How to Incorporate in California
If you’re looking to incorporate in California, you’re in the right place. This guide will help you file formation documents, get tax identification numbers, and set up your company records.
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Choose a Corporate Structure
Incorporating means starting a corporation. If you want to form an LLC, please see "How to Form an LLC in California".
Is your corporation for-profit or not-for-profit? If you are starting a nonprofit, please see "How to Start a Non-Profit Organization in California".
C-Corp and S-Corp refer to taxation with the IRS, not to legal structures. Your corporation is taxed as a C-Corp unless you file an election to be taxed as an S-Corp (explained below).
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Check Name Availability
The legal name of your corporation may not conflict with any other registered name. Check availability of your desired name by conducting a name search.
Name Search: Name Reservation: Optional Suffix Requirements: - General stock corporation: not required
- Close corporations: "corporation", "incorporated" or "limited" or an abbreviation of one of such words
CCC §202.a
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Appoint a Registered Agent
Before you officially file to create your California LLC, you will need to decide who your California registered agent will be. A registered agent is a business's legal appointee to receive notice of lawsuit and other legal or government notices.
State law requires every LLC to have a registered agent. The registered agent is designated when you file California articles of organization with the California Secretary of State - Business Programs Division.
Our reliable registered agent service fulfills this requirement. You get:
- Same-day documents from our local office in Sacramento
- Immediate online access to state forms with our address and, where required, our signature
- Annual fees from $89 to $99 per state with no additional charges
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File California Articles of Incorporation
File the articles of incorporation to create your corporation.
Agency: California Secretary of State - Business Programs Division Form: Instructions: Filing Method: Mail, in-person or online.
Agency Fee: $100 by mail or $115 in-person + optional $250-$500 preclearance service + optional $350-$500 expedited filing service
Turnaround: Current state processing times or pay for preclearance and expedite services
Law: Notes: - Consider additional provisions.
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File Initial Statement of Information
Agency: California Secretary of State - Business Programs Division Form: Filing Method: Mail, in-person, or online.
Agency Fee: $25
Turnaround: ~1 business day online. See current processing times.
Due: You must file an initial report within 90 days of incorporation.
Law: California Corp. Code § 1502
Notes: - We recommend filing online.
- Every publicly traded corporation also must file a Corporate Disclosure Statement (Form SI-PT) annually, within 150 days after the end of its fiscal year.
- Original signatures are not required.
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Establish Bylaws & Corporate Records
Your corporation must keep correct and complete books and records.
Draft bylaws (potentially using a template) which is the governing document for the corporation. The bylaws of a corporation may contain any provision for managing the business and regulating the affairs of the corporation that is not inconsistent with law or with the articles of incorporation (C.R.S. 7-102-106). You will review and ratify the bylaws at your first board of directors meeting.
A corporation shall keep as permanent records minutes of all meetings of its shareholders and board of directors, a record of all actions taken by the shareholders or board of directors without a meeting, a record of all actions taken by a committee of the board of directors in place of the board of directors on behalf of the corporation, and a record of all waivers of notices of meetings of shareholders and of the board of directors or any committee of the board of directors (C.R.S. 7-116-101).
Your filed articles of incorporation and bylaws are the first documents for your corporate records. Your corporation will generate many other official records such as:
- Meeting minutes
- Shareholder resolutions
- EIN verification letter
- Amendments and other filings made to the corporation over its lifetime
Organizations need a secure, centralized tool for managing and accessing sensitive records. Our Records Manager software offers a simple, efficient way for corporations to store records, track officers, directors, and shareholders, and customize meeting notifications.
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Appoint Initial Directors
The initial directors serve on the board until the annual meeting of shareholders (when directors are elected to the board). If the initial directors are not named in the articles of incorporation, they are appointed by the incorporator. The incorporator documents and signs this action for the corporate records.
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Hold Organizational Meeting
Hold the first meeting of the board of directors. "After incorporation the initial directors shall hold an organizational meeting, at the call of a majority of the directors, to complete the organization of the corporation by appointing officers, adopting bylaws, ..., and carrying on any other business brought before the meeting." (AC §10A-2-2.05). Keep minutes of this meeting.
The following state laws apply unless overridden by the organizational documents, where permissible.
