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State of California
Incorporation Requirements
Corporate Name Endings
The name must not be likely to mislead the public, be the
same as, or resemble so closely as to lead to deception, the
name of a domestic or qualified foreign corporation, a name
under reservation, or the registered or assumed name of a
foreign corporation. The name would need Superintendent of
Bank's approval if it contained the words "Bank,"
"Trust," or "Trustee."
Corporate Requirements
- Director Information
- Minimum Number - Not less than three, unless there
are only one or two shareholders of record; then the
number of directors may be less than three but not less
than the number of shareholders.
- Residence Requirements - No provision.
- Age Requirements - None.
- Directors are not required to be listed in the articles
of incorporation.
- Officer Information
- Officers are not required to be listed in the articles
of incorporation.
- Stock Information
- An increase in shares or par value does not effect
initial filing fees.
- Corporate Records
- An original or a copy of bylaws must be kept at the
principal executive office or principal business office
in the State of California. The minutes of directors'
and shareholders' meetings must be kept at the principal
office.
Taxes and Fees
- Annual Statements
- Domestic corporations must file with the Secretary
of State within 90 days after filing the articles or
incorporation. A statement of domestic stock corporation
must be filed annually by the end of the calendar month
during which the original articles of incorporation
were filed. The cost is $25.
- Foreign corporations must file an annual statement
by foreign corporation. The cost is $25.
- Income Tax Rate
- California imposes a franchise tax on both California
corporations (domestic) and non-California corporations
(foreign) for the privilege of doing business in the
state. The franchise tax is actually a tax of net income;
the rate is 8.84% of net income for corporations. S
corporations still must pay the franchise tax; the rate
is 1.5% of net income.
- California imposes a minimum franchise tax of $800.
So, even if your corporation does not have net income,
it still must pay this minimum tax. The minimum tax
does not have to be paid during the corporation's first
year; however, taxes based on income must be paid during
this first year.
- S Corporation
- S Corporation status is recognized by the State of
California, however, the corporation is still required
to pay franchise tax at a rate of 1.5% of net income.
A separate state election is required.
- License Requirements
- California may require that you obtain a business
license and pay a licensing fee based on your business
type or profession. Please check with the state to make
sure your business is complying with the license requirements
for your particular profession.
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