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Incorporate in California

Incorporate in California - Prices and State Filing Fees, please visit the costs page for filing and service costs to Incorporate in California.

Incorporating in California is becoming more and more popular with entrepreneurs and business-minded individuals looking to increase their company's worth and ability to attract investors while decreasing their exposure to liability. Incorporating in California offers shareholders protection from business debts and lawsuits, potential taxation benefits, and increased confidentiality. There are a number of factors that must be considered before deciding that a California corporation is the best suited for your company. If these factors are applicable to you and your business, then California Incorporation can offer a substantial advantage to you and your company.

Advantages of incorporating in California

California Resources

Below are the organizational documents to incorporate, form or organize any legal entity in the state of California. These are part of the document package that is required by the California Secretary of State to form a new business entity


For additional California legal documents for new business formation, amendments and corporate maintenance, you can visit the California Business Portal at the CA Secretary of State website.

California Filing Requirements and Tips

Corporations

  • Initial directors list is not required, however if the directors are listed on the articles of incorporation, all directors must sign and acknowledge the articles.
  • Initial directors of the corporation do not have to be named and the articles of incorporation can be executed by an incorporator.
  • Every new business incorporation in California must include an initial agent for service of process. Companies Incorporated offers this service for free with every complete incorporation package.
  • Corporations that are authorized to issue only one class of shares must identify the total amount of shares authorized to be issued in the articles of incorporation.

Filing Fees

California business entity filing fees shown here are standard state filing fees that do not include expedited or faster service options.

Entity Type Details CA Fee Last Changed
Corporation Domestic Stock Corporation $100 01/2008
Corporation Domestic Nonprofit Corporation $30 01/2008
Corporation Foreign Corporation $100 01/2008
Limited Liability Company (LLC) Articles of Organization $70 04/2007
Limited Partnership (LP) Certificate of Limited Partnership $70 01/2008
General Partnership Statement of Partnership Authority $70 11/2006
Limited Liability Partnership (LLP) Registered Limited Liability Partnership Registration $70 01/2007

California Incorporation - Factors to Consider

The decision to incorporate yourself or your company in California should be based on the business goals for your company, where you intend to conduct the business, and where you intend to bank and establish financial/credit footholds. If the vast majority of your business is to be conducted within the state, and you intend to open an account and establish lines of credit with a California bank, then it is easy to determine that this is the state you should incorporate in. The reason for this is that some states (like California) are now a bit more aggressive about digging into a corporation's transaction and banking history, especially if all of the business is conducted in that state, yet the company is incorporated in a separate, low-taxation and regulation state. These states are becoming more aware of the tax revenue they are relinquishing to "foreign" corporations and are finding it financially feasible to dig deeper. Further, incorporating in the state you will ultimately conduct the most business in will save your corporation from having to pay excessive franchise fees in more than one state.

While California may not necessarily be a taxation haven (with state corporate tax at about 9% versus federal corporate tax of 35%) because it does charge a "corporate tax," incorporating here can still offer considerable income and taxation benefits for your company if the proper formation decisions are made.

It is also imperative to remember that you observe the general corporate formalities once your corporation is formed. This will help ensure the integrity of your "corporate veil" and provide you and your corporation with the liability, asset, and tax protection and benefits that incorporating in California can offer.

Assuming that you indeed intend to conduct business in California, establish a financial foothold there, and observe the formalities, then it makes perfect sense to incorporate in California.

Advantages of Incorporating in California

  • Asset Protection from Liability. Incorporating in California offers protection for Officers and Directors from personal liability against any lawsuits or business debts arising from the operation of the corporation or by actions committed on behalf of the corporation. The extent of liability exposure is limited to the amount of initial investment.
  • Stock Flexibility. California corporations may sell, transfer, gift, or purchase shares of it's own corporate stock. A corporation may issue stock for cash, property and services. Directors can determine the worth or value of the stock, and the stock can be in any quantifiable form: property, capital value, liquid funds, etc.
  • Credibility. California Incorporation will increase the "credibility" of your company, and will increase the amount of investor interest in your company. It speaks of "serious business" when your company is incorporated.
  • Management Flexibility. California only requires three officer positions: president, chief financial officer and secretary. These three positions may be filled by one person. If a California corporation has two shareholders, there must be at least two Board members. If there are at least three shareholders, then there must be at least three members on the Board.
  • Confidentiality. Only the director and the resident agents are disclosed as a matter of public record in California. Stockholders' names are not a matter of public record. Further, depending on the type of formation (LLC, etc.), a corporation can hold shares of stock.
  • Tax Advantages. California corporation taxes are only 9%, with sizable advantages available depending upon the type of corporation formed.

It should be apparent that incorporating in California offers a tremendous amount of benefits in the form of protection from liability, asset protection, taxation, and business flexibility. If you incorporate in California you will make your company more creditable, and the increased creditability will be an excellent way to attract investors all the while safeguarding shareholders' personal assets from liability. With a diligent implementation and business development strategy, you can build your business into a highly competitive, investment-attracting entity.

California Articles of Incorporation

Article I: The articles must include a statement of the name of the corporation.
  Note: The name must be exactly as you want it to appear on the records of the California Secretary of State.
Article II: This exact statement is required by the California Corporations Code and should not be altered.
 

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.

Article III: The articles must include the name of the initial agent for service of process.
 
  • If an individual is designated as agent, include the agent's business or residential street address in California (a P.O. Box address is not acceptable). Please do not use "in care of" (c/o) or abbreviate the name of the city.
  • If another corporation is designated as agent, do not include the address of the designated corporation.

Note: Before another corporation may be designated as agent, that corporation must have previously filed with the Secretary of State a certificate pursuant to California Corporations Code section 1505. A corporation cannot act as its own agent and no domestic or foreign corporation may file pursuant to Section 1505 unless the corporation is currently authorized to engage in business in California and is in good standing on the records of the California Secretary of State.

Article IV: The articles must include a statement of the total number of shares the corporation will be authorized to issue.
 

Note: Before shares of stock are sold or issued the corporation must comply with the Corporate Securities Law administered by the Department of Corporations. Information regarding permits to issue shares can be obtained from the Department of Corporation's website at www.corp.ca.gov or by calling the Department of Corporations at (213) 573-7500.

Execution:

The articles must be signed by each incorporator, or by each initial director named in the articles. If initial directors are named, each director must both sign and acknowledge the articles. Note: If initial directors are not named in the articles, the individual(s) executing the document is the incorporator(s) of the corporation. The name of each incorporator or initial director should be typed beneath their signatures.

California Secretary of State Regional Offices

Sacramento Office
1500 11th Street
Sacramento, CA 95814
(916) 657-5448
San Francisco Regional Office
455 Golden Gate Avenue, Suite 14500
San Francisco, CA 94102
(415) 557-8000
Fresno Regional Office
1315 Van Ness Avenue, Suite 203
Fresno, CA 93721
(559) 445-6900
Los Angeles Regional Office
300 South Spring Street, Room 12513
Los Angeles, CA 90013
(213) 897-3062
San Diego Regional Office
1350 Front Street, Suite 2060
San Diego, CA 92101
(619) 525-4113
 




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