California incorporation guide: Statement of information and other requirements
California is the nation's most populous state and home to the core of the American startup and VC ecosystem. While there are good reasons to consider incorporating in other states such as Delaware or Wyoming, many founders decide to register in California.
In this article, we'll walk you through each step of the process of incorporating a business in California.
1. Choose a business structure
First, you'll need to decide which kind of business you want to incorporate — typically an LLC or C Corp.
LLCs are cheaper and easier to set up, and they also aren't responsible for corporate taxes.
While C Corps have to pay corporate taxes, they also have more flexibility in ownership, allowing for stock to be issued to employees, investors, and other stakeholders. If you're planning to get funding for your startup, you should probably go with a C Corp. Try our LLC vs. C Corp quiz if you're having trouble deciding on a business structure.
2. Pick a name
In order to incorporate a C-Corp or LLC in California, you must pick a name that complies with California’s naming laws. The name must be reasonably different or distinguishable from existing LLCs, and include either the words “limited liability company” or the abbreviation “LLC,” among other requirements.
You should also consider whether your chosen name is available as a web domain, so that potential customers can more easily find and learn about your business.
You can use Firstbase’s free business name search tool if you’re unsure whether the name you have in mind is available.
3. Appoint a registered agent
Any business that operates in the US needs a registered agent in each state of operation, and California is no exception.
The registered agent can be a person, such as a member of your LLC, or a business entity. They’ll be responsible for receiving legal documents on behalf of your LLC and for keeping it in compliance.
With Firstbase Agent, we’ll help connect you to registered agents in California and anywhere else you choose to expand your business. Our customized dashboard will help you stay on top of filing deadlines, helping your business grow without the stress that usually comes with it.
4. File articles of incorporation/organization
Whether you intend to form a C-Corp or an LLC, you’ll need to notify the California Secretary of State. The process for both is similar, but not identical.
For LLCs, you’ll need to provide basic information for the articles of organization. This includes its name and address, the LLC’s purpose, the names and addresses of the individual members, and the name and address of your LLC's registered agent. This can be done online, by mail, or in person.
You’ll need to provide all of the same information for the articles of incorporation needed for C-Corps, but you’ll also need to include the number of shares your business is authorized to issue. This can also be done online, by mail or in person.
The typical fees associated with filing the articles of organization/incorporation were waived for submissions submitted before June 30, 2023.
5. File a statement of information with the California Secretary of State
Though not all states do the same, California requires new C-Corps and LLCs to both provide initial reports with the Secretary of State within 90 days of incorporation/formation.
The fee is $25 for C-Corps and $20 for LLCs. This can be done online, where the turnaround takes about one business day, or by mail or in person.
If you incorporate with Firstbase, we’ll file your state initial report at no extra charge. Simply pay the state fee and let us handle the rest. Click here to incorporate your LLC or C-Corp in California now.
6. Create an operating agreement, or corporate bylaws
Though you don’t have to file it with the state, California requires LLC members to create an operating agreement that explains additional provisions related to how your business will operate. This is especially important if you’re incorporating an LLC with other members, as the operating agreement will be the document that codifies your individual rights and responsibilities.
Of course, the operating agreement can be modified as your business grows or changes. Just be sure to have the written consent of all LLC members before making adjustments.
Similarly, California law doesn’t require that C-Corps file corporate bylaws with the state. But much like operating agreements for LLCs, bylaws bring legitimacy to your business and set the ground rules for how it will operate.
Doing business in California is a little bit different than in other places, including the specific deadlines and fees.
With Firstbase Start, we’ll handle everything for you. That includes filing fees and expedited processing, plus essential and important documents and access to our self-serve tool for vital tax forms. And once you’re incorporated, Firstbase Agent will help you stay on top of myriad deadlines, so you can spend more time running your business.