How to File California Articles of Incorporation

Your Guide to Incorporating in California

A hand stamping documents

California articles of incorporation are filed to create a corporation. This guide provides instructions and tips when preparing and filing this legal document.

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Overview

Preparing and filing your articles of incorporation is the first step in starting your business or nonprofit corporation. Approval of this document secures your corporate name and creates the legal entity of the corporation. Only after this approval can the corporation apply for tax IDs, obtain business licenses, sign contracts, and otherwise conduct business.

Incorporating provides many important benefits:

  • Limits the liability of directors, officers, and shareholders
  • Fulfills statutory requirements to register your business’s or organization’s name
  • Provides governance and adds credibility to the business or organization

Note that as of January 1, 2013, new legal requirements apply to incorporation documents filed with the California Secretary of State’s office. This guide is written in June 2013, taking into account these recent changes and subsequent guidance issued from the department.

How to Incorporate

The California Secretary of State requires a minimum amount of information on your articles of incorporation and will approve your articles if this minimum information is present. Many people attempt to file their articles of incorporation themselves because the state forms appear to be straightforward. Non-professionals commit a variety of common errors. Take adequate time to learn about filing before filing.

“Many documents cannot be filed because of name issues, errors, omissions or misstatements contained in the proposed filings submitted to this office.” California Secretary of State

Beyond the minimum requirements to obtain approval of the articles of incorporation by the California Secretary of State, additional information may be required by other government agencies. For example, the IRS requires certain additional provisions for 501(c)(3) eligibility. Obtaining state tax exemptions or licenses may require further provisions. Banks may require additional provisions providing information about the directors and officers.

We can’t emphasize enough - take the time to learn the instructions and get your corporation set up correctly the first time. It is a lot easier than fixing mistakes later on. Hiring an attorney to file your articles of incorporation is not required. You can file the articles of incorporation yourself or purchase our incorporation packages.

Quick Facts

Who should incorporate?
- General stock corporations
- Close corporations
- Professional corporations
- Nonmutual benefit corporations
- Nonprofit public benefit corporations
- Nonprofit religious corporations
- Common interest development (CID) corporations

Is an attorney required?
No, using an attorney is not required. You can file yourself or we can help.

What does it cost to incorporate?
California charges $100 to process your stock, close, or professional articles of incorporation and $30 for nonprofit or CID articles of incorporation.
*Most California corporations are subject to an $800 minimum annual franchise tax.

How long does the process take?
See current state processing times, which vary based on when the request is submitted, received, and the state’s workload. California offers pre-clearance, special handling, and expedited services.

Business Corporations

How to File Articles of Incorporation for a California For-Profit Corporation


California offers three corporate structures for for-profit corporations. Each structure is based on different statutes and, correspondingly, the Secretary of State expects slightly different information filed in the articles for each.

General Stock
The most typical type of for-profit corporation is a general stock corporation. This type of corporation issues stock to shareholders who invest in the corporation in anticipation of profit.
Close
A close corporation is usually held by an individual, family, or several private parties.
Professional
A professional corporation is intended for a specific professional purpose such as medicine or law.

Required Provisions

Articles of incorporation include the information listed below. Please note that certain information is noted as applying to specific structures.

1 Name

Your corporate name must not be the same or too similar to other active business names on record with the California Secretary of State. When you contact California for corporate name availability, it is checked only against all other corporate entities in California. Yet ultimately, your articles will not be approved unless your name is distinguishable from all other active registered names including domestic and foreign LLCs and LPs. Also consider conflicts with trademark or service mark registrations or with fictitious business names (filed with the county). Conduct a thorough name availability check before filing your articles of incorporation.

Include a corporate designator:

  • General stock corporation corporate names must include the corporate suffix “corporation”, “incorporated”, “incorporation”, “company”, “limited”, or a similar abbreviation.
  • California professional corporations may use suffixes “professional corporation”, “prof corp”, “P.C.”, or “PC”. Some California professional boards and agencies do not permit certain professions to be organized as corporations. Also check with the board or agency for their name-style requirements of the corporate name.
  • Close corporations must use the suffix “corporation”, “incorporated”, “limited”, or a similar abbreviation.

Restricted words are considered misleading to the public if they do not accurately represent the business, such as “department”, “agency”, “assurance”, and “surety”.

2 Purpose of the corporation

A statement of corporate purpose is required. California permits and encourages a general declaration that the purpose of the corporation is any lawful business. Professional corporations must declare the specific profession in which the corporation is engaged.

