How to Form a C Corp in California: Filing, Stock, and Taxes

To form a C corp in California, you file Articles of Incorporation with the California Secretary of State and pay a $100 filing fee.¹ That single filing creates the corporation, but the work does not end there. You will also need a federal tax ID, an initial Statement of Information within 90 days, bylaws and stock issued to founders, and a plan for the $800 annual minimum franchise tax that begins in the corporation’s second year.

Pick a Name That Will Clear the Secretary of State

Your corporate name has to be distinguishable from every other business entity already on file with the Secretary of State. Run it through the SOS online business search before you commit. The name must also carry a corporate designator: “Corporation,” “Incorporated,” “Limited,” or an abbreviation such as “Corp.,” “Inc.,” or “Ltd.”² A close corporation must specifically use “Corporation,” “Incorporated,” or “Limited” (or one of their abbreviations) in the name.³

If the name is available but you are not ready to file, you can reserve it with the SOS for 60 days. A reservation is not a trademark. If brand protection matters, search the USPTO database and California’s trademark registry separately.

Draft the Articles of Incorporation

The Articles are the document that brings the corporation into legal existence. California Corporations Code Section 202 sets the required contents, and the Secretary of State publishes a standard form (Articles of Incorporation — General Stock Corporation) that handles the basics.³ At minimum the Articles must state:

The corporate name, with a required designator.
The purpose. Most incorporators use the standard “any lawful act or activity” language, excluding banking or trust company business, rather than tying the corporation to a single industry.
The total number of shares the corporation can issue. For one class of stock, list the total. For multiple classes or series, list each class with its share count. This ceiling limits how much stock you can distribute without amending the Articles later.
An agent for service of process. This is either an individual who lives in California with a full street address (no P.O. boxes) or a corporate agent registered with the SOS under Section 1505.
The street address of the principal office, plus a mailing address if it differs.

If you plan to authorize preferred stock or create special share classes, which is common for venture-backed startups, spell out the rights, preferences, and restrictions in the Articles, or authorize the board to set those terms later. Getting the share structure right at formation saves you the cost of amendments down the road.

File With the Secretary of State

You can file the Articles online through California’s bizfile portal or by mail. Online is faster.⁴ The filing fee is $100.¹

Once the SOS stamps and processes the Articles, the corporation legally exists. The stamped Articles are what you present to open a bank account, apply for licenses, or prove the corporation’s existence to third parties. Order a certified copy while you are filing; banks and investors sometimes require one.

Get an EIN and Hold the Organizational Meeting

Next comes the Federal Employer Identification Number from the IRS. You need it before you can open a corporate bank account, file tax returns, or register with the Franchise Tax Board. The IRS issues an EIN immediately through its online application, but the entity has to be formed with the state first.⁵

Hold the initial organizational meeting of the board soon after incorporation. That meeting is where the corporation starts functioning. The board typically:

Adopts the corporate bylaws.
Elects the initial officers (president, secretary, treasurer or CFO).
Authorizes the issuance of stock to founders.
Approves a banking resolution.
Sets the fiscal year.

Document everything in written minutes. The minutes, bylaws, stock ledger, and copies of the Articles form the corporation’s permanent records and must be kept at the principal office in California, where shareholders have the right to inspect them.

File the Initial Statement of Information

Every California corporation must file a Statement of Information (Form SI-550 for stock corporations) within 90 days of filing its Articles.⁶ The form lists the current officers and directors with their addresses, the agent for service of process, and the principal office address.

After that first filing, you file an updated Statement of Information every year. The window opens on the first day of the calendar month in which the corporation originally filed its Articles, and you have six months from that date to file.⁶ Missing the deadline triggers a $250 penalty collected by the Franchise Tax Board, and the Secretary of State can suspend or forfeit the corporation’s powers.⁷ A suspended corporation cannot legally transact business or defend itself in court.

Issue Stock Without Violating Securities Law

Issuing stock is a securities transaction, even when the buyers are the founders and the price is zero. Both federal and California law regulate the sale, and new incorporators routinely skip this step. The consequence is not just paperwork: a shareholder can rescind the purchase and demand their money back.

