8 ms·

This law hurts freelancers so much especially those that want to be freelancers. If you decide you want to go down the route of LLC in California then you have

This law hurts freelancers so much especially those that want to be freelancers. If you decide you want to go down the route of LLC in California then you have to pay the yearly $800 dollar tax. To be honest I wonder if there should be three designations for modern employment: full time, contractor and gig worker.

novok 6y ago
TBH there shouldn't be a distinction between the two is the real issue. Everyone can get workers comp, unemployment insurance, social security and a national healthcare plan and all the kvetching about IC or Employee becomes near irrelevant.
microcolonel 6y ago
Woah, you have to pay $800/yr to keep an LLC in California? What for?
- jassmith87 6y ago
  You might not make any money and then California wouldn't get any money!
  - jesselawson 6y ago
    California's FTB charges $800 minimum annually regardless of whether you made a profit or not.
- manquer 6y ago
  Various fillings you need to do. While different states have different requirements and fees . It will not cost zero anywhere . While it looks high, if the biz cannot afford the $800 fees annually then perhaps LLC is the not the structure for it ? LLC come with many requirements for corporate governance and accounting this typically means you need accountants and lawyers and they cost lot more than $800 .
  - jccooper 6y ago
    It has nothing to do with filings. It costs the state next to nothing. It's a very-slightly-disguised franchise tax, on top of their actual franchise tax if you make any money. There are 9 states with no annual LLC fees. And almost all of the rest are $50 or under. LLCs have almost no requirements for corporate governance. That's why they're attractive.
    - manquer 6y ago
      Compared to public company LLC have less requirements yes. Howver you still need a board and resolutions and you have submit your LLC annual returns have seperate bank accounts at the minimum. None of that is required for a sole proprietor. > costs the state next to nothing How are you concluding this ? Cost to the state is just not storing few bits somewhere . Even just applications they have to build maintain those bits will cost the state a lot of money. The non tech part of the government which needs your data. every bank , credit worthiness, every other biz which needs to work with you, every dept that needs to regulate what you do , every small biz schemes you would like to benefit from. Healthcare, employee taxes, courts etc .... All of these reference your corporate entity "ID" the government needs to maintain and service them. Heck even apple will ask your DUNS number when you register non personal developer account. It may or may not cost $800, but it certainly isnt next to nothing. other states maybe absorbing the costs and are trying to attract new biz, doesn't mean that california has to be cheap too. Like I said there are other entity structures which are cheaper and designed for businesses that cannot afford 800 dollars a year in filing fee.
      - dingaling 6y ago
        > Heck even apple will ask your DUNS number That's a great example; after paying the annual $800 fee an LLC then has to go to a private entity, Dun & Bradstreet, to get a unique identifier...
      - adventured 6y ago
        > Howver you still need a board and resolutions and you have submit your LLC annual returns have seperate bank accounts at the minimum. LLCs do not need to have boards. If you're going to operate a simple single member LLC for example, there is typically no great reason to have a board. https://info.legalzoom.com/article/does-llc-have-board-directors https://info.legalzoom.com/article/does-llc-have-board-direc... https://smallbusiness.chron.com/singlemember-llc-need-board-directors-55403.html https://smallbusiness.chron.com/singlemember-llc-need-board-...
- pessimizer 6y ago
  For the limited liability that you're granted by the state government. If there's no benefit to having an LLC, you shouldn't pay the fee.
SamReidHughes 6y ago
The LLC route doesn't actually do anything to work around AB5 (compared to having your business licenses in order as a sole proprietor), except socially to convince people it's legally safe to buy your services.

novok 6y ago

TBH there shouldn't be a distinction between the two is the real issue. Everyone can get workers comp, unemployment insurance, social security and a national healthcare plan and all the kvetching about IC or Employee becomes near irrelevant.

microcolonel 6y ago

Woah, you have to pay $800/yr to keep an LLC in California? What for?

jassmith87 6y ago
You might not make any money and then California wouldn't get any money!
- jesselawson 6y ago
  California's FTB charges $800 minimum annually regardless of whether you made a profit or not.
manquer 6y ago
Various fillings you need to do. While different states have different requirements and fees . It will not cost zero anywhere . While it looks high, if the biz cannot afford the $800 fees annually then perhaps LLC is the not the structure for it ? LLC come with many requirements for corporate governance and accounting this typically means you need accountants and lawyers and they cost lot more than $800 .
- jccooper 6y ago
  It has nothing to do with filings. It costs the state next to nothing. It's a very-slightly-disguised franchise tax, on top of their actual franchise tax if you make any money. There are 9 states with no annual LLC fees. And almost all of the rest are $50 or under. LLCs have almost no requirements for corporate governance. That's why they're attractive.
  - manquer 6y ago
    Compared to public company LLC have less requirements yes. Howver you still need a board and resolutions and you have submit your LLC annual returns have seperate bank accounts at the minimum. None of that is required for a sole proprietor. > costs the state next to nothing How are you concluding this ? Cost to the state is just not storing few bits somewhere . Even just applications they have to build maintain those bits will cost the state a lot of money. The non tech part of the government which needs your data. every bank , credit worthiness, every other biz which needs to work with you, every dept that needs to regulate what you do , every small biz schemes you would like to benefit from. Healthcare, employee taxes, courts etc .... All of these reference your corporate entity "ID" the government needs to maintain and service them. Heck even apple will ask your DUNS number when you register non personal developer account. It may or may not cost $800, but it certainly isnt next to nothing. other states maybe absorbing the costs and are trying to attract new biz, doesn't mean that california has to be cheap too. Like I said there are other entity structures which are cheaper and designed for businesses that cannot afford 800 dollars a year in filing fee.
    - dingaling 6y ago
      > Heck even apple will ask your DUNS number That's a great example; after paying the annual $800 fee an LLC then has to go to a private entity, Dun & Bradstreet, to get a unique identifier...
    - adventured 6y ago
      > Howver you still need a board and resolutions and you have submit your LLC annual returns have seperate bank accounts at the minimum. LLCs do not need to have boards. If you're going to operate a simple single member LLC for example, there is typically no great reason to have a board. https://info.legalzoom.com/article/does-llc-have-board-directors https://info.legalzoom.com/article/does-llc-have-board-direc... https://smallbusiness.chron.com/singlemember-llc-need-board-directors-55403.html https://smallbusiness.chron.com/singlemember-llc-need-board-...
pessimizer 6y ago
For the limited liability that you're granted by the state government. If there's no benefit to having an LLC, you shouldn't pay the fee.

SamReidHughes 6y ago

The LLC route doesn't actually do anything to work around AB5 (compared to having your business licenses in order as a sole proprietor), except socially to convince people it's legally safe to buy your services.