Register company in California
- Willing to open a business in California? You will be required to register company in California to operate your business legally. Engaging with Tetra Consultants can help you identify all your business needs and enable you to register company in California without much hassle. Our services will give you extra time to be dedicated to other important aspects of your business.
- We value our clients’ time and money hence; we make sure to deliver our services within the prescribed period. Our experts ensure that we provide quality and timely services to our clients to assure client satisfaction by providing them with fully operational and functional registered businesses in California.
- Our extensive service packages include:
- Register company in California
- Local registered agent and registered address
- License applications (if required)
- Annual accounting and tax services
What are the benefits of registering a company in California?
- You can experience a moderate rate of tax being charged. Moreover, California offers several tax credits to corporations to help them to grow.
- The attractive tax regime helps in getting the attention of various entrepreneurs and investors.
- There are various tax credits provided in California which include capital gain exemption which is applicable for shares of small business corporations only. Moreover, after you register company in California, you will get access to corporate small business tax rates which provide exempted tax rates for small businesses.
- Registering in California increases the credibility of the business. The certificate of registration helps businesses certify their credibility and also helps in proving the business’s legal identity to others.
- Many big companies before starting the engagement with other businesses make sure that those businesses are registered as, the registered businesses have a sense of security associated with them assuring the big companies of the business credibility.
Protection from lawsuits
- When businesses get registered in California it builds a corporate shield that separates the personal assets from the business assets eventually protecting the personal assets from business-related lawsuits.
- Thus, incorporation protects the personal assets of the owner from lawsuits related to the business. This provides limited liability protection to the business owners eliminating the risk of personal property.
Thriving business community
- One of the major benefits California has is its popularity because of which California is enriched with a thriving business community and many opportunities. The large customer base and the popularity of California are a step ahead of the global platform.
- The thriving business community environment creates many opportunities for entrepreneurs. Innovations and innovative ideas can be sustained in such a competitive market easily making it a hub for innovative ideas and businesses.
- If you are willing to register company in California you must be aware of the benefits that come along with it. California laws require three officer positions in the filing which makes the management team strong and flexible. The officer position includes president, chief financial officer, and secretary.
- The law provides that these seats are to be filled before registering the company, these fields can be filed by a single person too. This allows flexibility when it comes to registering your company while filing out your business leadership team in the future.
Can a foreigner register company in California?
- Yes, there are no restrictions on foreigners willing to register company in California and it is possible for non-US residents to run a business in California. However, the foreigners will be subjected to some of the additional requirements which are mandatory to be complied with. To register company in California the foreign entity will be required to file a statement and designation by the foreign corporation with the California Secretary of State.
- Additionally, foreign entities will also be subjected to file fees for foreign corporations which may vary from a few hundred dollars. Further, the application for registration will also require information about the company, country of incorporation, and address of the principal executive officer who can be a non-US resident. Moreover, foreign entities will be subjected to submit a valid certificate of good standing by an authorized public official of the foreign jurisdiction under which the business was incorporated.
- It is essential to note that the requirements of a foreign entity may vary depending on the nature of the business and the business entity chosen to be incorporated. Thus, if you require a specific requirement for a foreign entity willing to register company in California or want to know more about California foreign LLC registration, Tetra Consultants can guide you through the process and can make the journey of registration simple, easy, and quick.
How much time does it take to register company in California and open a corporate bank account?
- To register company in California might get complex and difficult for you. Tetra Consultants with their team of experts can help you with registration of either your corporation or LLC registration in California with much ease and in the designated timeframe.
- It might take up about 2 weeks for any company willing to register in California if you engage with Tetra Consultants. After starting engagement with Tetra Consultants, our experts will receive the due diligence from the directors and shareholders of the company. Our experts will then search for the best and preferred name reservation for the company to use.
- Throughout the process of registration, our experts will handle all the paperwork and legwork for you. We ensure that you can register your company without leaving your desk.
- After completing the registration process Tetra Consultants can help in opening a corporate bank account in California for managing all your business transactions. We ensure that you can open a bank account from your comfort as we will be presented in the bank on your behalf.
