1. Incorporate a California Corporation
2. Why Incorporate in California?
3. How to Form a Corporation in California

If you're looking to register a California corporation, the first step in doing so is to select a name.

Incorporate a California Corporation

A good step to securing your business' future is to incorporate it. Many people don't realize that they have a choice as to where they form their business. Incorporating in California provides many benefits to business owners. Additionally, you don't need to be physically located in California in order to incorporate there.

Why Incorporate in California?

Incorporating your business in California provides you with:

  • The protection of your personal assets
  • A professional presentation
  • The opportunity to grow your business

There are many reasons to incorporate outside of your home state and in California, these include:

  • A thriving business environment that provides significant benefits
  •  Management flexibility
    • The state requires only three officer positions (they can all be the same person)
  •  Anonymity to management and shareholders
    • Only the resident agent(s) and director(s) need to be disclosed
  •  California's corporate tax rate is 9%

How to Form a Corporation in California

The steps below describe the process in forming a corporation in California:

  1. Select a name
    • The name must be unique
    • The name cannot be misleading
    • Complimentary name availability is provided by the California Secretary of State's (SOS) office in Sacramento
    • You're able to reserve a name for up to 60 days by completing the Name Reservation Request Form with the SOS and paying a $10 fee
  2. Create and file the Articles of Incorporation
    • Your business is officially incorporated when the Articles of Corporation are filed with the SOS
    • The Articles of Incorporation include the:
      • Name of the business
      • Purpose
      • Registered agent's name
      • Street address
      • Total number of shares being issued
      • Signature of all incorporators
    • The fee to file is $100
    • The articles need to filed in person or by mail
  3. Assign a registered agent
    • It is required for all corporations to have a registered agent
    • A registered agent can be either another corporation or an individual that accepts legal document on behalf of the corporation
    • A corporation may not be its own registered agent
  4. Create a corporate records book
    • The corporate record book should include the:
      • Meeting minutes for both the shareholders and directors
      • Stock certificates
      • Stubs of the stock certificates
    • The corporate record book should be kept at the company's headquarters
  5. Create corporate bylaws
    • The bylaws should outline the basic rules for the operations
    • They do not need to be filed with the state
    • They should be kept at the company's headquarters
    • They need to specify the maximum or minimum number of directors and specify the total number currently presiding
  6. Determine who will be the incorporators
    • The names of the incorporators, or the people applying, needs to be provided
    • The incorporators are in charge of creating and filing the Articles of Incorporation
    • After filing the Articles of Incorporation, the final step for the incorporators is to select directors
  7. Assign the initial corporate directors
    • The incorporators decide who will be a part of the board of directors (at least until the first annual meeting)
    • The names and addresses of the directors needs to be logged in the corporate records book
    • The directors' main responsibility is designing and implementing corporate policy
    • Directors must act in the best interest of the shareholders
  8. Have the first board of directors meeting
    • The meeting should include:
      • Appointing officers
      • Adopting bylaws
      • Assigning a corporate bank
      • Issuing stock
      • Assigning the fiscal year
  9. Issue stock
    • Issue stock to all shareholders
    • Most states do not require corporations to issue paper stock certificates
    • The contact information of each shareholder should be entered into the corporation's stock transfer ledger
  10. Adhere to California's tax requirements
    • Corporations doing business in California are required to pay taxes to the California Franchise Tax Board
    • A $800 minimum tax is required on a quarterly basis except for the first year when it's measured based on net income
  11. Adhere to all other regulatory and tax requirements
    • A federal employee identification number (FEIN) must be obtained with the IRS
    • A business license or licenses may need to be acquired
  12. Prepare and file a Statement of Information
    • Within 90 days after filing the Articles of Incorporation, and every year thereafter, a Statement of Information must be filed with the SOS
  13. If you're a foreign corporation, make sure to register with the SOS
    • All corporations organized outside of California must register with the SOS

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