3 Agent for service of process

You are required to declare your agent for service of process on your California articles of incorporation. The agent is the individual or company that will receive service of process (notice of a lawsuit) and other official legal or government documents for the business. Only one agent may be listed. You may use an individual or an approved corporation.

  • Individual: You may declare any resident of California who agrees to serve as your agent for service of process. The individual may or may not be affiliated with the corporation. List the agent’s name and street address (a P.O. Box is not allowed).
  • Corporation: You may hire a registered agent service to act as your agent for service of process. This corporation must have filed a certificate pursuant to Section 1505. Your corporation cannot act as its own agent. Only list the name of the corporation, not the street address. Consider a registered agent service especially if you have a home office, are regularly out of the office, or wish to have added privacy of keeping your address off the public record
4 Corporate Addresses

Indicate both the principal street address for the business and, if different, the mailing address. The principal street address may not be a P.O. Box.

5 Shares

The number of shares a corporation is authorized to issue must be stated in its California Articles of Incorporation. Do not write “0”. By default, the corporation is only authorized to issue one class of shares of stock. If you wish for the corporation to be authorized to issue more than one class of shares, or if any class of shares has two or more series, California Corporations Code requires such designations in the articles. You may later change the amount of shares authorized by filing an amendment to the articles. Before actually issuing or selling stock to shareholders (after filing the articles of incorporation), the corporation must comply with the Corporate Securities Law of 1968 administered by the California Department of Corporations.

6 Shareholders

Close corporations must designate the number of shareholders authorized, which must be between 1 and 35.

7 Incorporators

Your corporation must have one incorporator and can choose to have more. An incorporator is the individual responsible for executing the articles of incorporation. Each incorporator must provide their name and signature.

Optional Provisions

A Directors

Directors are the individuals elected by the shareholders to oversee the management of the corporation. The Board of Directors elects corporate officers to run the day-to-day operations and make certain decisions for the corporation.

  • If initial directors are named, all initial directors must sign an acknowledgment block along with the articles. Initial directors thereby act as the incorporators.
  • Either the number of directors or a range indicating the minimum and maximum number of directors may be declared. If a range is used, the minimum must be 3 or more and the maximum cannot exceed two times the minimum minus one (e.g. not less than three or more than five).
  • A provision to indemnify and eliminate director liability should be written as simply “The liability of the directors of the corporation for monetary damages shall be eliminated to the fullest extent permissible under California law."
  • Do not include provisions that contradict the California Corporations Code, for example in regards to removal of directors, authority to alter bylaws, or special powers delegated to certain directors.
B Purpose

The articles cannot include any additional statement of purpose except by way of limitation or except as expressly required by law.

C Classes & Series of Shares

As mentioned previously, if more than one class or more than two series of shares are desired, include additional provisions. Specific provisions may be desired to detail rights in redeeming shares or partial redemption of shares.

D Fractional Shares

If your corporation chooses not to issue fractional shares, the California Corporations Code puts forth three options to handle them. You may wish to detail further how fractional shares will be handled, such as paying in cash the “fair value” rather than the “conversion price” of the shares.

E Professional Corporations

As previously mentioned, professional corporations should check with their governing board or agency for additional requirements on the corporate name as well as other requirements or allowances for provisions in the articles. For example, a professional medical corporation may establish the manner in which directors are selected, removed, as well as their powers, duties, and compensation.

F B-Corporations

California recently passed benefit corporation legislation. Benefit corporations are a new class of corporation that are required to create a material positive impact on society and the environment and to meet higher standards of accountability and transparency. Recognition as a B-corporation requires additional provisions in the articles of incorporation and recognition is often reinforced by third-party certification, such as by B Lab.


Supplementary Documents Filed with the Articles of Incorporation

You may need to file one or more of the following:

Consent to use of the name
Substantially similar business names can be obtained if you get a letter of consent from the existing business and file this simultaneously with your articles of incorporation.
Future file date
California will provide the effective date of the incorporation as your documents are filed unless you specifically request a future file date. Include such request in the articles or as an attachment (which are made part of the filed articles).
Copies and certified copies
For a certified copy of the articles of incorporation, include a $5 certification fee.
Pre-Clearance, Drop-Off, and Expedite request
Several options exist for expediting your incorporation:
  • By arranging to drop-off your documents in person (perhaps by courier) along with a $15 state fee, they will receive priority processing.
  • Pre-clearance service only provides a preliminary review of the document by the Secretary of State. Options range from 10-Day Pre-clearance Service for $250 to 24-Hour Pre-clearance Service for $500.
  • Expedited filing service results in the Secretary of State filing or rejecting the document. Options range from 24-hour Filing Service for $350 to 4-Hour Filing Service for $500 (the document must be pre-cleared to be eligible for 4-Hour Filing Service).

