Instructions Forming a California Corporation

Transcription

1 Contact Information State Business: Entities Department: California Secretary of State Business Entities Mailing Address: PO Box Sacramento, CA Physical Address: Phone: Facsimile: Website: Entity Search: Forms & Instructional Video: Statutory Authority: General Corporation Law Cal. Corp. Code 1-1 (2011) Forms Name Availability Inquiry Letter Name Reservation Request Form Articles of Incorporation of a General Stock Corporation SI-200 Statement of Information Letter of Transmittal IRS Form SS-4 Application for Employer Identification Number IRS Form 2553 Election by a Small Business Corporation (used if electing S-Corporation tax filing status) General filing instructions 1. Confirm availability of company name. 2. Complete the Articles of Incorporation. a. The following information is legally necessary and sufficient to form a corporation in California: i. Company name ii. Company street and mailing address iii. Purpose iv. Registered agent name and address v. Quantity of authorized shares vi. Incorporator signature and printed name b. Optional provisions: Although generally not recommended absent a compelling business reason or the advice of an attorney, any provision which is required or permitted by any section of California General Corporation Law to be stated in the bylaws may instead be stated in the Articles of Incorporation. c. If expedited service is required see the Preclearance and Expedited Filing Services page on the Secretary of State s website. 3. Complete Letter of Transmittal. 4. Submit your completed documents, along with a photocopy of each and your filing fees, to the California Secretary of State. Submissions may be made by mail or counter service. Page 1 of 5

2 Fee Schedule Name Reservation (optional reserves your name for 60 days) Mail $10.00 Counter Service $20.00 Articles of Incorporation Filing Fee (mail) Standard Processing Time $ Filing Fee (counter service) $ Expedite Processing time 4 hour $ Processing time Same day $ Processing time 24 hour $ Certified Copy $5.00 Initial Statement of Information Statement of Information Must be filed within 90 days of filing the Articles of Incorporation. $25.00 Annual Statement of Information & Business License Statement of Information $25.00 Franchise Tax (minimum) $ Company name Select at least three names for your business. It must end with a corporate designator. In California the specific designators are: Corporation Incorporated Limited Corp. Inc. Ltd. Conduct an entity search by mailing a Name Availability Inquiry Letter and a self-addressed envelope to: Secretary of State Name Availability Unit If the name you want is available you can reserve it by mail. The name reservation fee is $ Your name will be reserved for 60 days. Submit the Name Reservation Request Form and a self-addressed envelope to: Secretary of State Name Availability Unit NOTE: Reserving your company name is optional. When selecting your company name you need to take the following into consideration: 1. Your company name should be unique, easily remembered and pronounced, and set you apart from your competition. 2. Your company name must be available, i.e., your proposed name cannot be the same as or similar to an existing corporation. 3. Check domain name availability if you want your URL or domain name to be the same as or similar to your company name you ll need to verify that your desired company name is available as a domain name. 4. Verify that your company name does not conflict with any trademark or service mark by going to 5. Verify that your company name does not conflict with any copyright by going to Incorporator The incorporator is the person who completes, signs, and files the Articles of Incorporation with the state. The only legal requirement for the incorporator is that they be at least 18 years old. The incorporator does not need to be a shareholder, director, officer, or employee of the corporation. For a fee, you can retain an attorney, accountant, or document filing service to be the incorporator. Page 2 of 5

3 If you complete, sign, and file the Articles of Incorporation, then you are the incorporator. Registered agent The registered agent maintains a physical presence in the state to accept service of process, annual report notices, and other communications directed to the company and to forward the same to the company to which the service, notice, or communication is directed. California law requires that every business entity have and maintain a registered agent in the state. The registered agent may be either a California resident or active California 1505 corporation that has a California street address and consents to accept legal papers on your company s behalf. NOTE: Your company should not act as its own registered agent. You can, however, personally serve as registered agent provided you are a California resident and have a California street address. Visit if you need help selecting a registered agent. Principal place of business The principal place of business must be the actual physical location of the business. It may not be a post office box. If your corporation is based out of your home, your home address will serve as the business address. Company inception date Your company inception date will be the date your Articles of Incorporation is formally accepted and filed by the California Secretary of State. Company duration Unless stated otherwise, California allows your corporation to have perpetual duration, i.e., your corporation can exist forever. Unless there is a compelling business reason to limit the life of the corporation or upon the advice of an attorney to do so, there is no need to amend the Articles of Incorporation. Tax filing status Unless you elect otherwise on IRS Form 2553 your corporation will be taxed as a C-corporation. C-corporations report their income and expenses on IRS Form S-corporations use IRS Form 1120S. Accounting year For accounting purposes, your accounting year (calendar or fiscal) should be specified in advance of preparing the bylaws. Consult with a qualified tax and accounting professional to determine what is best for your particular circumstances. Accounting method For accounting purposes, your accounting method (cash or accrual) should be specified in advance of preparing the bylaws. Consult with a qualified tax and accounting professional to determine what is best for your particular circumstances. Business purpose California permits and includes a general-purpose clause on the Articles of Incorporation: 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. NAICS code California does not require you to specify a NAICS code. Page 3 of 5

