How to Incorporate in CaliforniaInstructions on California Incorporation
What will it cost to incorporate in California?
$100 California articles of incorporation filing fee
What are the costs involved in forming a California LLC?
California LLC articles of organization will cost $70
How long will it take to get my California incorporation or California LLC processed?
It will take the California Secretary of State about 25 business days to process your California incorporation if you file via paper. If you pay an additional expedite fee the state will process your filing in 1-3 business days.
What am I going to be looking at for ongoing fees to California?
California corporations must file an initial report (California statement of information) within 90 days of incorporation and the fee is $25.
The California Secretary of State requires an annual report for corporations. The annual report will cost $25 and is due by the end of your anniversary month. We recommend filing this online.
An initial report is due within 90 days of filing of an LLC and the fee is $20.
You will have biennial reports due by the end of the month of your LLC anniversary filing date and the fee will be $20.
What are the California business taxes?
When you incorporate in California, you will subject yourself to California corporate net income tax rates of 8.84% of your net taxable income. You can declare your California corporation a California S corporation or if you form a CA LLC, it’s defaulted to you paying your income tax personally. Most people pay 9.55% personal income tax for net taxable income between $47,000 and 1 million.
CA S corporations are also required to pay 1.5% tax on the net income even though they have opted to pay the income tax personally. California is the only state that goes completely against the entire point of having an S corporation election with the IRS. As you can see, you'll reach a point around 35,000 to 47,000 of net taxable income, where it would actually be cheaper to have a C corporation and pay the 8.84% corporation tax, and thus keep your name totally off of the tax return. That doesn't make a whole lot of sense does it?
If you have an CA LLC and are taxed as a disregarded entity, you can avoid the 1.5% S corporation California tax, but then if you're still around the $35,000 taxable income level, you'll miss out on saving about 15% on what you could pay yourself in dividends.
The average California sales tax rate is 9.06% (the state has a 8.25% tax, but the average local tax is .81% making a total of 9.06%).
All California incorporations or LLC formations are subject to the CA Franchise Tax Board’s minimum $800 payment. Even if you didn’t make a dime, you still owe California $800.
When we Incorporate your business in California, our incorporation service includes:
All for a total of only $295 for a California LLC or $325 for a California Corporation.
Northwest Registered Agent, Inc.
Redding, CA 96001