The first step to starting a business in California is to choose a name for your business. The following must be observed when it comes to naming conventions as required by state law.
First, the name must not be similar or too closely the same as an existing name registered in the Secretary of State’s records. Second, the name must not be ambiguous to the public. Many business names tend to include ‘Corporation’, ‘Limited’, or Incorporate’.
When you have selected your Corporation name, you can use this California business name search link to check for its availability. If it is, you can have it reserved for sixty days for a $10 fee through a Name Reservation Request Form.
Registering your Corporation through the Articles of Incorporation will legitimize your business. You can file the Articles of Incorporation through the Secretary of State’s office.
When incorporating in California, you need to fill out the form accurately and completely. Instructions are provided in the actual form, so make sure to read it carefully. Once finished, you can submit the form through mail or drop it off personally.
You need to provide the following information:
Filing Fee: $100
To meet state requirements, a California Registered Agent is required for your business.
The Registered Agent in California should meet the requirements stipulated by the state. Before the Registered Agent is designated, (s)he should agree to represent your business. She or he should be a resident of the state, and should have a street address in California. A P.O. Box is not acceptable. Also, your Corporation is prohibited from being your own Registered Agent.
You can hire a Registered Agent through a device and pay up to $250 a year or you can form your Corporation with IncFile. IncFile gives you a California Registered Agent free of charge – which is $100 less than other online incorporation services.
A Corporate Records Book is a binder for all your Corporate documents. Inside the binder should contain your registration documents, minutes of your meetings, tax info, license requirements, and any other document of importance.
You can buy a Corporate Records Binder through your neighborhood office supply shop or you can order directly through Amazon.
As soon as you have decided to form a California Corporation, elect the initial set of directors. This set of directors will serve on the Corporate board until a new set of directors will be elected at the first shareholder’s meeting.
As the owner, you need to issue an Incorporator’s Statement; it will contain the full name and complete address of each director. This document should then be included in your Corporate Records Binder when forming a Corporation in California.
As part of the requirements of starting a California Corporation you need to conduct an initial meeting with your board of directors. This meeting is important because it will decide:
Have the board of directors affix their signatures on the minutes of the meeting as soon as it completed.
As required by law, you need to take care of your California business taxes and licenses. Your business taxes require three things:
For your California business licenses, you can use Startup Savant’s California Business Licenses and Regulations Guide to comply with your obligations as well.
As a new Corporation, it is important to keep your personal and business finances separate. The best way to do this is to open a new business checking account.
To find the best bank to start a checking account with, do some research. You can always use the bank you keep your personal account with, just be sure to keep them 100% separate.
Now that you have followed the steps above, you are officially a California Corporation. Other than the previous steps, here are 3 optimal steps based on best practice to starting a successful Corporation.
A business plan is an essential tool to help your business find funding. Although not required, a business plan will majorly contribute to your future success.
No technical expertise is needed to write a business plan. In fact, you can immediately start with one now with the two resources below.
Before you start marketing your California Corporation, it is important to have a business website. This will give you added credibility and show future customers what you stand for.
Rather than hiring a professional designer, you can easily build a custom WordPress website by yourself! Learn how with this simple setup guide.
To help set ground rules for your business, California Corporation bylaws should be prepared.
This guide is meant to be informational and should not be taken as a legal document or advice. For questions on California LLC or starting a new business in California, you should always consult a lawyer.