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How to Incorporate in California

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Learn how to form a CA corporation yourself

Read our DIY guide to California incorporation, with information on Registered Agents, naming rules, business licenses and more.

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Why Incorporate in California?

The California Governor's Office of Business and Economic Development offers several business incentives in the form of bonds, loans, tax credits and exemptions. Your corporation may be able to take advantage of these incentives, provided it meets the qualifying criteria.

For example, the California Competes Tax Credit is an income tax credit available to businesses that want to locate in California or stay and grow in California. Businesses of any industry, size or location compete for over $180 million available in tax credits by applying in one of the three application periods each year. Applicants will be analyzed based on different factors of evaluation, including the number of full-time jobs being created, amount being invested and strategic importance to the state or region.

For most entrepreneurs looking to start a larger business, creating a California corporation may be the best choice. As a corporation, your business is able to buy and trade stock, and when it comes to excess profits, corporations offer more flexibility than an LLC. A corporation is allowed to pass income and losses to its shareholders, who report taxes on an individual tax return at ordinary levels.

Is an LLC Better Than a Corporation?

It all depends on your goals. For smaller businesses, limited liability companies are usually a better option. An LLC is easier to set up, and you receive many of the same benefits as a corporation, but with less regulation.

Learn more about forming a California LLC so you can decide which business entity is right for you.

Benefits of Starting a California C Corp

It offers you numerous advantages, including but not limited to:

  • The ability to sell stock to investors inside and outside the U.S.

  • Several options to create, buy, sell or transfer stock, including publicly

  • The ability to issue more than one type of stock

  • The ability to raise more funds by issuing more stock

  • The strongest form of liability protection possible by insulating your personal assets and finances from business debts, obligations, damages, bankruptcy or other liabilities

Benefits of Starting a California S Corp

It offers several advantages similar to those provided by a C Corp, including but not limited to:

  • The capacity for up to 100 shareholders

  • Simpler rules than those applicable to C Corporations

  • Easy transfer of ownership simply by selling your stock

  • The possibility of saving money by allowing you to pay less self-employment tax

  • Options for creating, transferring and selling stock, though not as many as a C Corp (for example, an S Corp is only permitted to sell one class of stock)

In this guide, you’ll find information on naming your corporation, getting a Registered Agent, the fees you’ll need to pay, business taxes and much more. We also cover what you'll need to register your corporation and how you'll interact with the CA Secretary of State (SOS).

Start a Business in California Checklist

To help you along the way, use our Starting a Business checklist to keep track of everything you need to do to get your business up and running.

How to Form a California Corporation Yourself in Six Steps

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