AHD-LEGAL-001 — LLC Formation Package
Avina Home Detox LLC Status: DRAFT v0.1 Date: 24/04/2026 Owner: Kelly Mortazavi (Sole Member-Manager) + Elizabeth Mortazavi (Minority Equity Member) Counsel: Pending (see AHD-COUNSEL-SHORTLIST-v0.1)
1. Entity Summary
| Item | Detail |
|---|---|
| Legal name | Avina Home Detox LLC |
| Trade name (DBA) | AVINA HOME DETOX |
| State of formation | California |
| Filing type | Limited Liability Company |
| Tax classification | LLC taxed as S-Corp (election filed Form 2553) |
| Parent | Avina Wellness LLC (sole member at formation, with member admission of Elizabeth Mortazavi as minority equity holder per Operating Agreement) |
| Fiscal year | Calendar year |
| Registered agent | Northwest Registered Agent (CA) — $125/yr |
| Principal office | TBC (Kelly’s LA business address; Mercury Bank physical card link) |
| EIN | To be obtained on filing |
2. Articles of Organization (Form LLC-1, California Secretary of State)
Filing fee: $70 (with optional $350 24-hour expedite).
Required fields:
- LLC Name: Avina Home Detox LLC
- Business Address: [Kelly’s LA address — to be confirmed]
- Service of Process Agent: Northwest Registered Agent
- Management: One Manager (Kelly Mortazavi)
- Purpose: “The purpose of the limited liability company is to engage in any lawful act or activity for which a limited liability company may be organized under the California Revised Uniform Limited Liability Company Act.”
Filing route: California SOS bizfileOnline portal. Same-day filing if expedited. 5-7 business days standard.
3. Statement of Information (Form LLC-12)
Filed within 90 days of formation, then every two years.
Filing fee: $20.
Includes: business address, mailing address, agent for service, type of business (“Medical detoxification and IV therapy services delivered in residence; coordinated through licensed clinicians”), names and addresses of manager(s).
4. Operating Agreement — Key Terms
NOTE: This is a working draft to be finalised by healthcare regulatory counsel. The terms below capture intent.
4.1 Members
| Member | Initial Capital | Equity % | Role |
|---|---|---|---|
| Avina Wellness LLC | $100,000 cash + sweat | 80% | Parent company; founding capital |
| Elizabeth Mortazavi MD | $0 cash + sweat (CMO services) | 20% (vested over 3 years, 4-year cliff) | Founding Medical Director |
Vesting: Elizabeth’s 20% vests 25% on the first anniversary of formation, then quarterly over the following three years. Cliff applies to all years.
4.2 Management
- Sole Manager: Kelly Mortazavi.
- Day-to-day: Manager has full authority over operations, hiring, contracts, banking, vendor selection.
- Reserved for member vote (unanimous): dissolution, sale of substantially all assets, admission of new equity members, capital calls in excess of $50K, debt financing in excess of $250K, related-party transactions in excess of $25K/yr.
4.3 Distributions
- Tax distributions made quarterly to cover member tax liability on allocated income.
- Profit distributions made at the discretion of the Manager, after working-capital reserves of 90 days operating expenses are met.
4.4 Transfer Restrictions
- No member may transfer their interest without unanimous consent of other members.
- Right of first refusal to remaining members on any proposed transfer.
- Drag-along on a sale of 100% of the company.
- Tag-along on a sale of more than 50%.
4.5 Indemnification
- Members and the Manager are indemnified by the LLC for actions taken in good faith in the course of LLC business.
- Standard exclusions: gross negligence, willful misconduct, criminal acts, breach of fiduciary duty.
4.6 Dispute Resolution
- Mediation in Los Angeles County first.
- Then binding arbitration under JAMS streamlined rules.
- Governing law: California.
4.7 Term
- Perpetual until dissolved by unanimous member vote or by operation of law.
5. S-Corp Election (Form 2553)
Filed within 75 days of formation.
