How To Incorporate in California
Corporations are a popular option among business owners due to their ability to attract investors and early capital.
To start your California corporation you will need to first file your Articles of Incorporation with the California Secretary of State and elect an individual or entity as your agent for service of process.
Following this, you must hold an organizational meeting, in which your corporate bylaws will be produced, and your initial director will be elected.
We’ll show you how to start a corporation in California yourself.
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Step 1: Name Your Corporation
Step 2: Choose a Registered Agent
Step 3: Hold an Organizational Meeting
Step 4: File the Articles of Incorporation
Step 5: File the Statement of Information
Step 6: Get an EIN
For a look at corporation formation in every state, check out our other How to Start a Corporation guides.
Not sure if a corporation is right for you? Check out our LLC vs. Corporation guide to help you make your decision.
Step 1: Name Your California Corporation
Choosing a business name is the first step in starting a corporation.
1. California naming guidelines:
- Your name cannot use the words “bank,” “trust,” “trustee,” “credit union,” or related words without approval from the Commissioner of Business Oversight.
- Your corporation’s name will not be approved if it is considered to be deceptive by the Secretary of State (e.g. if a for-profit company was masquerading as a charity).
- You must include terms like “limited”, “company”, “corporation”, or “incorporated” – abbreviated or in full – in your name to be approved by the Secretary of State.
- The name you select for your corporation must be sufficiently distinguishable from already existing corporations in the records of the Secretary of State.
- Your name will not be approved if it contains words or phrases that would induce confusion between it and a government agency (such as the State Department or Treasury).
Read the California state statute regarding corporation naming guidelines for more information.
2. Is my corporation name available in California?
Your California corporation name must be unique and distinguishable from other business names in California. Use the California Secretary of State’s Business Search Portal to determine if your desired business name is available.
3. Is the URL available?
Before registering your California corporation, you’ll need to check if a good URL is available for your business name. It’s important to secure your URL right away.
Step 2: Choose a California Registered Agent
You must appoint a California agent for service of process, also known as a registered agent, when registering your corporation with the Secretary of State.
A registered agent is an individual or entity appointed to receive service of process, government correspondence, and compliance documents on behalf of a business.
Your registered agent can be an individual, business entity, or professional registered agent service. Any member of the corporation or individual can serve as your California agent for service of process as long as the person:
- is 18 years or older
- has a physical address in the state where business activity is conducted
- is available (in person) during normal business hours
Recommended: Northwest offers one year of free registered agent services with their corporation formation package ($29 + State Fees).
Step 3: Hold an Organizational Meeting
Before you officially file the Articles of Incorporation in Step 4, you will need to hold an organizational meeting to complete the following tasks:
- Fill out and execute the Articles of Incorporation
- Create and approve bylaws
- Select your initial director(s)
- Determine your share structure
- Execute an Incorporator’s Statement
Create and Approve Corporate Bylaws
Bylaws are the rules that determine how your organization will be governed and run. For detailed instructions on creating your bylaws, read our corporate bylaws guide.
Appoint Initial Directors
You must appoint at least one director who will oversee your California corporation until the first shareholder meeting.
A corporate director is in charge of the adoption, amendment, and repeal of operational bylaws as well as the election, supervision, and removal of officers.
After forming the corporation, the incorporator(s) — or initial director(s), if named on the formation documents — should call an organizational meeting. During this initial meeting, either the incorporator(s) will elect the board of directors or the initial director(s) will appoint the officers.
Choose a Share Structure and Strategy
A share of stock is the unit of ownership of a corporation. Each share of stock represents a percentage of ownership of the company. For example, if a corporation issues one share of stock the shareholder (stock owner) would then own 100% of the corporation.
Shares can be structured into classes. Each class, termed a share class, holds different rights and privileges. You can have multiple classes and each class can hold any number of shares.
Authorized Shares: the number of shares the corporation is allowed to issue.
Issued Shares: the total number of shares actually issued to shareholders.
Share Class: a group of shares that has a unique set of rights and privileges.
The Articles of Incorporation form issued by the California Secretary of State can only be used to start a corporation with one share class. If the corporation needs a multiple share class structure, you must compose your own Articles of Incorporation.
Create and Execute an Incorporator’s Statement
The incorporator(s) should sign an Incorporator’s Statement with complete names and addresses of each initial director and store it in the corporate records book.
This document names the initial director(s) that will serve until the board of directors is elected during the first shareholder’s meeting. It should be stored with the rest of your corporate records.
Step 4: File the California Articles of Incorporation
You will need to file the California Articles of Incorporation to set up a corporation in California. You can file it by mail or in person with the Secretary of State. The filing cost is currently $100.
This document will cover the basics of your corporation, including:
- Corporate name and principal address
- Corporate service of process agent name and street address
- The number of authorized shares the corporation is allowed to issue
File the California Articles of Incorporation
Option 1: File Online With the California Secretary of State
File Online- OR -
Option 2: File the Articles of Incorporation by Mail or In Person
Download FormFiling Cost: $100
Mailing Address:
Secretary of State
Business Entities Filings Unit
P.O. Box 944260
Sacramento, CA 94244-2260
Office Address:
1500 11th Street
3rd Floor
Sacramento, CA 95814
Step 5: File the California Statement of Information
You must file the California Corporate Statement of Information form within 90 days of registering your California corporation. You must then file every other year thereafter. Detailed instructions are included with the Corporate Statement of Information form. The filing fee is $25.