Nonprofit Corporations

How to File Articles of Incorporation for a California Nonprofit Corporation


Religious, charitable, social, educational, recreational, or similar purposes are often organized under a California nonprofit corporation. By incorporating, these organizations build support for their cause in a structured way and build records to apply for 501(c) and other tax exemptions.

California offers four corporate structures for nonprofit corporations.

  • Religious corporations are primarily or exclusively for religious purposes such as a church.
  • Public benefit corporations are those seeking IRS exemptions 501(c)(3) or 501(c)(4) and/or similar California state tax exemptions. These organizations are organized for charitable purposes, act as a civic league, or as a social welfare organization.
  • Mutual benefit corporations are other nonprofits that may or may not seek IRS and California tax exemptions. A mutual benefit corporation may not create the impression that the corporate purpose is public, charitable, or religious, nor create the impression that it is a charitable foundation.
  • Mutual benefit common interest development (CID) corporations are formed under the Davis-Stirling Common Interest Development Act to manage a common interest development (for example, a homeowner’s association). Common interest development associations can also be unincorporated.

Required Provisions

Articles of incorporation include the information listed below. Please note that certain information is noted as applying to only specific structures.

1 Name

Your corporate name must not be the same or too similar to other active business names on record with the California Secretary of State. When you contact California for corporate name availability, it is checked only against all other corporate entities in California. Yet ultimately, your articles will not be approved unless your name is distinguishable from all other active registered names including domestic and foreign LLCs and LPs. Also consider conflicts with trademark or service mark registrations or with fictitious business names (filed with the county). Conduct a thorough name availability check before filing your articles of incorporation.

A corporate suffix such as "incorporated" is not required (CCC §5122).

Restricted words are considered misleading to the public if they do not accurately represent the business, such as “department”, “agency”, “assurance”, and “surety”. A nonprofit mutual benefit corporation may not use the words “Charitable Foundation” or “Foundation” at the end of the name or immediately preceding the corporate designator.

2 Purpose of the corporation

A statement of corporate purpose is required. California permits and encourages a general declaration that the purpose of the corporation is any lawful business. Public benefit corporations should indicate if the corporation is organized for public purposes, charitable purposes, or both. Public benefit corporations organized for public purposes must provide a specific purpose statement; those organized for charitable purposes should also list a purpose to qualify for California tax exemptions. CID associations should specifically state “This corporation is an association formed to manage a common interest development under the Davis-Stirling Common Interest Development Act.”

3 Agent for service of process

You are required to declare your agent for service of process on your California articles of incorporation. The agent is the individual or company that will receive service of process (notice of a lawsuit) and other official legal or government documents for the business. Only one agent may be listed. You may use an individual or an approved corporation.

  • Individual: You may declare any resident of California who agrees to serve as your agent for service of process. The individual may or may not be affiliated with the corporation. List the agent’s name and street address (a P.O. Box is not allowed).
  • Corporation: You may hire a registered agent service to act as your agent for service of process. This corporation must have filed a certificate pursuant to Section 1505. Your corporation cannot act as its own agent. Only list the name of the corporation, not the street address. Consider a registered agent service especially if you have a home office, are regularly out of the office, or wish to have added privacy of keeping your address off the public record
4 Corporate Addresses

Indicate both the principal street address for the business and, if different, the mailing address. The principal street address may not be a P.O. Box. CID associations should also state the front street and nearest cross street for the physical location of the common interest development, if different than the principal street address.

5 Managing agent

This section only applies to CID associations. CID associations should list the name and address of the association’s managing agent, if any.

6 Additional Statements

Applying for 501(c)(3), 501(c)(4), and/or California Tax Exemptions requires additional statements in the articles of incorporation.

  • Public benefit corporations are those looking to become a 501(c)(3) or 501(c)(4) tax exempt organization, so you will want to include statements required by the IRS for tax exemption. These statements are to the effect of the following:
    • The corporation is not for profit
    • It will not engage in prohibited political or legislative activity listed in 501(c)(3)
    • If dissolved, it will distribute its assets in compliance with 501(c)(3)
    It is wisest to check with the IRS and California Franchise Tax Board for the exact language required for your type of corporation and desired tax exemptions. 501(c) exemption is not automatically recognized but rather an additional application is required for California state franchise and income tax exemption.
  • Religious corporations are those looking to become a 501(c)(3) tax exempt organization, so you will want to check with the IRS and California Franchise Tax Board for the exact statements (as just described for a public benefit corporation). In addition, make a statement here as to the specific purpose of the corporation.
  • Mutual benefit and CID corporations should include a statement here as to the specific purpose of the corporation. They should also make a statement that the corporation shall not engage in activities or exercise any powers that are not in furtherance of the specific purposes of the corporation.
7 Incorporators

Your corporation must have one incorporator and can choose to have more. An incorporator is the individual responsible for executing the articles of incorporation. Each incorporator must provide their name and signature.

