It is commonly known that each of the states have separate requirements for creating a corporation. No matter if you want to form your business from scratch or incorporate your existing business, you should completely master your state’s requirements.
California is considered to be the most populated states in the United States, with nearly 12% of the U.S population located there. For starting your business in California, you should implement some steps in accordance with the requirements of this state. Let’s try to understand all pros and cons of starting your business in California.
You don’t have to involve name endings in the name of your corporation, besides cases when the corporation is filed as a professional corporation where the name of your company should include “Incorporated.” “Company,” “Corporation,” “Limited.” In such cases, if you want to use the word bank in your company’s name, you should get the bank’s permission. Our advice: don’t use a bank’s name!
About Requirements for the Corporation’s Director
The Corporation can have three directors and two shareholders. There are no age requirements for becoming a director.
Requirements for the Certificate of Incorporation
The main document for forming a corporation in California is the Article of Incorporation. Each of the states have their own requirements concerning information for forming a document. Here are California’s requirements:
- Officer: Both the name and the address are not required to be included in the Article of Incorporation.
- Stock: Authorized shares and par value have to be mentioned in the Certificate of Incorporation, and if the number of shares increase, it will not influence your further fees.
- Registered Agent: Corporation should list both the name and the address of the registered agent in California.
There are also some additional requirements for forming a corporation in California. As a Corporation, you have to keep such items like bylaws and minutes of director and shareholder meetings in your California office.
About Fees and Taxes
If you decide to corporate in California, you have to file a Statement of information during the half-year period ending. The fee for the Statement of Information is $25. There is also a franchise tax of $800. However, the corporation should not pay this tax for the first year. If you are going to have employees in your corporation, you should obtain an EIN; also, you will need it for opening a business bank account. There is also a piece of good news: California does not require to have a state identification number.
If you decide to launch your business in California, you would also need a Business License. Prestige Auditors will help you complete all the necessary paperwork and choose the best type of entity which suits you more. Do not hesitate to contact us and we will organize your business on the fly!