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Business Formation Guide
corp formationUpdated 2026-03-30

How to Incorporate in California (2026)

Incorporating in California requires filing Articles of Incorporation with the Secretary of State, paying a $100 filing fee, and meeting state-specific requirements under California Corporations Code § 200. Your corporation's existence begins upon filing and continues perpetually unless otherwise provided by law. This guide walks you through each step to establish a legally recognized business entity in California.

Step 1: Choose and Reserve Your Corporate Name

Your corporation's name must be distinguishable in the Secretary of State's records from all existing corporations, foreign corporations authorized to do business in California, reserved names, and registered foreign corporation names. Under Cal. Corp. Code § 201(b), the Secretary of State will reject any name likely to mislead the public.

You must include a corporate designator in your name. Use "corporation," "incorporated," "limited," or an abbreviation of one of these words. If you plan to operate as a close corporation, the designator is mandatory.

Certain words are restricted. You cannot use "bank," "trust," "trustee," or related words without a certificate of approval from the Commissioner of Financial Protection and Innovation. If your business involves professions like law, medicine, or accounting, you may need additional approvals.

Search for Available Names

Search for available names at https://bizfileonline.sos.ca.gov/search/business. This free search tool shows you which names are already taken or reserved. Check this before paying the reservation fee to avoid wasting money.

The search covers all business entities registered in California, including corporations, LLCs, and foreign entities. Search multiple variations of your preferred name to identify the best available option.

Reserve Your Name (Optional)

Reserve your name before filing articles by paying the $10 name reservation fee to the California Secretary of State. Your reserved name is held for 60 days under Cal. Corp. Code § 201(e). You cannot reserve the same name for consecutive 60-day periods, and the Secretary of State will not issue consecutive reservations to the same person for similar names.

A name reservation is optional but recommended if you need time to prepare your Articles of Incorporation before filing. The 60-day reservation period gives you a window to complete your incorporation documents without risking someone else registering your chosen name.

Step 2: Appoint Your Initial Directors

California requires a minimum of one director under Cal. Corp. Code § 200. You may name initial directors in your Articles of Incorporation, or you may leave this blank and have the incorporators serve as directors until the first shareholders' meeting.

Directors do not need to be California residents. Cal. Corp. Code § 200 imposes no residency requirement. Directors can be individuals or, in some cases, entities, but they must be at least 18 years old if they are natural persons.

Naming Directors in Your Articles

If you name initial directors in your articles, each director must sign and acknowledge the articles. If you do not name initial directors, the incorporators (the people filing the articles) become the initial directors.

Consider your governance structure early. Will you have one director or multiple? If multiple, will you stagger their terms or elect them all annually? These decisions affect your bylaws and future shareholder meetings.

Step 3: Prepare Your Articles of Incorporation

Your Articles of Incorporation must include specific information under Cal. Corp. Code § 202. This is the foundational document that establishes your corporation.

Required Information

Your Articles must include:

  • Corporate name (with designator: corporation, incorporated, or limited)
  • Purpose statement — typically "to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of California other than the banking business, the trust company business or the practice of a profession permitted to be incorporated by the California Corporations Code"
  • Registered agent name and California street address — this person or entity receives legal documents on behalf of your corporation
  • Principal office street address in California
  • Mailing address (if different from principal office)
  • Authorized shares — the total number of shares your corporation is authorized to issue (e.g., 1,000 shares of common stock)

If your corporation will issue multiple classes or series of shares, you must describe the rights, preferences, privileges, and restrictions of each class or series.

Keep Articles Simple

You do not need to list shareholders, officers, or detailed bylaws in the articles. Keep the articles simple and flexible; detailed governance rules belong in your bylaws.

Step 4: File Articles of Incorporation with the Secretary of State

File your Articles of Incorporation online through the California Secretary of State's BizFile system at https://bizfileonline.sos.ca.gov/. Online filing is the fastest and most reliable method.

Filing Fee and Requirements

The filing fee is $100.00 (as of 2026). Pay this fee when you submit your articles online. The Secretary of State accepts credit cards and electronic payment.

Submit your completed Articles of Incorporation form (available on the Secretary of State website), proof that your registered agent consents to serve under Cal. Corp. Code § 17701.13, and payment of the $100 filing fee.

Processing Timeline

The Secretary of State typically processes online filings within 1-2 business days. You will receive a file-stamped copy and a file number via email.

If filing by mail, send your documents to:

California Secretary of State 1500 11th Street Sacramento, CA 95814

Mail filing takes longer (5-10 business days) and is not recommended. Use online filing at https://bizfileonline.sos.ca.gov/.

Your Corporation's Effective Date

Your corporation's existence begins upon filing of the articles, not upon receipt of the file-stamped copy. Keep your file number and stamped articles for your records.

