements, veterinary office lease, veterinary practice commercial lease

Considerations When Buying an In-Home Health Care Company

Home health care is one of the fastest growing industries in California. The Centers for Disease Control and Prevention (CDC) estimates that there are nearly 12,000 home health agencies nationwide. If you are considering purchasing a home health agency, it is crucial that you know how to protect your legal rights and financial interests. Here, our Fremont lawyer for buying a business highlights key considerations to know when buying an in-home health care company in California

Important Issues to Review When Buying an In-Home Health Care Agency in California

Health care is a large, highly regulated industry. There are many unique considerations that you need to be aware of if you are purchasing a home health care business. Here are some key things to keep in mind when assessing an in-home health care company in California:

Accreditation: Review the agency’s current accreditation status and verify whether it’s up to date. Accreditation is essential for reimbursement from Medicare and Medicaid, and it’s a key factor in the agency’s overall credibility. The most common accreditation organizations for home health agencies are The Joint Commission, CHAP, and ACHC.
Employees: In-home health care companies are only as strong as their human capital. Staff matters. Evaluate the current employees and their qualifications. Verify that all staff members are licensed and certified, and, if applicable, review any employment contracts.
Medicare eligibility: Under federal law (42 CFR § 424.550), a home health care agency that has enrolled in Medicare within the last 36 months generally cannot be transferred/sold. If it is sold, the company may be barred from Medicare. This could effectively destroy the business, but there are some exceptions to the federal rule. A business lawyer can help you evaluate any specific situation.
Franchise relationship: Many home health care companies in California are franchise businesses. If you are considering purchasing a home health company and becoming a franchisee, you need to understand the benefits and drawbacks that come from the franchise relationship. The franchise agreement should be reviewed by a lawyer.
Buy-Sale Agreements: A well drafted agreement to purchase or sell the business is critical, to minimize the risks of liability. It should be drafted or reviewed by an attorney.

Of course, all the other issues that you would need to consider when buying a business still apply. For example, it is imperative that you take a careful look at a home health care company’s balances—all assets and all liabilities—before finalizing any purchase agreement.

Comprehensive Due Diligence is a Must When Buying a Bay Area Business

When buying a business in the Bay Area, it is imperative that you conduct thorough due diligence to avoid potential pitfalls. Among other things, due diligence should include a review of legal, financial, and operational aspects of the business. An in-home health agency is no exception to the rule. As this is a complex industry, comprehensive due diligence is especially important. You do not have to figure everything out alone. Buyers should be prepared to work with an experienced business lawyer.

Get Help from a California Business Lawyer for In-Home Health Care Companies

Lynnette Ariathurai is a top business lawyer with deep experience working with home health companies. If you have questions about buying an in-home health business in California, we can help. Contact us now for a confidential consultation. Our firm works with home health companies in Fremont, Newark, Hayward, East Bay, Milpitas, Union City, San Leandro, San Jose, Santa Clara, and throughout the region.

health care company, home health care, home health care agency, in-home health care agency

CA Assembly Bill 890 – What it Means to Nurses and Questions that Remain

Nursing is one of the most important occupations in our region. According to data from the California Board of Registered Nursing, there are nearly 500,000 actively registered nurses (RNs) in the state. In September of 2020, Governor Gavin Newsom signed a law—California Assembly Bill 890—which has important implications for Nurse Practitioners and their employers. Here, our Bay Area business attorney for nurses explains the key things that you need to know about AB 890.

An Overview of California Assembly Bill 890 (AB 890)

AB 890 is a California state law that is designed to grant Nurse Practitioners additional autonomy to provide services to patients. The law creates two new categories of nursing professionals:

103 NP (Cal. Bus. & Prof. Code § 2837.103): A Nurse Practitioner who can work in a group setting with at least one physician present.
104 NP (Cal. Bus. & Prof. Code § 2837.104): A Nurse Practitioner who can work independently in certain circumstances.

In other words, Bill AB 890 gives Nurse Practitioners in California who meet pre-established professional requirements more authority to practice independently.

Bill AB 890 Imposes Peer Review Reporting Requirements on Many Nurses

Beyond granting additional autonomy to qualified Nurse Practitioners, AB 890 includes a provision that requires these professionals to adhere to the peer review reporting requirements outlined in Section 805 of California law. The bill amends the definition of the statutory term “licentiate” to include nurses. In effect, this means that some mandatory reporting requirements are triggered when a nurse faces professional disciplinary action.

