How to Start a Corporation in California

How to Start a Corporation in California

You’ve decided to start a new business in the state of California. You’ve done the research on various business structures and corporation seems to be a good fit.

While you should absolutely reach out to an experienced corporate attorney such as myself at sam@mollaeilaw.com to ensure corporation is the right choice, the next step is simple.

How Do You Form a Corporation in California?

If you follow my ten-step process, it isn’t too hard!

 

1. Select Your Corporate Name

The name of your corporation needs to be unique to other businesses already established in the state of California.

California Secretary of State and U.S. Patent & Trademark Office are great resources for checking the availability on potential business names.

It is also important that your business name isn’t misleading. It needs to make sense for what the business actually is.

You can also do a free preliminary check by mailing a Name Availability Inquiry Letter to the California Secretary of State’s office. Keep in mind,

Types of Companies

Types of Companies

There is a wealth of decisions that go into forming a business in the United States. Arguably one of the most crucial in relation to taxation is the legal structure of your new business.

In addition to taxes, this decision plays a role in how much paperwork you end up dealing with and your ow n personal liability in the company. It even factors into how you can raise money on your company’s behalf.

The most well-known legal structures for a business include sole proprietorship, partnership, corporation, S corporation, and LLC. Limited liability partnership (LLP) is a newer development in the business world.

Fortunately, you do have the option of kicking off your business as a sole proprietorship and reorganizing your structure if you decide to take on partners. So, it isn’t set in stone.

Just make sure you notify the IRS if you make changes in the structure of your business.

Whether this is your first business venture, or you have rode this rodeo before, I highly recommend reaching out to an experienced business lawyer such as myself at sam@mollaeilaw.com.

Is an LLC a Corporation (What’s the difference?)

Is an LLC a Corporation?

As a new business owner, chances are pretty good everyone and their brother has lined up to give you a piece of advice.

Don’t form an LLC, you want to form a corporation instead. Corporations are to complex, go with an LLC instead.

Sound familiar?

While all this advice can be helpful, it can also be confusing. One of the biggest questions new business owners and aspiring business owners email me at sam@mollaeilaw.com and ask is: is an LLC a corporation?

The answer is no. An LLC and a corporation are two different types of business entities.

It is up to you to look at the pros and cons of an LLC vs a corporation and decide which one is right for your business venture.

 

LLC vs. Corporation: What’s the Difference?

Apart from a sole proprietor, all other business organizations must register as a specific type of business such as a corporation, LLC, or partnership in the state the business is located in. As a new business owner trying to decide which one is right for you can be hard!

Which Legal Structure Is Right for Your Startup?

The first and most important step is to determine which legal structure is suitable for your business needs. A startup’s business plan may change over time, and an owner should be prepared for all possible risks and liabilities the business may incur going forward.