California Corporations Laws

Deciding whether or not to incorporate a business is often a question for companies with hopes of becoming the next big thing. California corporations laws allow businesses to incorporate within the Golden State if they properly follow the requirements set out by the Secretary of State. This is a quick summary of the corporate laws in California.

Weighing the Benefits of Incorporation Under California Corporations Laws

There are several pros and cons of incorporating a business under California law. Making sure that the pros outweigh the cons is an essential process before spending the initial money to incorporate your company. If incorporation is right for your company, the next step is checking the availability of the business name that you wish to use.

The following table outlines the specifics of California corporations laws.

Code Sections

California Code - Division 1: General Corporation Law

Formation

One or more natural persons, partnerships, associations or corporations may form a corporation under California corporate laws by executing and filing articles of incorporation. If initial directors are named in the articles, each director named in the articles must sign and acknowledge the articles

Articles of Incorporation

The articles of incorporation must set forth:

  • The name of the corporation;

  • The purpose of the corporation;

  • The name and street address in this state of the corporation's initial agent for service of process;

  • The initial street address of the corporation;

  • The initial mailing address of the corporation, if different from the initial street address;

  • If the corporation is authorized to issue only one class of shares, the total number of shares which the corporation is authorized to issue;

  • If the corporation is authorized to issue more than one class of shares, or if any class of shares is to have two or more series: (1) The total number of shares of each class the corporation is authorized to issue, (2) The designation of each class, and (3) The rights, preferences, privileges, and restrictions granted to or imposed upon the respective classes.

Corporation Name

The name of the corporation must contain the word "corporation," "incorporated," or "limited" or an abbreviation of one of those words.

Purpose

The purpose is to engage in any lawful act or activity for which a corporation may be organized under California corporations laws. Also, the purpose of the corporation can be to engage in a profession permitted to be incorporated by the California Corporations Code.

Fees

In order to file forms with the secretary of state, incorporators must pay filing fees. These fees are posted online and are subject to change.

Incorporating your business can be an exciting step for a growing company. However, it is important that you take the necessary steps to ensure that your paperwork is properly filed with the state. If you would like legal assistance with forming a corporation, you can contact a California business organization attorney. You can also visit FindLaw's sections on corporate laws for more articles and information on this topic.

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