Reasoning: Pass-through taxation with the ability for members who actively work in the business (Kelly, Elizabeth) to take a portion as W-2 salary and a portion as distribution, reducing self-employment tax exposure. Optimal once revenue exceeds ~$150K.
Reasonable comp baseline: Kelly $80K W-2 (and remainder as distribution); Elizabeth $80K W-2 once full-time engaged.
6. Initial Capitalization
| Source | Amount | Form |
|---|---|---|
| Avina Wellness LLC capital contribution | $100,000 | Cash, deposited at formation |
| Elizabeth Mortazavi services contribution | sweat equity (4-year vest) | Non-cash |
Banking: Mercury (recommended) or Chase Business Complete.
7. Compliance Filings — Stand-Up Calendar
| Filing | Due | Cost |
|---|---|---|
| Form LLC-1 (Articles of Organization) | Day 1 | $70 + $350 expedite |
| EIN application (IRS Form SS-4) | Day 1-2 | $0 |
| Form 2553 (S-Corp election) | Within 75 days | $0 |
| Form LLC-12 (Statement of Information) | Within 90 days | $20 |
| CA Franchise Tax Board $800 minimum tax | First filing year | $800 |
| CA seller’s permit (if applicable to medical supplies resale) | Pre-launch | $0 |
| Local business license (Los Angeles) | Pre-launch | $50-200 |
| Workers’ comp insurance (1099 only Y1, but file exempt) | At first hire | $0 if exempt |
| State licensure (separate file: see AHD-REGULATORY-MAP-v0.1) | Day 1 | per state |
8. Banking Setup
Recommended: Mercury (mercury.com).
Why: No monthly fees. API for accounting integration. Strong UX for venture-funded LLCs. FDIC insured to $5M via partnership with Choice Financial.
Open with: Articles of Organization, EIN, Operating Agreement, Kelly’s photo ID. Online application, ~15 min, funded same-day on approval.
Cards: Founder card to Kelly. Virtual cards for clinical supplies and software subscriptions.
9. Inter-Company Agreement — Avina Wellness LLC ↔︎ Avina Home Detox LLC
A short inter-company services agreement is signed at formation:
- Shared services Avina Wellness provides to AHD: brand assets (sub-brand wordmark, photography, sonic motif, identity volume), website hosting infrastructure, marketing strategy, principal-level GTM relationships.
- Cost: AHD pays Avina Wellness LLC a flat services fee of $5,000/quarter Y1, scaling to $15,000/quarter Y2, against actual cost recovery.
- Term: Perpetual until terminated with 90 days notice.
This protects against IRS related-party transaction scrutiny and clarifies cost flow between entities.
10. Open Items for Counsel
- Multi-jurisdiction structure. Should AHD form additional state-specific subsidiaries for NY and FL operations, or operate under foreign-qualification of the CA LLC?
- Equity vesting acceleration triggers. Single-trigger or double-trigger on change of control?
- Reasonable comp formal study. Required for the S-Corp election to withstand IRS scrutiny.
- Liability isolation. Confirm that Avina Wellness LLC’s 80% ownership is structured to avoid piercing the corporate veil between AHD clinical risk and Avina Wellness operating risk.
- NDA cascade enforceability. Confirm CA enforcement of NDAs against 1099 contractors (CA is hostile to non-competes; NDAs are different but worth a precise look).
11. Filing Sequence (One Day)
- Reserve LLC name on CA SOS website ($10, optional but recommended).
- File LLC-1 Articles of Organization with $70 + $350 expedite ($420 total).
- Same day: receive filed Articles, file SS-4 for EIN online (instant).
- Open Mercury bank account online.
- Engage counsel via signed letter (see counsel shortlist).
- Counsel drafts and finalises Operating Agreement, S-Corp election, inter-company services agreement.
- Members execute Operating Agreement.
- File Form 2553 within 75 days.
- File LLC-12 within 90 days.
Total filing cost (excluding counsel): ~$1,500 in Y1.
End of v0.1.