- Tetra Consultants can open a corporate bank account within 4 weeks of incorporation. Once the bank account and the business get fully operational, we will post you all the necessary documents of your business and bank account for future reference.
- Hence, you can expect your company to be fully functional and operational within 6 weeks of engagement with Tetra Consultants.
Types of business entities to consider when you register company in California?
- Registering a company might be a confusing and time-consuming process that involves selecting the correct and appropriate business structure for your business which will be beneficial for the owner of the business.
- If you are planning to register company in California, you can choose from the business structures mentioned below:
- A business fully owned and managed by a single individual will be a sole proprietorship. A sole proprietorship business structure is one of the easiest structures to set up. However, the proprietor of the business is liable for all the debts and liabilities of the business as the business does not have any separate legal identity.
- It is the most basic type of business structure to establish which can be shifted to another business structure for business owner convenience. Additionally, sole proprietorship is only available to individual business owners and does not require the filing of any formal business information.
- A partnership is a business structured form when two or more people co-own a business and share the profits and losses of that business. In California, if you are looking to register a partnership you need to decide which type of partnership is favourable for your business as there are three kinds of partnerships present in California which are as follows:
- General partnership: A partnership formed between two or more persons jointly agreeing to carry on a partnership. In this partnership, formation is not dependent on any formalities and each partner has an equal right to participate in the management and control of the business. Additionally, these partnerships make each partner jointly and severally liable for the business obligations, implying any partner can be held responsible for the wrongdoings of another partner. Moreover, registration is not mandatorily required but a statement of partnership authority is to be filed with the state to register.
- Limited partnership: This is a business entity that comprises general partners and other partners who manage the business and those partners that contribute to the capital of the business. This partnership structure helps in attracting investors as well as tax rebates from the government. Further, there are fewer formalities involved which makes it difficult to pierce the limited partnership veil and go after limited partners’ personal assets.
- Limited liability partnership: It is a comparatively new form of business entity that provides liability protection as well as passes through tax statutes without the complications of the corporation. It is a mixture of corporation and partnership which provides the owner with the best of both worlds. Moreover, registering an LLP would provide liability protection, tax benefits, and simplified governance because of the lack of complexities.
- The corporation is one of the most common business structures in California. The structure provides protection of shareholders from personal liability. It is a legal entity that has a separate legal entity from that of its owner. Corporations can sell or buy back their stocks and bonds to invest in their capital.
- Accordingly, minimum regulatory requirements for a California corporation can be summarized as below:
- A minimum of three directors, unless there are less than three shareholders.
- No residency requirement for directors as well as for shareholders of the corporation.
- The Articles of Incorporation or the corporation’s bylaws must state the number of directors that will constitute the corporation’s board of directors; and
- No minimum or maximum capital requirement mentioned by the California Corporations Code
- Generally, corporations can be divided into three kinds which are C corporation, S corporation, and California statutory close corporation.
- C corporations: It is probably the most well-known corporation which is an old, well-established, and common form of legal business entity controlled by state law. A corporation is generally managed by a board of directors also, the board of directors also appoints the corporation’s officers. The day-to-day operations of C corporations are handled by the corporation’s officers. Thus, minimum statutory requirements are as follows:
- Must have at least three directors, unless there are less than three shareholders, in which case the number of directors may be equal to or greater than the number of shareholders;
- Must have a chairman of the board of directors or a president or both;
- Board to determine the secretary, a chief financial officer, and such other officers with such titles and duties;
- The default tax designation for professional corporations in California
- Must file an Annual Statement of Information every year.
- S corporations: It is a corporation that elects to be treated as a pass-through entity for purposes of federal taxes. These corporations are exempted from paying federal income tax. Moreover, these corporations attract investors through selling shares of stock however, the S corporation cannot go public and thus have a limited ability to sell their shares. Thus, minimum statutory requirements are as follows:
- Must have at least three directors, unless there are less than three shareholders, in which case the number of directors may be equal to or greater than the number of shareholders;
- Must have a chairman of the board of directors or a president or both;
- Must file California S Corporation Franchise or Income Tax Return (Form 100S); and,
- Must pay the $800 minimum franchise tax annually or 1.5% of the corporation’s net income, whichever is greater.
