Owning a company (LLC) and collecting unemployment in CA
(Los Angeles, CA, USA)
I am considering forming an LLC. I am aware that California will deny unemployment benefits if you are not working but own a company.
My question is, if I form the LLC in another state, e.g. Nevada, does this shield me from being denied in California?
I very much want to start my LLC, and know it will take some time before I'm making any money from it. In the meantime I have to work my day job, and the industry I'm in is very sporadic with work... so it's important that I remain eligible for unemployment.
Your assumption that they will deny you for just owning a company makes no sense to me.
I think the denial would be based on the fact that you are either earning money from the company .. or you are not able and available for "suitable work" any longer because you are self employed.
You said you are currently employed .. they can't keep you from benefits which you would be entitled to if you are able and available for suitable work, looking for it, and not receiving any money from a new LLC.
The issue I believe would be one of your availability for new work.
Whether it would be beneficial to open the LLC in Nevada .. I don't know .. ask a lawyer
I realize CA exempt Corporate officers and majority shareholders, but that's from "covered employment". You would still have to be paid something or limiting your availability for other work. See Coverage
At least that's what I think. If you've found a CA unemployment statute which blows my theory out of the water please copy and paste it here.
If anything .. the LLC should be seen as a part-time job. At least that what you've described.
I think it would be beneficial to form the LLC while still employed. You then have proof that you did both concurrently.