How To Form A C Corp In California
If you’re a business owner who has decided that they would like to file as a C Corp in California, it’s an exhilarating time. However, in the excitement of creating their first business, it’s crucial that business owners remain compliant with California law. Business owners should be diligent in following the steps necessary to file as a C Corp in California to ensure their new company remains in good standing.
Choose A Business Name
The first step new business owners must take to form a C Corp in California is to choose a business name. To do so, they should browse the “Business Search” database on the California Secretary of State’s website. The California Secretary of State updates this list every few days, so there’s a good chance that it’s relatively up-to-date.
Choose A Business Name
When searching for a business name, owners should ensure that it’s unique and recognizable from other business names already in use in the state. Additionally, companies should ensure that the name is not misleading about the business’ purpose.
Because there are so many businesses in the state of California, owners may find it difficult to come up with something unique that is still reflective of their business. But, owners should not sweat this too much, thanks to a form known as a DBA. A DBA, short for “Doing Business As,” allows corporations to operate under a name different than that on their state filings.
An example would be a corporation that files as “Wally Restaurant Holdings Corporation” but later files a DBA when it opens its first restaurant, “Gary’s Greek Gyros.”
Choose A Registered Agent
C Corps in California are required to have a registered agent on file with the Secretary of State’s Office at all times. The registered agent essentially serves as the middleman for the company. They are tasked with receiving legal correspondence and notice of litigation filed against the entity on the company’s behalf. They are required to pass these documents along to the company’s owners.
It’s crucial that business owners find a registered agent who they can trust. Failure to do so could mean that they won’t receive documents in a timely fashion, if at all. If a company misses critical documents, they could no longer be in good standing with the state of California. This, in turn, could result in late fees and possible dissolution.
The registered agent must have a physical address in the state of California. Additionally, the agent must be at this address during regular business hours. California corporations may want to consider hiring a third-party registered agent company, such as DoMyLLC, who has years of experience acting as a registered agent in the state of California.
Draft Articles Of Incorporation
After securing a registered agent, new California businesses can begin to draft their Articles of Incorporation. These forms are available for download from the California Secretary of State’s website. Owners will find instructions on how to best complete these forms upon downloading.
The Articles of Incorporation are a matter of public record and help clarify some aspects about the business, including the company name and purpose. The Articles of Incorporation will also contain information about the registered agent as well as information about the number of shares the corporation is authorized to issue. It costs $100 to file the Articles of Incorporation in the state of California.
Establish A Corporate Records Book
It’s essential that corporations have a corporate records book. This book should contain all of the paperwork critical to the business’ operations, such as a copy of the Articles of Incorporation, the minutes of all director and shareholder meetings, and stock certificates. The corporate records book should be kept in a secure location at the corporation’s principal office.
After filing as a C Corp in California, it’s easy for new business owners to drown in paperwork. Having a designated corporate records book can help ensure that critical documents all remain in one distinct location so that they can be accessed easily at any time.
Prepare The Corporate Bylaws And Appoint Corporate Directors
Although new business owners should have an idea of how they would like their company to be run, they should now take the time to prepare the final version of the corporate bylaws. The corporate bylaws are the internal documents that establish how the C Corp in California will be run. Maintaining corporate bylaws is required by the state of California. But, having it on hand could go a long way toward establishing credibility. Having a set of corporate bylaws could boost a company’s standings among customers, banks, creditors, and the IRS.
Additionally, the owner of the corporation should then appoint the initial corporate directors. The initial corporate directors will serve on the corporation’s board until the first annual meeting of the shareholders. Of course, there cannot be a yearly meeting of the shareholders until the corporation begins selling shares. Once there are shareholders in place, they will vote upon the corporation’s board members.
To appoint the Initial Corporate Directors, the state of California recommends the incorporator to complete an “Incorporator’s Statement.” This form will show the names and addresses of the initial directors. A copy of this form should be kept in the corporate records book.
After the Initial Corporate Directors have been appointed, the corporation should hold its first Board of Directors Meeting. At this point, the corporate directors can elect corporate officers, choose a corporate bank, and adopt the bylaws. They can also authorize the issuance of stocks and shares, as well as select an official stock certificate form and corporate seal. It’s crucial that the corporate directors keep diligent minutes at this meeting.
DoMyLLC Can Help
In addition to serving as a registered agent for your company, DoMyLLC can also assist when it comes to filing paperwork with the state of California. We are here to help ensure you file paperwork correctly so that the state of California will recognize you as a C Corp.