- California Statutory Close Corporation (CSCC): The California Corporation Code allows the creation of CSCC. only some of the qualifying businesses can form a CSCC. Moreover, the shareholders of such corporations are given direct control over the corporation. Additionally, there are fewer requirements to create such an organization which makes it harder for the creditors to go after the personal assets of the shareholders. The requirements of such corporations are like S corporations and C corporations in terms of shareholders and directors; thus, other specific requirements of such corporations include:
- Cannot trade publicly;
- Has no minimum requirement for shareholders; and
- Granting to shareholders preemptive rights to subscribe to any or all issues of shares or securities.
Limited Liability Company (LLC)
- An LLC registration in California is a process that generally does not involve complexities like corporations and provides protection from the liabilities of a business. California LLC registration provides you with the liability protection of a corporation and no payment of federal income taxes like a sole proprietorship, S corporation, etc.
- Accordingly, a minimum regulatory requirement for a California LLC can be summarized below:
- At least one shareholder of any nationality;
- At least one director of any nationality (can be same as shareholder);
- No minimum capital requirement;
- A registered agent with a physical address in California;
- Filing of Articles of Incorporation, and statement of information with the state secretary.
- Annual tax of US$800 if they do business in California or if the Secretary of State has jurisdiction over them.
- California foreign LLC registration will provide the business with liability protection, taxation benefits, fewer and more lenient formalities, and enhanced credibility of business.
How to register company in California?
- To register company in California, a business might need to follow various steps and procedures which might get confusing. Tetra Consultants can help you to register company in California on your behalf while taking care of all the compliances required by your businesses. A generalized procedure for registering a company is as follows:
Step 1: Selecting business structure and business name
- If an individual is willing to run a business in California, he or she must decide the business structure through which they want to continue their business. Along with this, the business owner needs to select a business name which is the identity for the business and under that name, the business will be incorporated.
- Choosing a business name and structure is a crucial decision for any business as it has a long-lasting impact on the business thus, while choosing the name and structure for a business all the considerations must be taken into point.
- Tetra Consultants can help you preserve your name and register your business with the preferred name and business structure. Our expert team can file for your business name and check about its availability for your convenience.
Step 2: Choose a registered agent
- If a foreign entity is willing to register company in California and chooses a business structure to be LLC, LP, LLP, or corporation, the business will need to appoint a registered agent for the service of process.
- A registered agent is an entity or an individual that receives legal and tax correspondence on behalf of the company and in return will be paid by few hundred dollars as consideration against the service. Moreover, a registered agent must be a California resident having a permanent address and not a PO box. The agent is also required to be qualified by the California Secretary of State.
- Tetra Consultants can help you in appointment of registered agent and registered office address for the communication purposes through our wide range of business ancillary services.
Step 3: Obtain a Federal Employer Identification Number (EIN)
- If you wish to run a business in California, no matter which business structure you choose you will be required to obtain a federal employer identification number for your business entity.
- EIN is a unique nine-digit number assigned by the Internal Revenue Service (IRS), to identify and track business entities in the states that are subjected to taxation. To apply for EIN, you can apply with the IRS Form SS-4 or with the help of Tetra Consultants you enjoy the convenience of obtaining licenses without traveling to California.
- It will be easy for you to file for EIN when you engage with Tetra Consultants. Throughout offshore financial license services, we can provide you assistance with obtaining EIN and other business licenses without any hassle.
Step 4: Register your business
- The registration of a company is required to be done with the California Secretary of State. The requirements to register company in California can differ depending on the business structure chosen.
- For LLC registration in California filing of Form LLC-1 is required with the California Secretary of State LLC Division. Registration of a corporation requires the filing of Form ARTS-GS with the California Secretary of State Corporation Division.
- As an individual registering a business might seem a hectic task for you. With Tetra Consultants at your wheel, you can get assistance, guidance, and help from us to make the process of registering seamless and smooth for our clients.
