Using California Business Incorporation

Form a business by starting a corporation in California

Making a new corporation is one of the most common reasons for using California business incorporation laws. A small business may prefer to file the documentation needed to incorporate a business directly with the state. There are also many companies that provide business formation services for a fee.

The most important factor in incorporating a business in California is choosing a specific business structure. California law makes some important distinctions between a corporation and a limited liability company (LLC).

Corporate law defines the way in which the following entities interact:

1. Shareholders that collectively invest in California incorporations. Shareholders may hold special privileges such electing a board of directors, proposing resolutions and sharing in the company’s income.

2. Directors that oversee the company’s activities. The activities of the board of directors are typically determined by the company’s bylaws. The board of directors and the shareholders are typically the same group of people in a small business.

3. Employees that provide expertise and perform labor for the company. Employees are also shareholders in many cases.

Select the best structure for your business when you incorporate in California

Your choice of business types can include corporations, full partnerships and limited partnerships. There are many sites that summarize business laws in California and you may also need an attorney to explain these laws to you.

Use a company to create an LLC in California

There are many online services that can submit the required forms on your behalf in exchange for a fee. However, you will still need to comply with the disclosure, operating and reporting requirements.

Create a California incorporation by yourself

Each state has a department that is responsible for the formation of new businesses. You can complete these forms yourself and submit them directly to the correct government department.
California Business Portal provides a range of expedited and pre- clearance services. The Department of Corporations has a Small Business Advocate that is dedicated to promoting small businesses in California.

• You will need to select a name before you create a California business LLC. Many online services provide a name search function to determine if a particular name has been used before. The required forms will also provide spaces for more than one business name in many cases. This increases the chances that an unused name can be found.

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