Small Business
A year-end checklist for California business owners
· 7 min read · Victoria Martin, Attorney
Entity structure, retirement plan design, CalSavers, and the state-specific items owners tend to discover a year too late.
California adds a layer to nearly every planning decision a business owner makes. The federal strategy may be sound and still leave money on the table once franchise tax, LLC fees, and state retirement mandates are considered.
Revisit the entity
Entity choice made at formation is rarely the right one five years and several hundred thousand dollars of revenue later. The annual franchise tax minimum and the LLC gross receipts fee should be part of that conversation, alongside payroll and distribution planning.
Get the retirement plan right
CalSavers applies broadly to employers without a qualified plan. Owners who would rather direct those dollars into a plan they design — a 401(k) with profit sharing, or a cash balance plan for higher earners — generally save more tax and keep more control.
Document the succession
A buy-sell agreement without funding is a wish. Reviewing valuation language, funding source, and the tax treatment of the transfer keeps the business from becoming the family's largest illiquid problem.
This material is for informational purposes only and is not intended as tax, legal, or individualized investment advice. Please consult your own professionals regarding your specific situation.