In addition to the expenses you’ll incur for forming your corporation or LLC, there will be a number of expenses you should take into consideration when weighing the pros and cons of operating from an entity. Here’s a short list: an additional tax return (CPA fees), $800 minimum to the California Franchise Tax Board (regardless of the level of revenue or profit), possible payroll service (in the case of a corporation), annual filing with the Secretary of State (biannual for an LLC), and for a corporation the costs for the preparation of annual minutes (aka resolutions, consents, minutes). So the decision to put your business into a corporation or LLC should be made based on comparing the pros of limited liability and possible tax benefits against the costs and time spent in keeping the corporation or LLC compliant. Also, keep in mind that the costs may increase depending on the nature of the business you’re conducting. For example, lawyers are also required to register their corporation with the California State Bar, for a fee.