Many Nurses Have Questions About AB 890—Our Legal Team Can Help

If you are a nurse who has questions about the implications of CA Assembly Bill 890, you are certainly not alone. It is a complex piece of legislation. Despite being signed into law more than two years ago, many questions surrounding its interpretation remain, because AB 890 only took full effect on January 1st, 2023. Our law firm provides legal guidance to nurses. Some common questions that you may have include:

What types of training are required for Nurse Practitioners to gain additional autonomy to practice independently under AB 890?
What additional types of practice are available to Nurse Practitioners since AB 890 has taken effect?
How can Nurse Practitioners who have opened their own practice take advantage of new opportunities to provide care while ensuring full AB 890 compliance?
What are some business strategies that NP 104 entrepreneurs can implement to develop and grow their professional practice in the new regulatory environment?
How can Nurse Practitioners in California effectively start the business?

Contact Our California Business Lawyer for Nurses Attorney Today

Lynnette Ariathurai is an experienced business law attorney for nurses, doctors, and other medical professionals. If you have any specific questions or concerns about CA Assembly Bill 890, please do not hesitate to contact us. We provide legal services throughout the Bay Area.

California nursing categories, Nursing practitioners, registered nurses

Updated CA Family Care and Leave Act Impacts Small Businesses

The California Family Rights Act (CFRA) is our state’s counterpart to the federal Family and Medical Leave Act (FMLA). The CFRA provides more expansive protection to employees and, as of January 1st, 2021, the CFRA has been updated and expanded. More small businesses in the Bay Area now have obligations under the statute. In this article, our Fremont employment law attorney for employers provides an overview of the key things small businesses should know about the updated California family care and family leave laws.

Background: An Overview of the CFRA

The CFRA is our state’s primary family care and leave law for employees. Under the CFRA, eligible employees may take up to 12 weeks of job-protected unpaid leave to deal with a qualifying family or medical emergency. The California Department of Fair Housing and Employment emphasizes that the law provides leave for eligible workers to “care for their own serious health condition or a family member with a serious health condition, or to bond with a new child.”

Dramatic Expansion of CFRA—It Now Applies to Many Small Employers

Recent legislation has changed the scope of the family care and medical leave laws in California. Effective as of January 1st, 2021, many more small businesses are covered by the CFRA. Here are five key things that all small business owners in the Bay Area need to know about the law:

Five or more employees: The CFRA applies to all businesses and organizations with five or more total employees. Only employers with four or fewer workers are exempt from coverage.
Executives are employees: The CFRA clearly states that executives and officers are counted as employees.
No more 75 mile radius: The 75 mile radius requirement—which still counted for the federal FMLA—is no longer an element in the CFRA. It doesn’t matter where employees are located. As more and more workers began to work remotely, California removed the 75 mile radius requirement.
No exception for employers based outside of CA: The CFRA counts all employees—regardless of state. Further, there is no exception to the law for employers based outside of California. If you have an employee in California and you have five or more total workers nationwide, that California employee is covered by the CFRA.
“Family member” is broader: Finally, the term “family member” has been dramatically expanded to include more people. A worker may now be able to take unpaid, job-protected leave to care for an adult child, a sibling, or a grandparent.

Small Businesses Must Ensure that their Employee Handbook is Updated

All small businesses in California should review and, if necessary, revise their employee handbook and/or any other materials that they provide to staff. As the reformed CFRA applies to many more small businesses, it is possible that some companies or organizations are using outdated materials that improperly state that they are not covered by the CFRA. Small businesses can consult with an employment lawyer for employers to ensure that their handbook is fully compliant with the January 1st, 2021 revisions to the CFRA.

Get Help from an Employment Lawyer for Employers in California

Lynnette Ariathurai is an experienced employment attorney for employers. If you are a small business owner in Fremont CA, near Newark, or Hayward, East Bay, Milpitas, Union City, San Leandro, Gilroy, San Jose, or Santa Clara with questions about the updated California Family Rights Act (CFRA), we are here to help. Contact us today to set up a confidential initial appointment.

California employment laws, California Family Rights Act, CRFA, family care, family leave, medical leave

Regulatory Compliance for Medical Practices

Health care is a highly regulated industry. It is crucial that all medical practices are in full compliance with applicable federal and state regulations. Any violation could lead to significant problems—potentially even financial sanctions.

Lynnette Ariathurai is an experienced business lawyer for medical practitioners. Attorney Ariathurai helps all types of medical practice with regulatory issues. To set up a confidential consultation with an experienced business attorney, please contact our Fremont law office today.

An Overview of Federal and State Regulations for Medical Practices in California

Moscone-Knox Professional Corporation Act

California has specific rules and regulations in place regarding the formation and ownership of medical practices. Medical practices must be structured as professional corporations (PCs) under the Moscone-Knox Professional Corporation Act. If you have any specific questions about forming or structuring a medical practice in California, an experienced business attorney for doctors, nurses, and medical personnel can help.

