With our 5-step process, forming a company in California is simple. A company may be formed by submitting formation paperwork with your state and forming a board of directors.
We’ll teach you how to form your own company in California.
In California, it is simple to form a corporation.
Table of Contents
To get started, follow the steps in our How to Start a Corporation in California tutorial below:
Step 1: Give Your Company a Name
Step 2: Select a Registered Agent.
Hold an Organizational Meeting in Step 3
Step 4: Submit your Articles of Incorporation.
Step 5: Submit the Information Statement.
Step 6: Obtain an EIN
Step 1: Give Your California Corporation a Name
The first step in forming a company is to choose a business name. You must choose a distinct name that conforms with California company naming regulations.
1. California naming guidelines:
The words “corporation,” “business,” “incorporated,” “limited,” or an acronym of one of these keywords must appear in your name.
Your name must be distinct from any other businesses in your state. On the California Secretary of State’s website, you may learn more about what distinguishes a name.
Without the consent of the Commissioner of Business Oversight, you may not use the terms “bank,” “trust,” “trustee,” “credit union,” or similar phrases in your name.
Your company’s name cannot include terms that may be confused with a government organisation (FBI, Treasury, State Department, etc.).
For further details, see the California state legislation on corporate name rules.
2. Is my business name accessible in California?
Your California company name must be distinct and distinct from other California business names. To see whether your selected company name is available, use the California Secretary of State’s Business Search Portal.
Visit our How to Name a Business guide and pick California from the drop-down box for further information on California corporation name searches.
3. Is the URL accessible?
Before forming your California company, check to see whether an appropriate URL for your preferred business name is accessible. Even if you don’t intend to create a company website right immediately, we recommend purchasing a web domain right away to avoid other companies from obtaining it.
Step 2: Choose a California Registered Agent
You must appoint a California agent for service of process, also known as a registered agent, when you register your corporation with the Secretary of State.
What exactly is a Registered Agent? A registered agent is a person or organisation chosen by an LLC or corporation to accept service of process, government communications, and compliance paperwork on behalf of a company.
Who Is Eligible to Be a Registered Agent? An person, a corporate organisation, or a professional registered agent service may serve as your registered agent. Any member of the corporation or individual can serve as your California agent for service of process as long as the person:
is at least 18 years old
has a physical address in the state where business is done
is accessible during regular business hours (in person).
Step 3 Hold an Organizational Meeting
Before filing the Articles of Incorporation formally in Step 4, you must conduct an organisational meeting to perform the following tasks:
Complete and sign the Articles of Incorporation.
Establish and approve bylaws
Choose your first director (s)
Determine your ownership structure.
Fill out an Incorporator’s Statement.
Establish and Approve Corporate Bylaws
Bylaws are the rules that regulate and control how your organisation is governed and operated. Consider the bylaws to be your corporation’s constitution. It clarifies the norms and priorities for all parties involved.
The bylaws of a company will augment any regulations established by the federal government or the state.
Include the following in your bylaws:
The governance of the company, including the roles of directors and officials
Meeting processes, voting procedures, and the election of executives or directors
How will records be preserved and managed?
How will disagreements be resolved?
How will bylaws be added/modified in the future?
The annual shareholder meeting date
Contract Negotiation Techniques
Fiduciary responsibilities to the company (i.e. acting in the best interests of the corporation)
What is a quorum for voting purposes?
What exactly is a quorum? A quorum is the minimal number of members who must be present at a meeting in order for the meeting’s actions, including any votes, to be legitimate.
Appoint the First Directors
A minimum of one director must be appointed to monitor your California business until the first shareholder meeting.
A corporate director is in charge of operational bylaw adoption, modification, and repeal, as well as the election, monitoring, and removal of officers.
Following the incorporation of the company, the incorporator(s) — or initial director(s), if listed on the formation papers — shall convene an organisational meeting. During this inaugural meeting, either the incorporator(s) or the initial director(s) will elect the board of directors.
Selecting a Share Structure and Strategy
A share of stock is a corporation’s unit of ownership. Each share of stock reflects a proportion of the company’s ownership. If a business issues one share of stock, the shareholder (stock owner) owns 100% of the corporation.
Shares may be divided into classes. Each class, known as a share class, has unique rights and advantages. There may be several classes, and each class can have an unlimited number of shares.
The California Secretary of State’s Articles of Incorporation form may only be used to incorporate a company with one share class. You must write your own Articles of Incorporation if the organisation requires a multiple share class structure.
NOTE: We suggest that you begin with a large number of authorised shares. Many lawyers advocate for a million dollars. Starting with a large number allows you to issue shares as required without incurring legal expenses to enhance your original permitted share size.
Make and implement an Incorporator’s Statement
The incorporator(s) shall sign and preserve an Incorporator’s Statement with the full names and addresses of all initial directors in the corporate records book.
This document identifies the first director(s) who will serve until the board of directors is chosen at the first shareholder meeting. It should be kept with the rest of your company’s records.
Step 4: Submit the Articles of Incorporation to the State of California.
To form a company in California, you must submit the California Articles of Incorporation. The Articles of Incorporation are the legal documents that establish your California company. You may file it with the Secretary of State either by mail or in person. The fee for filing is $100.
Please keep in mind that California has eliminated corporate formation costs from July 1, 2022 to June 30, 2023.
This paper will address the fundamentals of your company, such as:
Name of the company and its primary address
Name and street address of the corporate service agent
The number of authorised shares that a company may issue.
Step 5: Submit the California Information Statement.
Within 90 days after registering your California company, you must complete the California Corporate Statement of Information form. After that, you must file every other year. The Corporate Statement of Information form comes with detailed instructions. The application cost is $25.
Get an EIN for Your California Corporation in Step 6
What exactly is an EIN? The federal government uses an Employer Identification Number (EIN) or Federal Tax Identification Number (FTIN) to identify a company organisation. It is effectively the company’s social security number.
Why do I need an EIN? An EIN is necessary for the following activities:
To establish a commercial bank account for the firm
In terms of federal and state taxation
To recruit workers for the firm
How can I get an EIN? After founding the firm, the business owner obtains an EIN from the IRS (free of charge). This may be done online or in the mail. For additional information, see our EIN Lookup guide.