Can You Form LLC for Insurance Agency in CA?

[x-Alex]

I am starting an indy agency in CA P/C market and am trying to decide on LLC vs S-Corp. I will have a partner to start with and hopefully we'll have employees down the road.

I was going over Form LLC-1, which is Articles of Organisation for LLC in CA and it states the following:

Enter the name of the limited liability company. The name must end with the words “Limited Liability Company,” or the
abbreviations “LLC” or “L.L.C.” The words “Limited” and “Company” may be abbreviated to “Ltd.” and “Co.,” respectively.
The name of the limited liability company may not contain the words “bank,” “trust,” “trustee,” “incorporated,” “inc.,”
“corporation,” or “corp.,” and must not contain the words “insurer” or “insurance company” or any other words suggesting
that it is in the business of issuing policies of insurance and assuming insurance risks.

Has anybody done LLC's in CA for insurance? What is in your opinion better, LLC or some other form of business structure? Keep in mind that I'm going with a partner in this endeavor. Thank you.

 

[Mr. Bill]

Regardless of state, you really ought to discuss it with a CPA. Whether you can or cannot is really not that important. It's the impact of your decision short- and long-term that is meaningful.

Also, whenever you think of going into business with a "partner", have the EXIT strategy in place BEFORE you start it! I cannot emphasize this enough....

Good luck!

 

[GreenSky]

I have an LLC. It must be clear that it's an agency, not an insurer (or company).

No issue whatsoever. Green Sky Insurance Services, LLC.

By the way, it's the same with a DBA. The CA DOI wouldn't let me have Green Sky Insurance; I was told to add either "agency" or "services."

Rick

 

[Mr_Ed]

I have an LLC. It must be clear that it's an agency, not an insurer (or company).

No issue whatsoever. Green Sky Insurance Services, LLC.

By the way, it's the same with a DBA. The CA DOI wouldn't let me have Green Sky Insurance; I was told to add either "agency" or "services."

Rick

ditto to what Rick said.

 

[x-Alex]

Thanks guys. I also thought it referred to an insurance carrier but not to an agency/brokerage. Good that you confirmed that.

Totally agree on the partner aspect.

 

[moeasadi]

I formed LLC for my agency 3 yrs ago and mine is a single member LLC. You can do Corporation LLC that will cost another $800/yr if your LLC has more than one member.It's better to consult with your Tax adviser first.