Anti-Kickback Laws

There are federal and state laws in place prohibiting “kickbacks” for medical referrals. The federal Anti-Kickback Statute (AKS) and the California Anti-Kickback Statute largely prohibit the offer of anything of value in exchange for a referral for a patient who participates in a federal or state health program.

Stark Law

Also known as the physician self-referral law, the Stark Law is a federal statute that bars physicians from referring patients that receive service paid by Medicare, Medicaid, or another federal health program to an entity with which the physician or their family member has a financial relationship. There are some limited exceptions to the law.

Regulations against Billing Fraud

Both California and the federal government have strict rules and regulations in place for billing fraud. Notably, the Office of Inspector General (OIG) can bring civil charges for health billing fraud even if the conduct is deemed to be accidental. Medical practices need to understand billing regulations, including the California state prohibition on “surprise medical bills.”

Health Insurance Portability and Accountability Act (HIPAA)

The Health Insurance Portability and Accountability Act (HIPAA) requires medical practices to strictly protect the confidentiality of sensitive patient information. It is imperative that all medical practices operating in California have a well-developed system in place for protecting the privacy of patient records.

Sharing Office Space

It is not uncommon for medical practices—especially smaller medical practices—to share office space. Such an arrangement can be advantageous for all parties involved. Though, in doing so, medical practices must ensure that their conduct is consistent with their lease. A violation of the lease for improper share could lead to problems. Medical practices also need to ensure that patient records are protected as required by HIPAA. In 2019, the Centers for Medicare and Medicaid Services (CMS) released draft guidelines on medical practice share space arrangement. A key principle is that each medical practice should keep its business clearly separate and that proper disclosures should be made to patients.

Get Help from a California Business Lawyer for Medical Practices

Lynnette Ariathurai is a Bay Area business law attorney committed to providing forward-looking legal advice and cost-effective solutions for medical practices in Fremont CA, near Newark, or Hayward, East Bay, Milpitas, Union City, San Leandro, Gilroy, San Jose, or Santa Clara. If you have any questions about regulatory compliance for medical practices, please contact our Fremont office for a strictly confidential consultation.

health billing regulations, health care regulations, HIPAA, medical practice regulations, structuring a medical practice

Importance of Having an Attorney Advise During the Formation of an LLC

Making the decision to start up a new business is exciting. You can build something of real value to support yourself, your family, and your community. A limited liability company (LLC) is a flexible, cost effective legal structure for many different types of businesses. As forming any type of new business can be complicated, it is best to seek guidance from an experienced attorney who can help you put the right foundation in place. Here, our Fremont business formation lawyer highlights five considerations that should be addressed during the formation of a limited liability company (LLC).

1. Whether an LLC is the proper form (eligibility, needs, etc.)

A limited liability company is a popular way to set up a business. As explained by the California Secretary of State, an LLC “offers liability protection similar to that of a corporation, but is taxed differently.” It combines some of the core advantages of a corporation and a partnership. That being said, an LLC is not the right form for every type of business. Some companies are better served by a different legal structure. Further, certain types of businesses in California—such as a medical, dental, or nursing practice—cannot be set up as an LLC. An attorney will help you determine whether an LLC is the right form.

2. Selection of State for your limited liability company

When forming an LLC, you also need to decide where you are going to set it up. You may or may not want to make California the home state of your LLC. In some circumstances, setting up an LLC in a different jurisdiction—such as Delaware or Nevada—offers real advantages. In other cases, setting up an LLC outside of California adds complexity with no tangible benefit. A business formation lawyer can help you choose the right state.

3. The applicability of liability protection

One of the central advantages of an LLC is that it offers liability protection. Simply described, an LLC helps to ensure that the members will not be held personally liable for the debts incurred by the business. Of course, the liability protection associated with an LLC is situation-dependent. It may not, by itself, offer adequate liability protection. Additional precautions may be required.

4. Drafting and negotiating an operating agreement

Every LLC should have a written operating agreement. While LLCs doing business in California are regulated by California law, the reality is that many of your personal rights and responsibilities related to the business will be derived from your operating agreement. An operating agreement for an LLC should always be negotiated, drafted, and reviewed by an experienced business formation attorney.

5. Compliance with ongoing requirements for LLCs

Finally, it is important to remember that LLCs must comply with certain ongoing legal requirements in California. In setting up an LLC, an experienced California business attorney can help you understand the ongoing and future requirements so that you are in the best position to comply.

Get Help from Our California Business Formation Attorney Today

Lynnette Ariathurai is an experienced business formation attorney. If you have any specific questions about setting up a limited liability company (LLC), we are here to help. Contact us today to arrange a confidential consultation. We provide business law services throughout the Bay Area.

business formation, business formation attorney, business structure, limited liability company, LLC formation