Step 5: Set up an accounting system
- After fulfilling the above steps, an individual will be required to set up an accounting and record-keeping system while acquainting the business with taxes applicable. The accounting system and tax regime would depend on various factors like business structure, number of employees, business industry, revenue generation, and many more.
- It requires businesses to comply with federal agencies and programs such as the California Franchise Tax Board (FTB), State Board of Equalization (BOE) to obtain a seller’s permit, State of California Employment Development Department (EDD), and Internal Revenue Services (IRS).
- Usually, businesses are subjected to keep the documents for three years. The documents include the list of owners and addresses, copies of all formation documents, annual reports, financial statements, amendments, or changes to the company.
- Accounting compliances may cause confusion for many new businesses. The Tetra Consultants is a one-stop solution for your business problems. We can provide you with assistance with our tax and accounting services. We have a team of experts who will ensure that all the tax and accounting compliances are being fulfilled within the time frame.
Step 6: Registration with EDD
- You will be required to register business with EDD with the following information:
- Business structure
- Legal name
- Doing business as (DBA)
- Sos Account number
- Once successfully registered as an employer, you will be assigned an account from EDD which will be unique to the business and can be used to pay state payroll tax in the future.
- The registration process with EDD might feel confusing and difficult for foreign entities willing to register. Thus, Tetra Consultants experts are there to help you out with all the confusion. We can aid with registering the business with EDD without any hussle.
Step 7: Corporate bank account opening
- Every business is required to keep its personal and business finances separate thus, a corporate bank account must be maintained for managing and distribution of business finances. It also helps in ensuring the proper utilization of business finances.
- The documents for corporate bank account opening might require filed paperwork, EIN, and company resolution signed by owners, members, directors, officers, etc. that authorizes the opening of the company to open a bank account.
- Tetra Consultants can open a bank account for your business on your behalf within 4 weeks. Our team aims to provide the best services without discomforting our clients. Hence, we try to ensure that bank account is opened and fully functional without our clients leaving their desk.
What are the minimum regulatory requirements to register company in California?
Appointment of local director
- No requirement for a local director
- A minimum of three directors, unless there are fewer than three shareholders, which implies that the number of directors may be less than three but not less than the number of shareholders.
- No residency requirement for directors
- No minimum age requirements for directors
Requirements for shareholder
- A minimum of one shareholder is required
- No residency requirement for shareholders
- Shareholders owning individually or in the aggregate at least 5 percent of corporate shares have certain rights under California law.
- No minimum capital requirement to register company in California
- Appointment of a registered agent having a permanent address in California for communication purposes.
- Requirement of shareholders’ agreement to operate a close corporation.
- Corporations are required to draft bylaws for their organization working.
- Corporations are required to keep bylaws and minutes of directors and shareholders meetings at the Principal Executive Office (PEO).
Requirements for LLC registration in California
- Filing of Initial statement of information within 90 days with the California Secretary of State.
- An operating agreement
- A minimum of one member
- Obtaining EIN even if the company does not have employees
Documents required to register company in California?
- The documents downlisted are the generalized documents that might be required to register company in California. There may require additional documents depending on the business structure and business activity. Thus, if you require specific documents requirement Tetra Consultants team of experts can assist you with that requirement.
- The generalized document requirements are as follows:
- Articles of incorporation or organization
- Document mentioning statement of information of business
- Certificate of good standing from the parent jurisdiction authority
- Operating agreements for LLCs
- Minutes of the first meeting of the Board of Directors for corporations
What are the accounting and tax obligations in Califonia?
- Accounting and tax obligations of the company while registering the company is an important aspect of the business. By outsourcing your accounting and taxation obligations through Tetra Consultants you can experience a seamless process of complying with all the accounting and taxation requirements. Our experts will study all your business documents and will provide you with guidance regarding all the accounting and taxation obligations along with the filing requirements.
- Additionally, outsourcing your accounting and taxation requirements can reduce the overhead cost while ensuring timely reporting and filing. After you start the engagement with us, we will prepare all required filings in advance to ensure that the stipulated deadlines are met.
