Incorporate your business in California;
Our Incorporation information is to help you with the small
business startup process. The California Incorporation info can
help answer questions like "How do I form an LLC in California?"
or "What type of Incorporation entity should I be? An California
S-Corporation or an California C-Corporation?" or "What are the
requirements for an California Corporation?" It's easy to set up
an California Corporation with our Incorporation Software. It has
this and other Incorporation info right on the software. So
once you know, your ready to go!
Corporate Name Endings
The name must not be likely to mislead
the public, be the same as, or resemble so closely as to lead
to deception, the name of a domestic or qualified foreign corporation,
a name under reservation, or the registered or assumed name
of a foreign corporation. The name would need Superintendent
of Bank's approval if it contained the words "Bank,"
"Trust," or "Trustee."
Corporation Requirements
Director Information
Minimum Number - Not less than three, unless there
are only one or two shareholders of record; then the
number of directors may be less than three but not less
than the number of shareholders.
o Residence Requirements - No provision.
o Age Requirements - None.
o Directors are not required to be listed in the articles
of incorporation.
Officer Information
Officers are not required to be listed in the articles
of incorporation.
Stock Information
An increase in shares or par value does not affect
initial filing fees.
Corporate Records
An original or a copy of bylaws must be kept at the
principal executive office or principal business office
in the State of California. The minutes of directors'
and shareholders' meetings must be kept at the principal
office.
Tax and Fees
Annual Statements
Domestic corporations must file with the Secretary
of State within 90 days after filing the articles or
incorporation. A statement of domestic stock corporation
must be filed annually by the end of the calendar month
during which the original articles of incorporation
were filed. The cost is $20.
o Foreign corporations must file a biennial statement
by foreign corporation. The cost is $20..
Taxes
Businesses must generally file California Form PSA,
California Business Privilege Tax Return, Corporate
Shares Tax Return, and Annual Return, within 2½ months
after the beginning of their tax year. For corporations
filing on a calendar year basis, the return must be
filed by March 15th of the current year.
Income Tax Rate
California imposes a franchise tax on both California
corporations (domestic) and non-California corporations
(foreign) for the privilege of doing business in the
state. The franchise tax is actually a tax of net income;
the rate is 8.84% of net income for corporations. S
corporations still must pay the franchise tax; the rate
is 1.5% of net income.
oCalifornia imposes a minimum franchise tax of $800.
So, even if your corporation does not have net income,
it still must pay this minimum tax. The minimum tax
does not have to be paid during the corporation's first
year; however, taxes based on income must be paid during
this first year.
S Corporation
Corporation status is recognized by the State of
California; however, the corporation is still required
to pay franchise tax at a rate of 1.5% of net income.
A separate state election is required.
License Requirements
California may require that you obtain a business
license and pay a licensing fee based on your business
type or profession. Please check with the state to make
sure your business is complying with the license requirements
for your particular profession.