Step 5: Appoint a Registered Agent

Your registered agent is the person or entity authorized to receive legal documents (service of process, lawsuits, regulatory notices) on behalf of your corporation. Under Cal. Corp. Code § 17701.13, your registered agent must be either:

  • A natural person who is a California resident, at least 18 years old, or
  • A corporation or LLC authorized to do business in California

Your registered agent must have a physical street address in California (not a P.O. box). A member of your corporation can serve as registered agent.

Obtaining Consent

Obtain written consent from your registered agent before naming them in your articles. The Secretary of State requires proof of consent. Most registered agents provide a consent form you can include with your filing.

Changing Your Registered Agent

You can change your registered agent later by filing a Statement of Information (Form LLC-12, $20 fee) or an Amendment (Form LLC-2, $30 fee). There is no standalone form to change only the registered agent.

The Secretary of State cannot serve as your registered agent. You must appoint a private individual or business entity.

Step 6: Adopt Bylaws

Bylaws are the internal rules governing your corporation's operations. They are not filed with the Secretary of State but are kept by your corporation. Bylaws address:

  • Meeting procedures for shareholders and directors
  • Director and officer duties and powers
  • Stock issuance and transfer rules
  • Dividend and distribution policies
  • Amendment procedures

Adoption and Flexibility

You do not need to file bylaws with the Secretary of State. Adopt bylaws at your first board meeting or by written consent of the initial directors. Bylaws can be amended by the board or shareholders as needed.

Consider adopting bylaws that allow directors to act by written consent (without a meeting) and shareholders to act by written consent. This flexibility is especially useful for small corporations.

Indemnification Provisions

Your bylaws should address indemnification of directors and officers. Cal. Corp. Code § 317 permits corporations to indemnify directors and officers for expenses, judgments, and settlements incurred in good faith, subject to certain conditions. You can expand indemnification rights in your bylaws or articles.

Step 7: Issue Stock Certificates

After incorporation, issue stock certificates to your shareholders. Stock certificates represent ownership in your corporation. Each certificate should show:

  • Corporation name and file number
  • Shareholder name
  • Number and class of shares
  • Date of issuance
  • Authorized signature(s)

You do not need to file stock certificates with the Secretary of State. Keep them in your corporate records.

Electronic Records Alternative

Alternatively, you can maintain a stock ledger (register of shareholders) without issuing physical certificates. Many modern corporations use electronic records instead of paper certificates.

Maintain a stock ledger showing:

  • Shareholder names and addresses
  • Number of shares held by each shareholder
  • Date of issuance
  • Any transfer or cancellation of shares

This ledger is required under California law and must be available for inspection by shareholders.

Step 8: Obtain an Employer Identification Number (EIN)

Apply for a federal Employer Identification Number (EIN) from the IRS, even if you have no employees. You need an EIN to open a business bank account, hire employees, file federal tax returns, and obtain state tax registration.

How to Apply

Apply online at https://www.irs.gov/ein or by mail using Form SS-4. Online application is instant; you receive your EIN immediately.

You do not need to wait for your Articles of Incorporation to be filed before applying for an EIN. You can apply as soon as you have decided on your corporation's name and structure.

S-Corporation Election

If you plan to elect S-Corporation status for federal tax purposes, you will need your EIN to file Form 2553 with the IRS.

Step 9: Register for California State Taxes

Register with the California Franchise Tax Board (FTB) for state income tax purposes. California imposes a corporate income tax of 8.84% on C-Corporations and 1.5% on S-Corporations, plus a minimum franchise tax of $800 per year under Cal. Rev. Tax Code § 23153.

Minimum Franchise Tax Requirement

The minimum franchise tax is $800 annually, due on or before the 15th day of the fourth month after the close of your tax year (typically April 15 for calendar-year corporations). This tax applies from the date of incorporation until dissolution.

Register online through the California Secretary of State's online filing system or contact the Franchise Tax Board directly. You will receive a corporation number for state tax purposes.

Critical Compliance Note

Even if your corporation has no income, you must pay the $800 minimum franchise tax each year. Failure to pay results in penalties and potential forfeiture of your right to do business in California.

S-Corporation Election

If you elect S-Corporation status, you must file Form 2553 with the IRS and Form 100-S with the California FTB within specified deadlines.

Step 10: Obtain Business Licenses and Permits

California does not issue a state-level general business license. Instead, you must obtain licenses from your city and/or county. Requirements vary by location and industry.

