Your California Startup: What you need to know for your business.

Important information about starting a business in California

With LLCs, S corporations, C corporations, nonprofit corporations, foreign corporations, and Fictitious Business Names to choose from, how can you decide which is best for your specific needs? ClickAndInc.com has collected pertinent information on all of these entity types so that you can make an informed decision as you start your California business. When you’ve decided, just let us know what business type you'd like for you're California startup and we'll help you do the rest.

California C Corporation

When you file a regular for-profit corporation in California, by default you are filing a C Corporation; the “C” qualifier refers to the tax classification with the IRS. A C Corporation is subject to income tax (and is not taxed separately from the owners’ income taxes) and can be owned by US citizens, non-US citizens, resident aliens, and outside business organizations alike.

Your C Corporation has the ability to issue multiple classes of shares—something that an S Corporation does not have—and you can have an unlimited amount of shareholders.

Learn how ClickAndInc.com can help you form your California C Corporation.

California S Corporation

When you form a corporation, if you wish to obtain “S” status, you will simply file an S-Corp Election form with the IRS.

S corps cannot have more than 100 shareholders, and those shareholders must be US citizens (no non-US citizens, non-resident aliens, or outside business entities). S corporations are pass-through entities, which means that they avoid the double-taxation of a C Corporation by allowing gains and losses to be reported on the owners’ tax returns.

If you’re still not sure if this type of entity is right for you, you can review further information on forming a California S Corporation.

California LLC

The Limited Liability Company is a relatively new entity type; it is a hybrid entity, containing some aspects of a partnership and other aspect of a corporation. It is like a C Corporation in that its members can be citizens, non-citizens, or other businesses, and it can issue multiple classes of stock. However, it is taxed as a pass-through entity (like an S Corporation), allowing owners to deduct their business losses on their individual returns and pay income tax individually, thus avoiding what is known as double-taxation (such as in a C corporation).

For further information, please take a look at our section on forming a California LLC.

California Foreign Corporation

According to the California Corporations Code, any company that plans to “[enter] into repeated and successive transactions of its business in this state, other than interstate or foreign commerce" must file as a foreign corporation in order to legally do so. Along with filing a Statement and Designation by Foreign Corporation form, a Certificate of Good Standing (sometimes called a Certificate of Status) must be submitted. That Certificate is obtained from your original state of domestication and is used to prove that your corporation does in fact exist, and that it has remained complaint in the original state. (If it has not remained complaint, the Certificate will reflect this.)

ClickAndInc.com can take care of the Application for you; we can even obtain your original Certificate of Good Standing. Before you make your decision, review some more important information about forming a California Foreign Corporation.

California Nonprofit Corporation

If your business is being formed for charitable, religious, scientific, educational, or literary purposes, you may wish to form a 501(c)(3) nonprofit corporation so that you can collect tax-exempt donations. This is a two-step process: first, you must file nonprofit Articles of Incorporation with the state, which registers your nonprofit corporation. Then, you must obtain the 501(c)(3) status at the federal level.

ClickAndInc.com can help you register your nonprofit corporation—we can even assist you with applying for the 501(c)(3) status with the IRS. Take a closer look at forming a 501(c)(3) nonprofit corporations.

California Fictitious Business Name

In California, DBAs are called Fictitious Business Names and are filed at the county level, regardless of ownership structure. Each county has their own specific form and procedure for filing; however, each of these counties requires that you hold an address in that county. For instance, if you’d like to open a business in San Bernardino County, you should not submit an application listing a Los Angeles location—you would need to file your DBA in Los Angeles County.

Not only can ClickAndInc.com register your DBA in California—we can even take care of the mandatory legal notice, which must be published in a local newspaper of general circulation. Take a look at how we can help you form your California DBA.