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California
Corporate Name Endings
- The name must
not be likely to mislead the public, be the same as, or resemble so
closely as to lead to deception, the name of a domestic or qualified
foreign corporation, a name under reservation, or the registered or
assumed name of a foreign corporation. The name would need Superintendent
of Bank's approval if it contained the words "Bank," "Trust," or "Trustee."
Corporate Requirements
- Director Information
- Minimum Number - Not less than three, unless there are only one or two shareholders
of record; then the number of directors may be less than three but
not less than the number of shareholders.
- Residence Requirements - No provision.
- Age Requirements - None.
- Directors are not required to be listed in the articles of incorporation.
- Officer Information
- Officers are not required to be listed in the articles of incorporation.
- Stock Information
- An increase in shares or par value does not effect initial filing fees.
- Corporate Records
- An original
or a copy of bylaws must be kept at the principal executive office
or principal business office in the State of California. The minutes
of directors' and shareholders' meetings must be kept at the principal
office.
Taxes and Fees
- Annual Statements
- Domestic corporations
must file with the Secretary of State within 90 days after filing
the articles or incorporation. A statement of domestic stock corporation
must be filed annually by the end of the calendar month during which
the original articles of incorporation were filed. The cost is $25.
- Foreign corporations
must file an annual statement by foreign corporation. The cost is
$25.
- Income Tax Rate
- California imposes a franchise tax on both California corporations (domestic)
and non-California corporations (foreign) for the privilege of doing
business in the state. The franchise tax is actually a tax of net
income; the rate is 8.84% of net income for corporations. S corporations
still must pay the franchise tax; the rate is 1.5% of net income.
- California imposes a minimum franchise tax of $800. So, even if your corporation
does not have net income, it still must pay this minimum tax. The
minimum tax does not have to be paid during the corporation's first
year; however, taxes based on income must be paid during this first
year.
- S Corporation
- S Corporation status is recognized by the State of California, however, the corporation
is still required to pay franchise tax at a rate of 1.5% of net
income. A separate state election is required.
Click here
to print the state S corporation election.
- License Requirements
- California may require that you obtain a business license and pay a licensing
fee based on your business type or profession. Please check with
the state to make sure your business is complying with the license
requirements for your particular profession.
For more information on taxes, visit
http://www.ftb.ca.gov.
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