How to Start a Corporation in California (2026): Steps, Costs & Filing Guide
How to Start a Corporation in California (2026): Steps, Costs & Filing Guide
To start a corporation in California, you file Articles of Incorporation with the Secretary of State, complete a short set of internal steps, and file a Statement of Information every year. The state filing costs $100. The larger recurring cost is the $800 minimum franchise tax, which applies to most corporations after their first taxable year. This guide covers the filing, the steps after it, the Statement of Information, how the corporate tax works, how C and S status compare, and what else you need to register.
Disclaimer: This guide is informational content, not legal or tax advice. Entity choice, securities compliance, and tax elections depend on your facts. Talk to a qualified California business attorney and a CPA before you form the company or make an election.
Step 1: File the Articles of Incorporation
A general stock corporation forms by filing Articles of Incorporation (Form ARTS-GS) with the California Secretary of State, Business Programs Division. The filing fee is $100. Close corporations (Form ARTS-CL) and professional corporations (Form ARTS-PC) also pay $100.
You can file in three ways:
- Online through bizfile Online. Online filings take 5 days or less.
- PDF submission, which takes 10 days or more.
- Mail or in person, which are still available.
If you need speed, the Secretary of State offers a 24-hour option for $350, a same-day option for $750, and drop-off special handling for $15.
Reserve the name if you need time
A name reservation costs $10 and holds the name for 60 days. The reservation is not renewable for consecutive periods. Check availability and reserve the name on the Secretary of State name availability page.
Name rules
- The name must be distinguishable from other corporation names in Secretary of State records. That check covers corporation names only. It does not cover trademarks or fictitious business names, so run your own trademark search.
- A corporation name does not need “Inc.” or “Corp.” Only a close corporation’s name must include “corporation,” “incorporated,” or “limited,” or an abbreviation of one of those.
- Names that include “bank” or “trust” require approval. Words that imply insurance can mislead, so avoid them unless you are an insurer.
- “Professional Corporation” or “PC” may be used only by a professional corporation.
What the articles contain
The articles state the corporate name, the purpose, the agent for service of process and the agent’s street address, and the shares the corporation is authorized to issue. The agent must be either a California resident individual or a corporation that holds a Corporations Code 1505 certificate. If the agent is a corporation, no address is entered.
Step 2: Complete the Steps After Filing
The state does not review your bylaws or internal records. These steps happen inside the company, and you need them to run it properly:
- Adopt bylaws. Bylaws are not filed with the state. Keep them with your corporate records.
- Elect directors. Corporations Code 212 calls for at least three directors. If the company has fewer shareholders, the bylaws may set a smaller number.
- Appoint officers. Corporations Code 312 requires a chairperson or president, a secretary, and a chief financial officer. Any number of offices may be held by the same person unless the articles or bylaws say otherwise, so one person can hold all of them.
- Hold an organizational meeting. The board approves the bank account, authorizes the stock issuance, and records these actions in minutes.
- Issue stock. Share issuance is subject to securities rules. Ask an attorney or check with the Department of Financial Protection and Innovation before you issue shares, especially to people outside the founding group.
- Get an EIN. The IRS issues Employer Identification Numbers free of charge through its online application.
The Statement of Information (Form SI-550)
A California stock corporation files a Statement of Information on Form SI-550. The fee is $25. The first one is due within 90 days of filing the articles. After that, it is due every year under Corporations Code 1502. You file it through bizfile Online.
The form lists your directors, chief executive officer, secretary, chief financial officer, principal executive office, and agent for service of process. Keep these details accurate, because the agent named here is the person or company that receives legal papers for the corporation.
If you miss the deadline, the Secretary of State sends a notice, and the Franchise Tax Board can then assess a $250 penalty. A waiver request process exists, so confirm the current procedure with the Franchise Tax Board.
How the California Corporate Tax Works
Every corporation incorporated, registered, or doing business in California owes the $800 minimum franchise tax. There is one exception for the first year. A newly incorporated or qualified corporation, including an S corporation, owes no $800 minimum in its first taxable year.
The waiver covers only the minimum. First-year net income is still taxed. If the corporation earns income in that year, the income tax rate applies to it.
From the second year on, the $800 minimum is due each year on the 15th day of the 4th month of the tax year.
C Corporation vs. S Corporation in California
A corporation is a C corporation by default. It becomes an S corporation only after it files a federal election, and California then taxes it differently. The main differences are below.
| Item | C corporation | S corporation |
|---|---|---|
| California tax on net income | 8.84% (10.84% for banks) | 1.5% (3.5% for S banks) |
| Minimum annual tax | $800 (waived in first taxable year) | $800 (waived in first taxable year) |
| Annual return | Form 100 | Form 100S |
| Return due date | 15th day of the 4th month after year end | 15th day of the 3rd month after year end |
| Automatic extension | 7 months | 6 months |
| How to elect | Default status | IRS Form 2553 |
California follows the federal S election. You make it with IRS Form 2553, filed no more than 2 months and 15 days after the tax year begins. The Franchise Tax Board states that IRS approval is required and that California has no separate election form. See the IRS page on Form 2553.
The choice depends on expected profit, how owners take pay, whether you plan to bring in outside investors, and federal tax effects. Because the answer depends on your numbers, have a CPA model both options before you file the election.
What It Costs
| Item | Cost | Notes |
|---|---|---|
| Articles of Incorporation (ARTS-GS) | $100 | Required filing fee |
| Name reservation | $10 | Holds the name for 60 days |
| Expedited filing | $350 (24-hour), $750 (same-day), $15 (drop-off special handling) | Optional |
| Statement of Information (SI-550) | $25 | Due within 90 days, then every year |
| Minimum franchise tax | $800 | Waived in the first taxable year |
| First-year state total | $125 | $100 articles plus $25 Statement of Information, before any income tax |
| Later years, state minimum | $825 | $800 franchise tax plus $25 Statement of Information, before any income tax |
Attorney, CPA, and registered agent fees are not quoted here because prices vary widely. Get written quotes before you hire anyone. Confirm current state fees on the Secretary of State and Franchise Tax Board sites, since fees and forms change.
Other Registrations You May Need
California has no general statewide business license. The Secretary of State issues no licenses or permits, and a seller’s permit is not a business license. Register based on what your company does:
- CDTFA seller’s permit. Required if you sell taxable goods. The permit is free. Register through the California Department of Tax and Fee Administration. The statewide sales tax rate is 7.25%, plus district taxes, and city rates run from 7.25% to 11.75%. See the sales and use tax page.
- EDD employer account. Required once you have employees. Register with the Employment Development Department. Employers do not register for this with the CDTFA or the Franchise Tax Board.
- Workers’ compensation coverage. Required once you have employees.
- City and county licenses. Most cities charge a local business tax or registration certificate, and 445 of 483 cities collect revenue from one. There is no common formula, so the answer depends on the city. Counties license only regulated activities. Search requirements on CalGOLD and confirm with your city or county.
- State professional licenses. State boards license regulated trades and professions. For contracting work, the Contractors State License Board sets the threshold for a required license at $1,000.
- Fictitious business name. If you operate under a name other than the corporate name, file a Fictitious Business Name Statement with the county clerk in your principal place of business within 40 days of starting. Publish it in a newspaper once a week for four weeks. It expires after five years, so renew it on time. See the Secretary of State fictitious business names page.
For free advisory help with registrations and planning, the California Small Business Development Center network has local centers across the state.
Disclaimer: This guide is informational only and is not legal or tax advice. Before you form your corporation or choose between C and S status, consult a qualified California attorney and a CPA about your situation.