How to Incorporate a Business in California

How to Incorporate a Business in California. A corporation refers to several different types of legal entities that are made up of individual people or corporations. They maintain a separate legal status from the people or businesses from which they are comprised, thus protecting those people and businesses. In California, it is relatively simple to incorporate a business.

Visit the California Business Portal (see Resources, below) for direct access to the forms needed for incorporation. You can also call (916) 657-5448 to contact the Secretary of State's office.

Verify that the name you wish to use for your corporation is available. This can be done by sending a Name Availability Inquiry Letter to the state department in Sacramento. There is a fee involved.

Reserve the name you wish to use for your corporation immediately upon receiving confirmation that it is available. You can do this by completing the Name Reservation Request Form and remitting it to the California State Department. There is a fee required for completion.

Complete and remit your Articles of Incorporation to the state department. The Articles of Incorporation include important information about your corporation such as the number of officers in the company and their names and the company's name. There is a fee for processing the Articles of Incorporation.

Expect the entire process to take between 6 and 8 weeks. This is dependent upon the length of time required for the paperwork to be processed. Once completed, you'll receive a copy of your Articles of Incorporation and your Employer Identification Number (EIN).

Tips

  • It is not necessary to have a lawyer or some form of legal counsel to incorporate a business in California. Even so, it is a good idea, particularly for new business owners, to seek advice from experts in the field.

Warnings

  • Be careful using an online service to incorporate a business in California. The state charges fees for incorporation, so read the terms and policies of the online service to make sure you are clear on the additional fees they charge. While incorporating separates a person's personal assets and credit rating from the business's assets and credit rating, certain procedures must be followed to ensure that a shareholder isn't liable for the corporation. These include holding an annual shareholders' meeting, holding a board of directors' meeting, keeping accurate minutes of these meetings, maintaining separate bank accounts and so forth.

Resources

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