4 Quantity, class, and par value of authorized shares California does not base their filing fee on the quantity or par value of authorized shares you specify in the Articles of Incorporation. Therefore, you can authorize as many shares as you wish, with or without par value. Bylaws The corporate bylaws govern how you will manage and operate your corporation and conduct its affairs. The bylaws delineate the rights, powers, and duties of the corporation as well as the rights, powers, and duties of its shareholders, directors, officers, and employees. The bylaws do not supersede California state law or any provision of your Articles of Incorporation. After you receive notice that your Articles of Incorporation has been accepted by the state, you will prepare and adopt bylaws. Shareholders The owners of the corporation are shareholders. You must have at least one shareholder. Directors The directors of the corporation have the ultimate authority and responsibility for managing the corporation. You must have at least one director. Officers The officers of the corporation are statutory officers and usually include a president, secretary, and treasurer. One person may hold all the offices. You must have at least one officer who, at a minimum, shall have the duty to record the proceedings of the meetings of the stockholders and directors in a book to be kept for that purpose. Optional provisions The state provided forms and these instructions ask for and specify what is legally sufficient and necessary to form a California corporation. Nevertheless, California General Corporation Law permits you to add other provisions to your Certificate of Incorporation. Optional provisions include anything the law permits to be in the bylaws. The most common optional provisions are the following: Terms and qualifications of directors Terms and qualifications of officers Indemnification of directors Indemnification of officers Powers, rights, and responsibilities of shareholders Powers, rights, and responsibilities of directors Powers, rights, and responsibilities of officers Designation of different classes of stock Preemptive rights Cumulative voting rights Close corporation election If you need to include optional provisions in the Articles of Incorporation you should consult an attorney. Page 4 of 5

5 Post-formation Apply for a Federal Employer Identification Number (FEIN) on IRS Form SS-4. If electing S-Corporation status, file IRS Form 2553 within 75 days of when election is to take effect. Hold an initial organizational meeting, prepare and adopt bylaws, prepare and adopt resolutions, appoint directors and officers, and issue shares. Open a company bank account. Within 90 days of filing the Articles of Incorporation you must file form SI-200 Statement of Information and include a $20.00 filing fee and $5.00 disclosure fee. Comply with state and local labor and revenue requirements. Ongoing compliance File form SI-200 Statement of Information annually. Pay the $800 minimum California franchise tax by the 15th day of the 3rd month after the close of your corporation s tax year. Protect the corporate veil as well as the shareholders, directors, and officers of the company by adhering to the following: Hold scheduled shareholders and directors meetings the date, time, and place for your meetings should be specified in the bylaws and should be scheduled regularly Hold special meetings when matters of importance come up: entering into a lease, opening a bank account, entering into a significant contract, entering into an employment agreement with key personnel, considering the sale or dissolution of the company Keep impeccable records record meeting minutes, maintain a company record book, maintain a stock ledger reflecting the stock ownership of the corporation and the names and addresses of the shareholders Draft formal resolutions resolutions should be drafted in matters such as the following: officer compensation, contract authorization, property acquisition, loans and guarantees, bank designations, dividend declarations, share issuance, asset purchases and sales, employee benefit plan adoption, financial statement and audit report approval Remember your fiduciary duty to the corporation the directors and officers must always do what is in the best interest of the company and shareholders and keep company matters confidential Sign all documents as an officer in the name of the corporation use a signature block in substantially the following form: By: Company name with designator Officer Title Never comingle all corporate purchases should be made in the name of the company, segregate company assets from personal assets, never use company assets for personal use, maintain company funds in a company account separate from personal accounts, maintain current financial records Always comply with state rules and regulations, corporate charter, bylaws, organizational documents, and contractual obligations; file all appropriate federal, state and local tax returns and pay taxes when due; obtain all necessary permits and licenses Sufficiently fund the company maintain adequate capitalization and operating capital Page 5 of 5