Common Licenses and Permits

  • City business license — required by most California cities; contact your city clerk's office
  • Seller's permit — required if you sell tangible goods; apply to the California Department of Tax and Fee Administration (CDTFA)
  • Professional licenses — required for certain professions (law, medicine, accounting, etc.); contact the relevant state board
  • Health permits — required for food businesses, restaurants, and similar operations; contact your county health department
  • Building and zoning permits — required if you occupy a physical location; contact your city planning department
  • Home occupation permit — required if you operate a business from your home; contact your city

Using CalGold

Use the California Business Portal (CalGold) at https://www.calgold.ca.gov/ to identify licenses required for your specific business and location. CalGold provides a checklist and links to the appropriate agencies.

Most cities require you to obtain a business license before opening. Failure to obtain required licenses can result in fines and closure orders.

Step 11: Open a Business Bank Account

Open a business bank account in your corporation's name. You will need:

  • Your Articles of Incorporation (file-stamped copy)
  • Your EIN letter from the IRS
  • Your corporate bylaws
  • Proof of your registered agent's address
  • Personal identification for the person opening the account

Protecting Your Liability Shield

A business bank account separates your personal finances from corporate finances, which is essential for liability protection and tax compliance.

Do not commingle personal and corporate funds. Doing so can result in "piercing the corporate veil," which exposes you to personal liability for corporate debts.

Step 12: Hold Your First Board Meeting

Hold your first board meeting (or take action by written consent) to:

  • Adopt bylaws
  • Elect officers (president, secretary, treasurer, etc.)
  • Authorize issuance of stock
  • Adopt a corporate seal (optional)
  • Approve banking resolutions
  • Authorize the registered agent

Written Consent Alternative

You do not need to hold a formal meeting. Directors can take action by written consent under California law. Prepare a written consent form signed by all directors, documenting the actions taken.

Keep minutes or a written consent form in your corporate records. These documents prove that corporate actions were properly authorized.

Step 13: Maintain Corporate Compliance

After incorporation, you must maintain ongoing compliance with California law to preserve your corporate status and liability protection.

Annual Requirements

  • Annual report — File a Statement of Information (Form 1505) with the Secretary of State within 90 days of incorporation and annually thereafter. Fee: $25.00. This form updates your registered agent, principal office address, and officer information.
  • Franchise tax — Pay the $800 minimum franchise tax annually to the Franchise Tax Board, even if you have no income.
  • Business licenses — Renew city and county business licenses as required (typically annually).
  • Shareholder meetings — Hold an annual meeting of shareholders to elect directors, unless you have a shareholder agreement waiving this requirement.
  • Board meetings — Hold regular board meetings or take action by written consent to manage corporate affairs.
  • Corporate records — Maintain stock ledgers, minutes, bylaws, and other records in California.

Consequences of Non-Compliance

Failure to maintain compliance can result in:

  • Forfeiture of your right to do business in California
  • Personal liability for corporate debts
  • Loss of liability protection
  • Penalties and fines

Comparison: Corporation vs. LLC in California

While this guide focuses on incorporation, you should understand the key differences between a C-Corporation and a Limited Liability Company (LLC).

Corporations

  • Separate legal entity with perpetual existence
  • Shareholders have limited liability
  • Double taxation (corporate income tax + shareholder dividend tax) for C-Corporations
  • S-Corporation election available to avoid double taxation
  • More formal governance requirements (board meetings, shareholder meetings)
  • Easier to raise capital through stock issuance
  • More complex compliance and record-keeping

LLCs

  • Separate legal entity with flexible duration
  • Members have limited liability
  • Pass-through taxation (no entity-level tax; income passes to members' personal returns)
  • Simpler governance (no required board or shareholder meetings)
  • More flexible profit-sharing arrangements
  • Easier to form and maintain
  • Lower filing fees and annual compliance costs

Which Structure Is Right for You?

For most small businesses, an LLC is simpler and cheaper. However, if you plan to raise venture capital, go public, or need the formal structure of a corporation, incorporation is the better choice.

Key Contacts and Resources

California Secretary of State

California Franchise Tax Board

California Department of Tax and Fee Administration (CDTFA)

California Business Portal (CalGold)

IRS (Federal EIN)

Summary

Incorporating in California involves 13 key steps: choosing a name, appointing directors, preparing and filing Articles of Incorporation, appointing a registered agent, adopting bylaws, issuing stock, obtaining an EIN, registering for state taxes, obtaining business licenses, opening a bank account, holding a first board meeting, and maintaining ongoing compliance.

The total cost to incorporate is approximately $100 (Secretary of State filing fee) plus $10 (name reservation, if desired) plus any costs for legal assistance or registered agent services. Annual compliance costs include the $800 minimum franchise tax and $25 annual report fee.

California law (Cal. Corp. Code § 200 et seq.) governs all aspects of incorporation. The Secretary of State's online filing system makes the process straightforward, and most incorporations are completed within 1-2 business days of filing.

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