California Incorporation Options

California Incorporation Options

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Over 500,000 customers incorporate online and keep their businesses compliant with BizFilings.

  • LLC
  • S Corp
  • C Corp
  • Nonprofit

California Facts for LLCs

Here are some key facts you should know as you consider forming an LLC in California.

At the time of incorporation, California requires you to take the following steps:

  • Articles of Organization. The document is required to form an LLC in California. LLCs are required to have one or more members/managers listed in the documentation and the business name must end with "Limited Liability Company," "LLC," or "L. L. C." The word "bank" or variations cannot be used in LLC names.
  • Initial Report. LLCs are required to file an initial report with the state within six months of incorporating.
  • Registered Agent. LLCs must list the name and address of a registered agent with a physical address (no post office boxes allowed) in California. The registered agent must be available during normal business hours to accept important legal and tax documents for the business.
  • Federal Tax Identification Number (EIN). An EIN is required for LLCs that will have employees. Additionally, most banks require an EIN in order to open a business bank account.

Professional Services Businesses. California does not allow professionals, such as accountants, attorneys and physicians, to form professional limited liability companies (PLLCs).

After incorporating California also has the following ongoing requirements:

  • Statement of Information and Franchise Tax. California requires LLCs to file a biennial Statement of Information during a time period that runs from the first day of the fifth month preceding the LLC's formation anniversary date but no later than the last day of the anniversary month. The fee for the Statement of Information is $20. California also has a minimum franchise tax of $800 which is due within three months of incorporation and annually thereafter.

Why choose an LLC?

Consider forming an LLC if you are fearful of personal risks to lawsuits arising from your business. For example, if you decide to open a storefront business that deals directly with the public, you may fret that your commercial liability insurance won’t fully cover your personal assets from potential slip-and-fall lawsuits or claims by your vendors for unpaid debts. Running your business as an LLC may ease your mind because it instantly offers you an additional layer of security against these and other possible claims against your business.

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Our Process

5 steps to online incorporation.

 1 
  Quality check

We ensure your information meets state requirements.

 2 
  Name check

We confirm your business name availability.

 3 
  Documents filed

We prepare and send your incorporation documents to the state, providing tracking.

 4 
  Delivery

You receive a complete package of incorporation documents and materials.

 5 
  Ongoing support

After incorporating, we inform you of upcoming annual reports/franchise tax payments.

California Facts for S Corporations

Here are some key facts you should know as you consider forming an S corporation in California.

At the time of incorporation, California requires you to take the following additional steps:

  • Articles of Incorporation. The document is required to form a corporation in California. S corporations are required to have a minimum of three directors listed in the documentation unless (1) shares have not been issued, then the number can be one or two, (2) the corporation has one shareholder, then the number can be one or two, (3) the corporation has two shareholders, then the number can be two. Additionally, there is a business name requirement if the corporation is being filed as a professional corporation (doctor, lawyer, etc.), or close corporation, or if it is using a person's name. In such cases the business name must end with "Corporation," "Company," "Incorporated," "Limited" or an abbreviation thereof. The name needs Superintendent of Bank's approval if it contained the words "Bank," "Banc," "Trust" or "Trustee."
  • Stock. Authorized shares and par value (minimum stated value) must be listed in the Articles of Incorporation. An increase in the number of shares or par value does not affect initial filing fees.
  • Initial Report. S corporations are required to file an initial report with the state within 90 days of incorporating.
  • Registered Agent. S corporations must list the name and address of a registered agent with a physical address (no post office boxes allowed) in California. The registered agent must be available during normal business hours to accept important legal and tax documents for the business.
  • Federal Tax Identification Number (EIN). An EIN is required for corporations that will have employees. Additionally, most banks require an EIN in order to open a business bank account.

After incorporating California also has the following ongoing requirements:

  • Statement of Information and Franchise Tax. California requires corporations to file a Statement of Information annually during the first six-month period ending the last day of the anniversary month of the incorporation. The fee for the Statement of Information is $25. California also has a minimum annual franchise tax of $800 due the 15th day of the third month after the close of the year, but corporations are exempt from this tax for the first year.
  • Corporate Records. California requires corporations to keep extensive records at the principal place of business.
  • S Corporation Election. California recognizes the federal S corporation election and does not require a state-level S corporation election.