Step 6: Get an EIN for Your California Corporation
An Employer Identification Number (EIN) is used by the federal government to identify a business entity. It is essentially a Social Security number for the company. An EIN is needed:
- To open a bank account for the company
- For federal and state tax purposes
- To hire employees
Get an EIN
Option 1: Request an EIN from the IRS
- OR -
Option 2: Apply for an EIN by Mail or Fax
Mail to:
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Fax: (855) 641-6935
Fee: Free
Running Your Corporation
It is very important to adhere to the formalities of running a corporation. Read our How to Run a Corporation guide to learn more.
Taxes, Biennial Reports, & Licensing
California State Corporation Tax Requirements
Depending on the nature of your business, you may be required to register for one or more forms of state tax:
California Sales Tax
If you’re selling a product, you’ll typically need to register for a seller's permit through the California Department of Tax and Fee Administration's website. This allows a business to collect sales tax.
California Employer Taxes
If you hire employees, you will need to register for California employer taxes through the California Payroll website. This includes Employee Withholding Tax, Unemployment Insurance Tax, and Disability Insurance.
California Corporation Licenses and Permits
To operate your corporation in California, you must comply with federal, state, and local government regulations. For example, restaurants likely need health permits, building permits, signage permits, etc.
Learn more in our California Business License guide.
File the California Statement of Information
You must file the California Corporate Statement of Information form within 90 days of registering your California corporation. You must then file every other year thereafter. Detailed instructions are included with the Corporate Statement of Information form. The filing fee is $25.
Corporate Dissolution & California Good Standing
How to Get a California Certificate of Good Standing
A Certificate of Good Standing, known in California as a Certificate of Status, verifies that your California corporation was legally formed and has been properly maintained.
To request a Certificate of Status in California, you must complete the Business Entities Records – Order Form. You can submit this form by mail or in person with the Secretary of State. The fee is $5.
Order a California Certificate of Status
Request a Certificate by Mail or In Person
Download FormFee: $5
Mailing Address:
Secretary of State
BE Certification and Records
P.O. Box 944260
Sacramento, CA 94244
Office Address:
1500 11th St.
3rd Floor, Room 380
Sacramento, CA 95814
Mon-Fri. 8 a.m. to 5 p.m.
How to Dissolve a Corporation in California
If at any point you would like to permanently stop doing business, or close your business, it is important to officially dissolve your corporation. Failure to do so in a timely fashion can result in tax liabilities, penalties, or even legal trouble.
There are five main steps to close your California corporation:
- Stop doing business
- Hold a board meeting, vote on dissolution, and record the meeting in the corporation minutes
- File the Certificate of Election to Wind Up and Dissolve (if no vote was conducted) and the Articles of Dissolution with the California Secretary of State
- Close your federal and state business tax accounts with the IRS and California Franchise Tax Board
- Close your business bank accounts
File Dissolution Documents
There are two options for filing dissolution documents for a California corporation: short form dissolution or, simply, dissolution.
Short Form Dissolution
You can file the Short Form Dissolution Certificate (Form DSF STK) if your corporation is less than 12 months old and has never conducted any business or issued shares.
Dissolution
If your corporation doesn’t meet the criteria for short-form dissolution, you must dissolve or close your corporation with the California Secretary of State by filing the Form DISS STK. If the vote to dissolve was made by less than all the shareholders, then you also will need to file California Form ELEC STK.
Is a Corporation Right For You?
An LLC provides limited liability protection without corporate complexity.
Find out if an LLC is the right structure for you.
Steps After Forming a Corporation
After forming a corporation, you’ll want to protect your personal and business assets and build credit.
Taking these steps will set your business up for success:
- Open a Business Bank Account
- Open a Business Credit Card
- Establish and Build Business Credit
- Get Insurance
- Protect Your Corporate Veil
Form a Corporation with Northwest for $29 Plus State Fees
California Corporation FAQ
One of the few essential expenses of starting a corporation is the cost of filing the California Articles of Incorporation with the Secretary of State ($100).
From here, your total startup cost is largely dictated by whether you decide to hire a professional registered agent service, use a business attorney, or become your own registered agent.
See our Should I Use a Registered Agent Service article for more information.
LLCs have a number of advantages over corporations, including their “pass-through” tax status, ownership versatility, management flexibility, and lax operating requirements.
By contrast, corporations must adhere to specific requirements (such as to hold annual shareholder meetings or keep extensive records), which make them very restrictive for most businesses.
As such, corporations are only recommended if you are seeking to attract investment. Refer to our LLC vs Corporation article for a more comprehensive comparison of the two.
In California, processing for online filings normally takes around 5 business days, while in-person filings are typically processed within 3 business days counter drop-off fee of $15 is required).
On top of this, 1-day expedited processing can be purchased for $350.
It is worth noting that the type of corporation you wish to elect can influence this. Our S Corp vs C Corp vs LLC article contains more information on this topic.
While not considered to be particularly difficult to start, corporations can be more tricky to run than other business types.
This is due to the more restrictive operating requirements that are imposed upon corporations.
We recommend checking our How to Run a Corporation article for more guidance regarding this topic.
In most cases, starting an LLC is considered easier than starting a corporation, though not by much. This is because the process involves fewer steps and is generally more affordable.
Moreover, corporations are generally regarded as more complex and formal due to their tighter ongoing requirements (e..g, hold shareholder meetings, record meeting minutes, etc.).
To learn more about the corporation business structure, make sure to check out our What is a Corporation article.