STEP 1) VERIFY & SECURE YOUR BRAND NAME

Choose a Business Name

First, make sure that the name you’d like to file isn’t already taken or too similar to another brand name that’s already recognized by the state, or that contains restricted wording. Or that has words which denote something other than what the business is for. Conduct a Business Entity Search through the state and for trademark issues, use the Tess System through the U.S. Patent Office.

Keep in mind your brand name should contain the words ‘Corporation,’ ‘Company,’ ‘Incorporated,’ or ‘Limited.” Abbreviations for these words are acceptable. If needed, you can file a Name Reservation Request form and reserve an available name for 60 days.

Filing Fee: $20

STEP 2) SECURE A REGISTERED AGENT

Choose a Registered Agent

The next step is appointing a Registered Agent to receive and help to handle/process all official documents like state filings, tax forms, legal notices, etc. To be considered the agent must be a CA resident or registered business entity with a physical street address, not a P.O. Box. Furthermore, there should only be one for your California corporation, and you cannot elect yourself.

So you can hire a professional that charges as much as $160 a year, or you can can get a qualified/certified registered agent free of charge by incorporating with IncFile or CorpNet.

STEP 3) FILE ARTICLES OF INCORPORATION

Register an LLCNow that you have a registered agent, download the Articles of Incorporation and file it with the CA Secretary of State’s office. Instructions are provided, so make sure to read it carefully. It’s declarative document for the public record that discloses some basics of your brand including:

  • Corporate name
  • Corporate purpose
  • Name and complete street address of California Registered Agent
  • Number of shares the Corporate is allowed to issue

Filing Fee: $100

STEP 4) GET A CORPORATE RECORDS BOOK

File Annual Reports & Publication Requirements

Think of this as the hard copy record book where all critical corporate documents are kept like the Articles of Incorporation, Bylaws, meeting minutes, stock certificate ledger, stock certificates, stock certificate stubs, stock transfer documents, etc. It’s the ultimate company binder. They’re very common and while not necessary we highly recommend you have one from, well, day one of building your new business entity.

We’re huge fans of Corporate Kits which include gorgeous records books/binders you can brand for as little as $99.

STEP 5) CHOOSE THE INITIAL DIRECTORS

Hold a Meeting with Your Board of Directors

Appoint a minimum of 3 directors who among other things will oversee the corporation in California until the first shareholder meeting where new directors will be voted in. Prepare an “Incorporator Statement” with complete names and addresses of each director and keep it in your records book. Once elected, an initial meeting will:

  • Appoint officers & discuss/create Corporate Bylaws.
  • Choose a bank & approve the issuance of stock certificates.
  • Agree on corporate seal and adopt official stock certificate form.
  • Approve s-corp (opt.). Record Minutes of Meeting, have directors sign, then add to records book.

STEP 6) OPEN A BUSINESS BANK ACCOUNT

Best Business Bank AccountAs a new California corporation, there are two primary reasons to open unique business bank accounts, the first of which has everything to do with the many perks banks and lending institutions are offering corporate clients. There’s are a fair amount so be sure do some investigation.

The second has to do with making your finances easier by syncing the single account with your accounting software, and adding a huge layer of protection by being separated from any other business/personal accounts.

STEP 7) COVER TAXATION & LICENSING/PERMITS

Business LicensesTo ensure that you don’t face penalties, fines, and fees when operating a business, you need to completely fulfill your regulatory requirements. To get started:

  1. Process a Employer Identification Number (EIN) free and easy through the IRS website.
  2. Bookmark the closest CA district office of the Small Business Administration, and Sec. of State’s Business Resources page.
  3. Should the corporation seek S-Corp Status, then file a 2553 Election form with the IRS to obtain that status.
  4. Also, consider professional Business License Research packages that take care of the legwork for you.

OPTIONAL) WRITE YOUR BUSINESS PLAN

Write a Business PlanTo be taken seriously by the average Californian, not to mention VC-types, lending institutions, funds and organizations, or incubator groups – your corporation must have presentation-ready business plans that focus on core fundamentals.

The good news is that thanks to, well in large part Californian-made software, the process of putting together these plans are far easier and more intuitive for those that don’t have MBAs or a long history of founding companies. To learn more check out our free resources below.

  • Our free email-based Business Plan Course is specially designed to take you smoothly through the process step-by-step.
  • This Business Plan Software Guide is our savvy breakdown of all the best software solutions to help you plan better. (Spoiler: We’re huge fans of LivePlan, plus they offer our readers a special discount.)

OPTIONAL) BUILD A COMPANY WEBSITE

Build a Business WebsiteLast, but definitely not least, along with a solid plan your company will need a website to compete, leverage the astounding digital marketing potential (if so desired, or a part your business mode), and give the world a way to investigate your brand. It’s critical!

No in-house designer? No problem, there’s outsourcing on sites like UpWork, as well as one-stop-shop solutions like Wix and Weebly. For a very reasonable price you get have your site up and running in the background, or bringing in leads.

Need Help Forming Your Corporation?

Have a reliable incorporation service like IncFile or LegalZoom do the work for you. Just answer a few questions about your business and they’ll take care of the paperwork.

Although both offer virtually the same service, IncFile is $100 less and our top pick. Enjoy!

Visit IncFile Or Visit LegalZoom

Note that this article on how to form a corporation in California isn’t a legal document or legal advice. It’s for informational purposes and the information above is subject to change. For specific legal questions regarding how to form a corporation in California or business in general, please consult with a lawyer or other accredited professional.