Why choose an S corporation?

An S corporation allows the owners to offset non-business income with losses from the business, unlike a C corporation which is a completely separate tax entity. When compared to an LLC, the S corporation enables an owner to characterize a portion of income as “dividend,” rather than “earnings” that are subject to employment taxes.

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Our Process

5 steps to online incorporation.

 1 
  Quality check

We ensure your information meets state requirements.

 2 
  Name check

We confirm your business name availability.

 3 
  Documents filed

We prepare and send your incorporation documents to the state, providing tracking.

 4 
  Delivery

You receive a complete package of incorporation documents and materials.

 5 
  Ongoing support

After incorporating, we inform you of upcoming annual reports/franchise tax payments.

California Facts for C Corporations

Here are some key facts you should know as you consider forming a C corporation in California.

At the time of incorporation, California requires you to take the following additional steps:

  • Articles of Incorporation. The document is required to form a corporation in California. C corporations are required to have a minimum of three directors listed in the documentation unless (1) shares have not been issued, then the number can be one or two, (2) the corporation has one shareholder, then the number can be one or two, (3) the corporation has two shareholders, then the number can be two. Additionally, there is a business name requirement if the corporation is being filed as a professional corporation (doctor, lawyer, etc.), or close corporation, or if it is using a person's name. In such cases the business name must end with "Corporation," "Company," "Incorporated," "Limited" or an abbreviation thereof. The name needs Superintendent of Bank's approval if it contained the words "Bank," "Banc," "Trust" or "Trustee."
  • Stock. Authorized shares and par value (minimum stated value) must be listed in the Articles of Incorporation. An increase in the number of shares or par value does not affect initial filing fees.
  • Initial Report. C corporations are required to file an initial report with the state within 90 days of incorporating.
  • Registered Agent. C corporations must list the name and address of a registered agent with a physical address (no post office boxes allowed) in California. The registered agent must be available during normal business hours to accept important legal and tax documents for the business.
  • Federal Tax Identification Number (EIN). An EIN is required for corporations that will have employees. Additionally, most banks require an EIN in order to open a business bank account.

After incorporating California also has the following ongoing requirements:

  • Statement of Information and Franchise Tax. California requires corporations to file a Statement of Information annually during the first six-month period ending the last day of the anniversary month of the incorporation. The fee for the Statement of Information is $25. California also has a minimum annual franchise tax of $800 due the 15th day of the third month after the close of the year, but corporations are exempt from this tax for the first year.
  • Corporate Records. California requires corporations to keep extensive records at the principal place of business.

Why choose a C corporation?

C corporations offer more flexibility than S corporations when it comes to the number of owners (shareholders) they can have as well as who can be an owner. Plus, the owners can hold different types of stock interests (such as preferred versus common stock.) This is one reason why venture capitalists choose C corporations when they offer funding to a business. Investors are drawn with the prospect of dividends if the corporation makes a profit. A C corporation can also retain and accumulate earnings (within reasonable limits) from year to year.

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Our Process

5 steps to online incorporation.

 1 
  Quality check

We ensure your information meets state requirements.

 2 
  Name check

We confirm your business name availability.

 3 
  Documents filed

We prepare and send your incorporation documents to the state, providing tracking.

 4 
  Delivery

You receive a complete package of incorporation documents and materials.

 5 
  Ongoing support

After incorporating, we inform you of upcoming annual reports/franchise tax payments.

California Facts for Non-Profits

Here are some key facts you should know as you consider forming a Non-profit corporation in California.