Optional Provisions

A Directors

Directors are the individuals elected by the shareholders to oversee the management of the corporation. The Board of Directors elects corporate officers to run the day-to-day operations and make certain decisions for the corporation.

  • If initial directors are named, all initial directors must sign an acknowledgment block along with the articles. Initial directors thereby act as the incorporators.
  • Either the number of directors or a range indicating the minimum and maximum number of directors may be declared.
  • A provision to indemnify and eliminate director liability must match exactly the requirements set forth in the California Corporations Code.
  • Do not include provisions that contradict the California Corporations Code, for example in regards to removal of directors, authority to alter bylaws, or special powers delegated to certain directors.
B Membership rights

Members elect the board of directors and provide a layer of oversight that is important to many nonprofits, especially larger ones. If desired, declare classes of membership and the rights, preferences, privileges, and restrictions of each.

C State tax exemptions

Every state has different requirements to apply for income, sales, or other tax exemptions. If your nonprofit will have a footprint in more than one state, check with each state for the statements required by these agencies in the articles of incorporation. For example, you may need to include a statement prohibiting the use of surplus funds for private inurement to any person in the event of a sale or dissolution of the entity.

Supplementary Documents Filed with the Articles of Incorporation

You may need to file one or more of the following:

Consent to use of the name
Substantially similar business names can be obtained if you get a letter of consent from the existing business and file this simultaneously with your articles of incorporation.
Future file date
California will provide the effective date of the incorporation as your documents are filed unless you specifically request a future file date. Include such request in the articles or as an attachment (which are made part of the filed articles).
Copies and certified copies
For a certified copy of the articles of incorporation, include a $5 certification fee.
Pre-Clearance, Drop-Off, and Expedite request
Several options exist for expediting your incorporation:
  • By arranging to drop-off your documents in person (perhaps by courier) along with a $15 state fee, they will receive priority processing.
  • Pre-clearance service only provides a preliminary review of the document by the Secretary of State. Options range from 10-Day Pre-clearance Service for $250 to 24-Hour Pre-clearance Service for $500.
  • Expedited filing service results in the Secretary of State filing or rejecting the document. Options range from 24-hour Filing Service for $350 to 4-Hour Filing Service for $500 (the document must be pre-cleared to be eligible for 4-Hour Filing Service).

Additional Requirements for California Corporations

California Does Not Have a Publishing Requirement

In some states, corporations are required to publish notice of their intention to or their filing of the articles of incorporation. This is not the case in California.


California Statement of Information

The corporation must file a Statement of Information within 90 days of filing the articles of incorporation. This contains information about the officers and directors. Business corporations pay a filing fee of $25 and continue to file this statement annually thereafter. Nonprofit corporations pay a filing fee of $20 and continue to file this statement biennially thereafter. CID associations must file supplement SI-CID along with the nonprofit statement of information and an additional $15 filing fee. All statement of information filings can be e-filed.


California Franchise Tax

California subjects most corporations to an annual franchise tax. The minimum amount due annually is $800, payable to the California Franchise Tax Board. Nonprofits may apply for exemption.


Register for Federal Taxes, State Taxes, & Licenses/Permits

After your articles are approved, you will apply for a Federal Tax ID (EIN), a unique nine-digit number assigned by the IRS to identify your business. State tax registration requirements vary, but the most common registrations are for sales and employer taxes in each state where the corporation has tax nexus. You may also need to get local licenses or permits.


Hold an Organization Meeting & Establish Records

Once the registration process is complete, you should hold an organizational meeting of the incorporators and take minutes of that meeting. At that time, you will ratify corporate bylaws, adopt a shareholders agreement, issue stock certificates and complete a stock ledger, elect directors and officers, and anything else you may want to include. Consider purchasing our corporate kit that stores your documents and contains your corporate seal and stock certificates.


Ongoing Compliance Requirements

Ongoing requirements include annual meetings with minutes, special meetings to make important business decisions, maintaining a registered office, amending your articles of incorporation as needed, and more. For more information on business compliance action items, please consult your Harbor Compliance representative.



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