How to Become a State of California
Corporation
The process to become a State of California Corporation varies greatly on the type of entity you choose to become, how
you process
your documents and your required timeline.
Start the process by researching possible names for your California
Corporation. You can do this by completing a California records
search for free or paying a small for a service to research your
options.
Once you have selected a name, you will need to decide which type of
legal
entity you will become. Currently in California you
can incorporate as a C
or S class corporation or a limited
liability corporation "LLC."
As a California company the benefits for which entity to
form are pretty clear. LLC's are generally only beneficial if you
are the only member of your corporation. California restricts
LLC's and it
does not offer the same kind of tax breaks or as much protection
from personal liability.
To form a corporation you will need to file your Articles
of Incorporation with the State of California Secretary's office. This can
be an easy or complex process.
Your first option is to file the paperwork on your own. Forms for this
process can be obtained from state of California and a
$100 fee will be charged to file the paperwork. From there it will
take 4 - 6 weeks
to receive confirmation. Unfortunately many people run
into issues when filing their paperwork because they are unaware
of corporate law or misunderstand
what is required by the state. This can cause you to lose
weeks and possibly money during the process.
A more effective option is to file your paperwork electronically via
an online service for a reasonable fee. With this process
you simply fill out the online form and the service will review
your answers and advise
you, if needed, on changes or issues. They will then represent
you to the state and even offer expedited service to California
Corporation in
about a week. For an additional small fee services can
file your sub-chapter
S form
and you can order a formal package used to help create
and store your corporate
bylaws, as well as a corporate seal.
If you are forming a complex business or require legal advice, then
an attorney can help you with the California incorporation process as
well. Acting on your behalf much like a service, the big difference is
that it will cost you considerably more to complete the California incorporation process.
No matter which type of process you choose, you will need to do complete
specific steps once you receive confirmation of California
incorporation. This starts with the adoption of corporate
bylaws,
issuance of corporate
stock and the election of a board to represent your California
Corporation. At this time you will also need to file a trademark for your corporation's
name and obtain a Federal
Tax Identification Number for
the company (also called an "EIN" or "Employer ID Number") and a California
Employment Development Department (EDD) employer account number.
From there you can open a business
banking account and present your business as an official
California Corporation.
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