At the time of incorporation, California requires you to take the following additional steps:

  • Articles of Incorporation. The document is required to form a corporation in California. Non-profit corporations are required to have one or two directors listed in the documentation. Additionally, there is a business name requirement if the corporation is being filed as a professional corporation (doctor, lawyer, etc.), or close corporation, or if it is using a person's name. In such cases the business name must end with "Corporation," "Company," "Incorporated," "Limited" or an abbreviation thereof. The name needs Superintendent of Bank's approval if it contained the words "Bank," "Banc," "Trust" or "Trustee."
  • Initial Report. Non-profit corporations are required to file an initial report with the state within 90 days of incorporating.
  • Registered Agent. Corporations must list the name and address of a registered agent with a physical address (no post office boxes allowed) in California. The registered agent must be available during normal business hours to accept important legal and tax documents for the business.
  • Federal Tax Identification Number (EIN). An EIN is required for corporations that will have employees. Additionally, most banks require an EIN in order to open a business bank account.

After incorporating California also has the following ongoing requirements:

  • Annual Fees and Report Filings. A complete listing of reporting requirements for Non-profits can be found here.
  • Statement of Information and Franchise Tax. California requires corporations to file a Statement of Information annually during the first six-month period ending the last day of the anniversary month of the incorporation. The fee for the Statement of Information is $25. Unless the Non-profit is tax exempt, California also has a minimum annual franchise tax of $800 due the 15th day of the third month after the close of the year. Corporations are exempt from this tax for the first year.
  • Corporate Records. California requires corporations to keep extensive records at the principal place of business.

Why choose a Non-Profit?

While incorporating your not-for-profit venture is not a requirement, it lends more credibility to your organization. Also, in order to become tax-exempt, you must incorporate and also file Form 1023 with the Internal Revenue Service. A few states require a separate file for state tax-exempt status as well.

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Our Process

5 steps to online incorporation.

 1 
  Quality check

We ensure your information meets state requirements.

 2 
  Name check

We confirm your business name availability.

 3 
  Documents filed

We prepare and send your incorporation documents to the state, providing tracking.

 4 
  Delivery

You receive a complete package of incorporation documents and materials.

 5 
  Ongoing support

After incorporating, we inform you of upcoming annual reports/franchise tax payments.

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What does it mean to incorporate?

Incorporating a business means turning your sole proprietorship or general partnership into a company formally recognized by your state of incorporation. When a company incorporates, it becomes its own legal business structure set apart from the individuals who founded the business. Through incorporation, the company's owner or owners create a separate legal entity to transact business. This new business entity corporation or limited liability company (LLC) transforms the way the business is seen through the eyes of the law and often has more credibility with potential customers, vendors and employees.

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How does incorporation work?

Wondering how to incorporate a business as a C corporation or S corporation or how to form an LLC? Here are some of the steps included in the process:

  1. Determine where you want to incorporate.
  2. Decide which business type is best for your business and goals. Consult with an attorney or accountant.
  3. Determine who the directors of the corporation or who the members/managers of the LLC will be.
  4. Select a registered agent. Your registered agent must be listed on your Articles of Incorporation or Articles of Organization. The registered agent is appointed by you to receive important legal and tax documents on behalf of your business and forward them to you. BizFilings includes this service in all incorporation packages.
  5. Prepare and file the Articles of Incorporation or Articles of Organization per instructions from the Secretary of State's office. BizFilings handles this step for you, allowing you to concentrate on running your business.

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Why is incorporating a business important?

The primary benefit to business incorporation is limited liability. When you own a small business, you will invest a lot of money into not only getting it launched, but in keeping it running smoothly as well. As the owner you are responsible for any debts and losses your business may accumulate along the way. However, when you incorporate, you are typically only held responsible for the amount of money you personally invest. Your personal assets typically cannot be used to satisfy the debts and liabilities of your business.

View our Benefits of Incorporation or Benefits of Creating an LLC article to learn more about this and other benefits of incorporating a business.

For a comparison between multiple incorporation types view our article
Which Business Type is Right for Me? C Corp, S Corp, or LLC to help with your decision.

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Additional Resources

Tools to Help You Choose

We have resources to help you understand your options.

Incorporation Timeframe

You’ll receive your materials in 4-20 days. The speed at which your documents arrive depends on the incorporation package you order.

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Don’t Forget a Registered Agent

The RA receives important legal and tax documents and helps your business stay compliant with state requirements.

Registered Agent Services