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Business Formation

Business Formation

In California, starting a business requires compliance with a series of strict legal requirements, although the exact steps that a person must take will depend on the type of business being formed. For example, to file a corporation, the founders must submit Articles of Incorporation with the state, while those starting a Limited Liability Company (LLC) only need to file Articles of Organization. To ensure that you comply with the state’s specific formation-related rules and regulations, please contact one of our experienced business formation attorneys to schedule an initial consultation.

Incorporation Requirements

The type of Articles of Incorporation that business owners must file when forming a corporation depends on the specific type of company in question. For example, there are different forms for closely held corporations, nonprofits, and general stock corporations. When completing these documents, filers must include the following information:

  • A corporate name that is not the same as, or too similar to, an already existing company name;
  • The number of shares that the business is authorized to issue;
  • The company’s purpose;
  • The name and street of an agent, who is a resident of California or who has been registered as a corporate agent with the state and is authorized to accept legal papers on the company’s behalf; and
  • The company’s street and mailing address.

Filers must also submit a $100 fee with their application. Once a company’s Articles of Incorporation have been submitted, the owners must:

  • Set up a corporate records book that includes the minutes of all shareholder and director meetings;
  • Prepare corporate bylaws that establish the company’s operating rules;
  • Appoint corporate directors;
  • Hold a Board of Directors meeting where directors can appoint corporate officers, authorize the issuance of stock, and adopt bylaws;
  • Issue stock to each shareholder;
  • Pay state taxes to the California Franchise Tax Board (FTB) during the first quarter of each accounting period;
  • Obtain a federal employer identification number (EIN);
  • Obtain any necessary state and local business licenses; and
  • File a Statement of Information with the Secretary of State within 90 days of filing the Articles of Incorporation and once a year thereafter.

This process can be complicated, so if you are considering forming a corporation, it is critical to speak with an experienced business formation attorney who can advise you.


Limited Liability Companies

Many business owners choose to file as an LLC, which ensures that their personal assets are protected in the event of a lawsuit. The process of establishing an LLC, although similar in some ways to the process of incorporating a business, does require some different steps, including that the filer complete the company’s Articles of Organization, which requires submission of the following information:

  • The company’s name, which must include the words limited liability company, LLC, or another variation of this term;
  • The company’s statement of purpose;
  • The street and mailing address of the company’s office;
  • The name and address of the agent authorized for service of process; and
  • Whether the LLC will be managed by a single manager, multiple managers, or company members.

Finally, the form must be signed by each of the company’s organizers.


Partnerships

The third most popular form of business in California is a partnership, which can be either general, limited, or limited liability. This type of business is created whenever two or more people agree to do business together for profit. Unlike LLCs and corporations, partnerships have no formal filing or registration requirements. However, partnerships must still comply with tax, filing, and registration requirements, such as choosing a business name, drafting and signing a partnership agreement, obtaining an EIN, and obtaining business licenses and permits.


Contact an Experienced Business Formation Attorney

If you are considering starting your own business, please contact one of the experienced business formation attorneys at Valiant Law by calling (909) 677-2270 to discuss your case today.

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