California Corporation

You can get an EIN directly from the IRS. The application is free, and most businesses can apply online. However, if you don’t have a social security number, you’ll need to submit a paper application form. Can’t bear to fill out yet another application? Hire Northwest to get your EIN for you. Just add on EIN service during checkout when you sign up for our incorporation service.

Corporate bylaws cover basic policies and procedures for issues such as company finances and management. Bylaws should cover a range of topics, answering key questions like those below:

• Meetings: When and where will meetings for shareholders and directors be held? How many attendees are required to transact business? What are the procedures for voting or proxy voting? How do you call a special meeting? What actions can be taken without a meeting?

• Stock: How are stock certificates issued and transferred? How is voting affected by issues such as corporate stock owners or fractional shares?

• Directors and officers: How many directors must there be? Which officer positions are required? What powers do they have? How do you fill a vacancy or remove a director or officer?

• Finances: What are the procedures for retaining profits, issuing dividends, and paying bills? Who can withdraw money from the corporate bank account or sign checks?

• Records: Where is the corporate book to be kept? What information will be maintained? How are requests for review or access honored? Can records or copies be kept or distributed digitally?

• Amendments and emergencies: Who can amend bylaws and how? Can emergency bylaws be adopted in the case of disaster?

California bylaws can also make other provisions and go into more detail on the above topics, assuming additions are in accordance with state law. For example, CA Corp Code § 212 states that California bylaws can determine the qualifications, duties, and compensation of directors.

Creating bylaws can be overwhelming—where do you start? Northwest can help. We give you free corporate bylaws when you hire us to form your California corporation. We know what kinds of topics and questions corporations need to address, and we’ve spent years refining and improving our forms. We offer many other free corporate forms as well, including templates for resolutions and meeting minutes.

The California Statement of Information filing fee is $20, plus a $5 disclosure fee ($25 total). If you file late, you receive a 60-day grace period before you’re hit with a $250 late fee.

Your initial statement of information is due within 90 days of your corporation’s formation. When you hire Northwest Registered Agent to form your corporation, we will file your initial statement of information for you!

In subsequent years, the statement is due by the last day of your anniversary month (the month your corporation formed).

These filings can be easy to forget—which is why we send our clients automatic reminders. Or better yet, let us file for you. With our business renewal service, we can complete and submit your annual report for you for $100 plus the state fee.

Regardless of whether your corporation is taxed as an S corp or C corp, plan on paying at least $800 a year in entity-level taxes.

S corps in California are responsible for paying the state’s franchise tax, which is essentially a tax for the privilege of doing business in the state. The franchise tax rate for S corps is 1.5%, with a minimum payment of $800. The tax return and payment are due by the 15th day of the 3rd month after the close of your corporation’s taxable year. (For example, if your corporation’s tax year ends in February, your tax return would be due by April 15.)

C corps are also responsible for paying the state’s franchise tax (alternatively referred to as corporate income tax). The minimum tax owed is still $800, though the rate is significantly higher than for S corps—8.84%. The tax return and payment are due by the 15th day of the 4th month after the close of your corporation’s taxable year. (For example, if your corporation’s tax year ends in February, your tax return would be due by May 15.)

An exemption to the franchise tax occurs if your corporation’s tax year is 15 days or less, and if no business was conducted during that time.

California corporations should also be aware of the state’s sales tax, which is 6%. City, county and specialty sales taxes can be tacked on as well. The highest sales tax rate in the state can be found in Santa Fe Springs, at 10.5%, though the state’s average is 8.258%.

Yes. All businesses are required to file returns with the Franchise Tax Board. You can register by creating an account with MyFTB.

The filing fee for Articles of Incorporation is currently $0 (until June 30, 2023!). Within 90 days of filing, the initial statement of information is due and costs $25 ($20 for the statement of information + a $5 disclosure fee). So, the minimum grand total for forming a California corporation is $25.

Expedited processing can be yours if you’re willing to dig into some deep pockets—same-day processing is $750 and 24-hour processing is $350. (Expedited service is suspended during the COVID-19 pandemic.)

Processing times vary based on your filing method. If your articles are dropped off or mailed, it could take as long as 4 weeks for them to process. If filed online, it may take up to two weeks during busy periods, but is usually much faster.

Yes. California corporations are required to have a business license, but the state doesn’t actually issue licenses itself. Instead, licenses are issued at the local level. You’ll have to apply for your necessary license(s) from the city and/or county where your LLC is registered. For example, Santa Monica requires all those conducting business within the city limits to obtain a general business license. The same is true in San Jose, though the license is called a Business Tax Certificate.

For some license applications you may need an EIN or a certified copy of your Articles of Incorporation. At Northwest, we can streamline the process and get these for you—simply add on these items during checkout.

A corporation formed outside of California—but which conducts business in the state—is considered a foreign California corporation. For example, if you incorporated in Oregon but decide to open a storefront in California, you would be a foreign California corporation. This also means you would need to register with the state by filing a Statement and Designation by Foreign Corporation with the California Secretary of State. Foreign corporations are required to file the California Statement of Information each year as well.

Absolutely! We’re happy to start a nonprofit corporation for you. Note that incorporating a California nonprofit requires a different form and the filing fee is lower. California nonprofits may not need to file the state’s franchise tax but must file a statement of information every two years ($20).

It’s a conundrum: you need a local number to display on your website and give to customers, but you don’t want to make your personal number quite so…public. We get it. And we’ve got you covered with Northwest Phone Service. We can provide you with a virtual phone number in any state—plus unlimited call forwarding and tons of easy-to-use features. You can try Phone Service free for 60 days when you hire us to form your corporation, and maintaining service is just $9 monthly after that. No contract required.