California Corporation Cost
A business or professional corporation is another type of business entity that is favored by entrepreneurs and small business owners. A corporation can be classified as a C corporation or an S Corporation. The former is one of the most common forms of California incorporation. A C Corporation has several advantages. For example, it has a perpetual lifetime, which means the business will continue to exist even if the owners die. If you incorporate in California then one of the major benefits is that the assets of owners (personal assets) are protected from any debt and liability belonging to the corporation. It is also easier to attract capital and investors through the sale of corporation stocks and bonds and it is also easy to transfer ownership. The cost to form a California Corporation is also less as compared to other states like Georgia, Illinois, or New York.
Cost for forming California Corporation
If you are planning to incorporate in California then there may be certain costs attached for the initial registration of your new business. The incorporation costs are normally considered as a one-time cost. The cost to form a California Corporation includes:
- You can form a General Stock Corporation or a Professional Corporation. The cost to form a California Corporation by filing Articles of Incorporation is $100.
- If you are planning to drop off the registration documents at the Sacramento office then there is a non-refundable fee of $15.00
- You have to reserve a business name prior to filing formation documents to incorporate in California. The name reservation fee is $10. In addition to this, there is a special handling fee of $10.
The above are fixed costs and there are one-time variable costs as well. The cost to form a California Corporation also includes completing and filing all required paperwork. This process of creation and filing can vary in expenses from $500-$900 although IncParadise can assist with the filing, which will help save time and money.
Annual maintenance cost for California Corporation
Entrepreneurs incorporate in California to enjoy the several advantages but it is important to note that once you have incorporated your business, you will need to keep it operational and active. In order to ensure your business enjoys good credibility, you will be required to fulfill all annual maintenance requirements and they are an integral part of the cost to form a California Corporation. The annual maintenance expenses include:
- Once you have filed incorporation documents, you have to make the business operational by applying for and obtaining a business license. The cost of a business license is an integral part of the California Corporation maintenance cost and is the same for all forms of businesses as it varies according to the business activity. A business license cost can vary from $50 – $100 although the cost of a license may be higher for regulated industries like the insurance business or any type of financial institution. The cost to form a California Corporation may vary or remain fixed each year as a business license or permit has to be renewed each year. The renewal fee will depend on the business activity including additional activity and the location.
- You will be required to file a Statement of Information within a period of 90 days after filing the Articles of Incorporation. The statement will be required to be filed every two years thereafter. The California Corporation maintenance cost for Statement of Information is $25. If there has been no change then a Statement of No Change has to be filed the next year along with a fee of $25. There is a 6 month filing window for California corporations.
- As a part of the annual California Corporation maintenance cost, you may be required to pay a minimum tax of $800 to the California Franchise Tax Board pursuant to CA Rev & Tax Code § 23151 (2019). This is payable each year.
- When you form a California LLC, you will be required to maintain a registered agent in the state. We are one of the top and reputable registered agents in the state and we can help to Incorporate in California.
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