Annual report and franchise tax
- Corporations in California are required to file a statement of information annually during the first six-month period ending on the last day of the anniversary month of the incorporation.
- California has a minimum franchise tax of USD 800, which is due on the 15th day of the third month after the close of the year, however, corporations are exempted from this tax for the first year.
Federal tax identification number
- To register company in California, all the business entities are required to obtain an Employee Identification Number (EIN). This EIN acts as a tax identification number.
- Additionally, EIN is an important license required in order to open a bank account.
- Companies in California are subjected to maintain accounts and pay tax accordingly. As many business entities are exempted from paying tax still they will be subjected to keeping bookkeeping records and filing tax returns.
Annual tax and annual LLC fee
- LLC registration in California is subjected to annual tax and an annual LLC fee to the California Franchise Tax Board. LLCs are subjected to this tax even if LLC do not conduct any business. The California corporate tax or franchise tax amounts to 1.5% of the net income of the business.
- Those LLCs who earn more than US$250,000 in California are subjected to filing LLC fees each year. The fee structure increases depending on the amount of income earned by the LLC in the financial year.
Why register in California?
- California is a diverse political landscape with many registered democrats and republicans. However, California is known for its liberal state that leans towards the democratic party creating a good environment for companies to run their business.
- The government has been encouraging various businesses and has been taking steps to make California as business friendly as it can. This might be the factor because of why young entrepreneurs and businesses are moving towards California to register their companies.
- California’s dominant business sector includes finances and insurance, trade, transportation, utilities, and professional and business services. This is an important aspect of California’s economy because of which many businesses want to be part of such a diverse and thriving economy.
- California has a history of pivoting and overcoming economic downturns, providing opportunities to businesses in the economy. This encourages many entrepreneurs and provides them the opportunity to try their luck in such a dynamic and innovative business environment.
- California is a liberal, tolerant, vibrant, and multicultural state making it a major factor for companies looking to expand and be a part of a diverse and inclusive business environment.
- Moreover, the state has focused on diversity, equality, and inclusion providing businesses with a dynamic and diversified environment that values and prioritizes diversity and inclusion.
- California has a tech workforce of 1.88 million adding more jobs than any other state since 2010. California has been becoming home to many tech startups and custom software services for tech manufacturing more than anywhere else in the nation.
- Additionally, California has many top-ranked universities providing courses such as computer programming making it the nation’s largest and most diversified network of public universities. With continued investments in integrated K-16 education and expanded broadband, California will stay at the forefront of technological innovation.
- California has been popular for its culture of innovation and entrepreneurship mainly in the technological area. These new upcoming technologies are a cornerstone of California’s global competitiveness.
- Apparently, California has run one of the biggest carbon markets which requires companies to buy, trade, or receive pollution allowances equivalent to how much companies have planned to emit. The state makes fewer allowances available over time, with the goal of spurring the companies to pollute less as allowances become scarcer and more expensive.
- Many companies in California focus on environmental issues as part of their social impact initiatives. Taking action to mitigate a company’s environmental impact can help benefit society and ensure sustainable economic success.
- The legislative framework of California has been amending itself to become much more business-friendly so that businesses can easily operate and expand their business in the state.
- Moreover, California has a history of environmental regulations which is backed by many businesses as it promoted the state’s wide-ranging initiatives to reduce greenhouse gas emissions.
Looking to register company in California?
- Contact us to find out more about how to register a company in California. Our team of experts will revert within the next 24 hours.
What are the rules for naming a corporation in California?
- The name of the business cannot be deceptive or like the other existing corporations in California. In addition, you cannot use any of the following features to differentiate your corporation’s name from that of another business: Suffixes, such as Corporation, Company, Incorporated, Incorporation, Limited, Corp., Co., Inc., etc.
How can I register company in California from India?
- Planning to register company in California can be time-consuming and a complex process. Tetra Consultants can help you with registering your company along with various comprehensive services which will save you time and energy.
Can a non-resident form an LLC in California?
- A foreigner can register LLC in California by filing an application with the secretary of state’s office along with a current certificate of good standing and paying all associated fees.