How to Use this Guide
To form a Corporation in California, use the step-by-step guide below or hire a professional service to do it for you:
First, make sure that the name you’d like to file isn’t already taken. Check for name availability at this link, https://businesssearch.sos.ca.gov/; the names list are updated every few days. Next, ensure the name is not 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 search 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,” or “Inc.” Abbreviations for these words are acceptable.
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 agent for your California corporation, and you can 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.
Now 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 a declarative document for the public record that discloses some basics of your brand including:
Filing Fee: currently $100
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.
The corporate kit usually includes bylaws and will have blanks for you to fill out. Bylaws are standard and should be used, especially for multi-person owner/managed corporations. The bylaws are like a Constitution or rulebook to operate under. If there are multiple owners of the corporation it is also a good idea to have a separate Partnership Agreement.
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. California allows one person corporations so you can be every position in the corporation. Prepare an “Incorporator Statement” with complete names and addresses of each director and keep it in your records book. Even one person corporations should do this formality. Once elected, an initial meeting will:
As 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 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.
Note: Never, ever use corporate accounts for personal finances.
To 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:
Some counties and cities require a business license, also called a tax certificate in some counties, to do business even if you’re operating from a home. Look up the local city/county city hall webpages to determine where to file. You must renew every year.
California has many requirements for many professions. Besides doctors, plumbers, and contractors, there are requirements to work certain jobs. For example, importing materials for sale in California requires an importing license, commercial license; a bar requires liquor license(s), business licenses, safety checks; a nail salon requires beautician licenses.
If you’d like help forming a Corporation, here are two great options:
IncFile ($49 + state fees) is ideal if you’re on a budget but refuse to sacrifice quality. However if you’d like access to an attorney past incorporation Rocket Lawyer ($99 + state fees) is the best option.Visit IncFile Or Visit Rocket Lawyer
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.