California C Corporation

An overview to incorporating a business in CA

If you’d like to incorporate in California, you would do so by drafting and filing Articles of Incorporation with the Secretary of State’s office. The California Corporations Code sets the guidelines for all business filings in California. California Articles of Incorporation are pursuant to General Corporation Law, California Corporations Code, Title 1, Division 1, Chapter 2, which sets forth the requirements for all stock-issuing entities in the state of California. You'll deal with the Business Programs division of the California Secretary of State, which is the state body in charge of all corporate business filings.

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Steps to Forming a California C Corporation

The following information must be included in your Articles of Incorporation:

  • Name: In this section of the California Articles of Incorporation you will fill in the name of your company in exactly the manner you want it to appear on the records of the California Secretary of State. In California, your business name cannot be the same as any existing active corporation or any currently reserved corporation’s name. Additionally, California has a list of certain words and professional designations that are restricted for use by approval only. For instance, your XYZ Plumbing Supply Company cannot claim to be a credit union, an insurer, or a cooperative, to name a few, without approval from the state of California. To avoid a rejection, can help you determine whether your name is available by performing a business name search. Generally, California does not absolutely require a corporate ending such as Incorporated, Corporation, or Company or their abbreviations, although you may need to add a corporate ending if ever you decide to register as a foreign corporation in a state which does require this. You may wish to review more information on how to name your business.
  • Purpose: In California, you are permitted to form a corporation for any lawful business activity. In this section, a statement provided by the state must be included exactly as provided. The statement is: "The purpose of the corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of California other than the banking business, the trust company business or the practice of a profession permitted to be incorporated by the California Corporations Code."
  • Registered agent: In this section you will provide the name and California address of the person you will be designating as your Registered Agent. P.O. boxes are not acceptable on their own; a physical address is required. The Registered Agent can be either an individual or an incorporate entity; however, a corporation is not permitted to serve as its own Registered Agent.
  • Shares: In this section you will indicate the total number of shares your company will be authorized to trade. You will be required to comply with the Corporate Securities Law overseen by the California Department of Corporations before you will be permitted to sell or issue shares in your corporation.
  • Execution: The person who drafted the Articles of Incorporation must sign them before filing them.

If any of the above information about your business changes, you must file an amendment to the Articles. It is very important that the state have accurate and up-to-date information about your business.

Let set up your C Corporation in California for you—or take a look at Sample California Articles of Incorporation.

Further Responsibilities of a California C Corporation

California corporations are required to file an initial Statement of Information within 90 days of filing. Additionally, you will file an annual Statement of Information. Failure to do so in a timely manner will result in hefty late fees.

Additional Information about a California C Corporation

Your C Corporation:

  • Can sell stock and raise capital
  • May deduct the cost of benefits provided to employers (such as parking permits, health insurance, and so on)
  • Has a board of directors, which oversees the policies of the corporation
  • Issues limited liability for owners
  • Can be owned by non-US citizens or non-resident aliens
  • Can own other business entities
  • Can be owned by other business entities
  • Is taxed separately from the owners’ income

Shareholders of a California C Corporation cannot be held liable in a judgment against the corporation for an amount greater than the amount of stock they hold. (This does not include any personal liabilities, such as fraud, failure to pay taxes, and so on.)

Other Types of Businesses in California

For information on other types of businesses in California, please explore the links below.

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