Your New Business
If you are starting a business, you will undoubtedly want to consider exactly what form of business it should be for tax and liability purposes. Many business founders choose to incorporate because of the benefits associated with being an owner in a corporation, especially concerning limited financial liability.
Several types of corporations exist, including C Corporations, S Corporations, and Limited Liability Companies. All corporations are legally separate entities from their owners for financial purposes. Limited Liability Companies are a relatively new hybrid of corporations and partnerships. While they are a separate entity, they allow members to have tax benefits associated with partnerships and are free from many of the formalities that other types of corporations are subject to.
California Regulations and Procedures
If you would like to incorporate in California, you will need to learn about the legal procedures particular to California, much like you would in any other state. Federal guidelines for taxation purposes govern all corporations in the country, but each state has its own laws regarding incorporation processes and procedures.
To incorporate in California, you will need help and advice from a lawyer who deals with new business charters. You will meet with this legal advisor to discuss your personal ideas and plans, and he or she will explain the different types of businesses you could form and help you decide what will work best. If you choose to create a Limited Liability Company, your California incorporation lawyer will draft all of the necessary documents for beginning your business. These documents describe the business’s purpose, methods of operation, rules for financial ownership, and procedures for corporate governance according to California law.
When you incorporate in California, you will need to establish a physical presence for your business in the state. This is to ensure legal protection in the event of civil lawsuits naming your corporation as counter-party. Your form of incorporation will be noted in the incorporation filing that you submit to the California Secretary of State’s Office. A certified copy of your articles of incorporation will be included in your permanent file. The incorporation lawyer you work with will be acting on your behalf as agent for service of process, so all court or arbitration demand documents will be handled through him or her. This allows you and other owners to remain largely private in most legal matters.
Your agent will send you a California incorporation kit to begin your process of incorporation. The kit will include instructions according to which form of corporation you choose and how you should proceed. You will need to choose whether your agent will do a name search and name reservation and record current and future intellectual property rights and copyright. Directions will be included about where you will be asked to send fees for the services you need and fees payable to the agent for work on your behalf. The kit will also include stock certificates, your article of incorporation, your corporate seal, and your corporate bylaws.
Getting started on you path to incorporate in California is as simple as finding a business lawyer who will advise you and act as your agent, making decisions about your goals and what will work best for you, and completing the instructions provided to you in your California incorporation kit.
By Kristin Cleveland