California is by population, the largest state of America. Registering a company in California will bring in great economic advantages. However, registering company in California can bring in stringent tax obligations for the business that has been registered.
Table of Contents
- Setting up a Business in California
- Select the type of business entity
- Choose a name for the business
- Registration of Company
- Employer Identification Number (EIN)
- Open Company Bank accounts
- Obtain permit or License to run the business
- Business Startup for Non-Resident
- Fee for Company Registration in California
Setting up a Business in California
Setting up a business in California means getting registered with the California Secretary of State. This could be done both online and by physical documentation.
Select the type of business entity
Before going to register a business, one needs on to choose and decide on the type of structure its business will have. One could go and form either a DBA (Doing Business as), Corporation or a Limited Liability Company (LLC).
A DBA is synonymous with a sole proprietorship with no protection against liabilities except that the business has a name separate from its owner.
An LLC gives benefits of limited liability to its owner. , Also it is less formalized than a corporation.
A corporation is characterized by a formalized structure and is properly governed. It too provides the benefit of limited liability to its owners.
Choose a name for the business
Naming the business is the first step when one chooses to get it the registered. The name is something that is to be carefully selected so that it gives uniqueness of the business and act as a parameter of marketing the business. Besides being unique the name selected should be in agreement with the particular trademarks in the United State so as to prevent future confusions. US Patent and Trademark Office can assist in this regard. , Lastly, the name is to be searched in California’s Department of State: Division of Corporations business name database for its availability.
Registration of Company
Registering one’s company in California requires pursuing steps:
- the Hiring of a professional registered agent (a person or an entity authorized to receive company documents)
- Submit articles of organization in case of the LLC and Articles of incorporation in case of a corporation with the respective divisions of California Secretary of State.
- Once the filing is done, one has to properly organize his business by holding an organizational meeting which involves the adoption of the company operating agreement in case of LLC and a shareholder agreement in case of a corporation.
- corporations will give each of its shareholder’s shareholder certificates and the member of the LLC is to be allotted the membership certificate.
Employer Identification Number (EIN)
This is a unique nine-digit number assigned by the Internal Revenue Service. This acts as an identity for businesses that operate in the United States.
Open Company Bank accounts
Open a company bank account for fund management and to keep the personal and business funds separate.
Obtain permit or License to run the business
The registration process is followed by obtaining licenses from the Californian State so that the operations of the business could be smoothly carried out. Each state has particular requirements with respect to permits and business regulations.
Business Startup for Non-Resident
Setting up business and getting it registered is allowed for any person no matter where he lives. But for a person to come to the United States and manage the business by living there instead of remotely managing the business he has to be US resident or either he must have a work visa. Running of a business by a non-resident without work visa can lead to legal action.
Fee for Company Registration in California
Every state charges a different fee for registering a business in the United States. , Also, the fee differs depending on the type of business structure. The fee will be different in case of an LLC whereas the different amount of fee would be charges if the business is a corporation.In California Articles of Incorporation will require a fee of $100 and for LLC a fee of $70 is charged for Articles of Organization. , Also, different amounts are charged at various levels of registration.