California C Corp: Everything You Need to Know
A California C corp is a particular type of business entity, also called a C corporation, formed in the state of California. 3 min read
A California C corp is a particular type of business entity, also called a C corporation, formed in the state of California. As the default business structure for companies in California, C corps are the most common.
How to Form a California C Corp
The requirements for starting a C corp vary from state to state. However, you'll need to follow these basic steps:
- Choose a name for the C corp and reserve it through the California secretary of state (SOS) website.
- File articles of incorporation.
- Choose a registered agent.
- Obtain an Employer Identification Number (EIN).
- Check the California SOS website to see what additional requirements there are for C corporations formed in the state and be sure to comply.
Failure to form your California C corporation properly could result in the dissolution of the company or the loss of liability protection.
California C Corp Basic Requirements
The basic requirements for a C corp formed in California are as follows:
- C corporations need to have a minimum of three directors if corporate shares have to be distributed. If shares have not been distributed or the corporation only has one or two shareholders, then you'll only need one or two directors.
- There is no age requirement for corporate directors.
- Directors do not need to be California residents.
- Your corporate directors should be named in the company's bylaws or articles of incorporation.
- State the number of your corporation's directors in either your bylaws or your business's articles of incorporation.
- There is no limit for the number of shareholders allowed in a C corp.
- Shareholders of a C corp can be individuals or other business entities and do not need to be U.S. citizens or residents.
California Corporate Name
You'll want to choose an entirely unique name for your company and be sure that it follows the requirements of the state:
- The name cannot be the same as or similar to any other registered business names in the state.
- The name must be understandable and straightforward. You'll want it to accurately represent your business. For instance, you can't name your company "Ben's Ice Cream Shop" if you are actually a hair salon.
- The company name must include the word “Corporation,” “Company,” “Incorporated,” “Limited,” or an abbreviated version of the word.
You can head to the California Secretary of State website to find out if the name you want is available for use.
If you find the name you want to use is available, you can reserve it for up to 60 days by filling out a form and paying $10 to be sure no one else takes it while you're getting the company started.
California Articles of Incorporation
The articles of incorporation for your company will need to be filed with the SOS to start up the business.
California articles of incorporation must include the following information:
- The number of shares the corporation plans to issue (must be greater than zero)
- Available classes of stock
- Corporate office address.
You'll also be required to pay a $100 fee for filing these documents via mail or in person at the SOS office.
A statement of information must be sent to the California Department of State up to 90 days after you've filed the company's articles of organization. This statement will need to be filed annually within the same month the company was formed to maintain a status of good standing with the state.
California Registered Agent
California C corps are required to choose a registered agent to receive any official documents on behalf of the business. This could include the following types of correspondence:
- Legal documents (warrants, service of process, etc.)
- Tax documents
- Government notices.
The registered agent will need to be available during regular business hours every day of the week, so that no important documents are missed. This agent's name and address must also be included in the articles of incorporation.
Corporations cannot be their own registered agents, and these individuals or companies must have a physical street address in California (no P.O. boxes).
All California C corps are required to obtain an Employer Identification Number (EIN). This is like a social security number for the company. It will be necessary for tax documents and opening a business bank account. A business owner can register for an EIN online or via mail.
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