Directors Officers - Number: As set forth in the bylaws, but a minimum of three required once shares are issued. Only one is required if only one shareholder, only two required if two shareholders.
- Qualifications: none.
- Quorum: Majority of directors, unless bylaws state otherwise, but no less than one third.
- President, Secretary, Chief Financial Officer required. Can all be the same person.
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Issue Stock Certificates
The owners may be issued stock certificates to serve as proof of ownership in the corporation. Remember to hold the first annual meeting of the shareholders (the owners of the corporation) according to bylaws and keep minutes of this meeting.
The following state laws apply unless overridden by the organizational documents, where permissible.
Shareholders Annual Shareholder Meeting - Qualifications: N/A
- Stock Certificate: Required, unless standards met for electronic records.
- Voting Trusts Allowed: Yes.
- Required: Yes.
- Action by written consent: Allowed if enough shareholders consent to equal the number required to take action by vote.
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Get a Federal Employer Identification Number (EIN)
Your corporation must obtain an EIN regardless of whether it will hire employees.
Submit to: Internal Revenue Service
http://www.irs.gov/Form: IRS Form SS-4 Guidance: IRS Pub 1635: Understanding Your EIN Filing Method: Mail, phone, fax, or apply online with the IRS Fee: $0 Turnaround: Immediately online Notes: The IRS website is only available during certain hours. Print your EIN before closing your session. -
Get California State Tax Identification Numbers/Accounts
You will need to apply for a California Employer Identification Number if you will have employees.
Agency: California Employment Development Department Filing Method: Online Agency Fee: $0 To apply for a seller's permit (if your corporation collects sales tax on items sold), use tax account, and other permits and licenses:
Agency: California State Board of Equalization Filing Method: Online at eReg Agency Fee: $0 California corporations are subject to franchise and income taxes. This includes $800 minimum franchise tax. You do not need to register with the Franchise Tax Board, but you may need to start paying taxes.
Agency: California Franchise Tax Board Notes: - FTB Pub 1060: Guide for Corporations Starting Business in California
- State of California - Franchise Tax Board
https://www.ftb.ca.gov
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Consider Electing S-Corp Taxation
By default, your corporation is taxed as a C-Corporation. Some corporations, especially smaller ones, benefit from electing S-Corp tax treatment:
- C-Corps suffer from double taxation: the corporation pays taxes on profits then members pay taxes on their distributions. If profits exceed $250,000 per owner, you provide employee benefits, or you will re-invest most of your profit in the business, you may benefit from the low tax rates on retained earnings under C-Corp treatment.
- S-Corp treatment avoids double-taxation. It is generally the best choice for small businesses. To accomplish this, file Form 2553: S-Corp Election with the IRS.
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Obtain Business Licenses & Permits
To run your business legally, you must obtain applicable licenses and permits. The easiest way to navigate the wide range of federal, state, and local requirements is to search by your business type and locality using the Small Business Administration Business License & Permit look-up tool.
California Business License
Not required
General Business License licensure is not required on the State level in California.
Business licensing is conducted at the city level in California.
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Ongoing Filings to Maintain Your Corporation
You must file federal and state tax returns.
Many states also require business entities to file an annual report to maintain good standing with the secretary of state. If an annual report is required for corporations formed in California, view the table below.
Domestic California Corporation Annual Report Requirements:
Agency: California Secretary of State - Business Programs Division Form: Filing Method: Mail, in-person, or online.
Agency Fee: $25
Turnaround: ~1 business day online. See current processing times.
Due: Annually by the last day of the anniversary month of incorporation. You can start filing five months prior.
Law: Penalties: $250 penalty fee.
Notes: - We recommend filing online.
- Every publicly traded corporation also must file a Corporate Disclosure Statement (Form SI-PT) annually, within 150 days after the end of its fiscal year.
- Original signatures are not required.
For more details, see our California annual report information center page.
You will need to demonstrate your company’s good standing to banks, customers, and other state agencies. After all the work involved in forming your California corporation, don’t let a missed annual report filing cause your new business to fall out of compliance.
Tracking and filing annual reports on your own can be time consuming and lead to accidental lapses. Protect your corporation’s good standing with Managed Annual Report Service, which tracks and automatically files reports on time, every time, so you can focus on your business.