California’s Limited Offering Exemption

Most small California corporations rely on Section 25102(f) of the Corporations Code to issue shares without full registration. The exemption allows stock sales to no more than 35 purchasers, not counting officers, directors, and certain other insiders, provided each buyer either has a preexisting personal or business relationship with the company’s principals or has enough financial sophistication to evaluate the investment. No advertising or general solicitation is allowed. The issuer may need to file a notice with the Department of Financial Protection and Innovation, though failing to file the notice does not destroy the exemption itself.⁸

Federal Exemption Under Rule 506(b)

On the federal side, most new corporations issue stock under Regulation D, Rule 506(b). It permits an unlimited raise from accredited investors and up to 35 non-accredited but financially sophisticated purchasers. You cannot use general solicitation or advertising, and you must file a Form D with the SEC after the first sale. Information you give investors must be accurate and free of material omissions. The California and federal exemptions can apply to the same offering, but you have to satisfy each one independently.

Taxes a California C Corporation Pays

California taxes C corporations in two layers: a flat minimum franchise tax that applies whether the company earns anything or not, and a percentage-based income tax on net earnings.

The $800 Minimum Franchise Tax

Every corporation incorporated, registered, or doing business in California owes an annual minimum franchise tax of $800.⁹ It applies whether the corporation is active, inactive, profitable, or losing money.¹⁰ The $800 is due on or before the 15th day of the fourth month of the current taxable year, which is April 15 for calendar-year corporations. It is a prepayment for the privilege of existing that year, not a bill settled after the year ends.

Newly incorporated or qualified California corporations are exempt from the $800 minimum in their first taxable year.¹⁰ Any net income during that first year still gets taxed at the regular rate. The exemption ends in year two.

Corporate Income Tax Rate

California taxes C corporation net income at a flat 8.84%. Banks and financial institutions pay 10.84%.¹¹ There are no graduated brackets for corporations. You report income on the California Corporation Franchise or Income Tax Return (Form 100) filed with the Franchise Tax Board.¹²

Estimated Tax Installments

If your total estimated tax for the year exceeds the $800 minimum, California requires installment payments rather than a lump sum.¹³ Installments fall on the 15th day of the 4th, 6th, 9th, and 12th months of the taxable year.¹⁴ The standard split is 30% in the 4th month, 40% in the 6th month, nothing in the 9th month, and 30% in the 12th month. The first installment must be at least equal to the $800 minimum. If the corporation owes only the $800 minimum, the full amount is due by the 15th of the 4th month with no installments.

Registering for Employment Taxes

If your corporation has employees, you must register with the California Employment Development Department within 15 days of paying more than $100 in wages in a calendar quarter.¹⁵ Here is what many new incorporators miss: in California, a corporate officer who receives any compensation is treated as an employee. A corporation with no workers other than its president has to register once the president draws more than $100 in wages in a quarter. EDD registration covers state unemployment insurance, state disability insurance, and employment training tax withholding. Federal unemployment tax (FUTA) applies separately at an effective rate of 0.6% on the first $7,000 of each employee’s annual wages, assuming state unemployment taxes are current and California has no outstanding federal loan balance.

Staying in Good Standing

A California C corporation keeps its good standing by hitting a short list of recurring deadlines. Miss enough of them and the Franchise Tax Board or Secretary of State will suspend the corporation, stripping its ability to conduct business, file lawsuits, or defend against them.⁷ The recurring calendar:

Annual Statement of Information, filed within the six-month window starting from the month of incorporation.⁶
$800 minimum franchise tax, due by the 15th of the 4th month of each taxable year.⁹
Form 100 tax return, due by the 15th day of the 4th month after the close of the taxable year.
Annual shareholder meeting for the election of directors. If no meeting is held within 60 days of the designated date, any shareholder can petition the court to order one.
Minutes of all board and shareholder meetings, the stock ledger, and the bylaws, kept at the principal office in California.

One thing you no longer need to worry about: the Corporate Transparency Act’s beneficial ownership information reporting. FinCEN issued an interim final rule in 2025 exempting all entities formed in the United States from BOI reporting.¹⁶ A California corporation does not need to file a BOI report.

What Happens If You Decide Not to Use the Corporation

If you form a corporation and later decide not to use it, do not simply walk away. California will keep billing the $800 minimum franchise tax every year until the corporation is formally dissolved. The process requires a vote by the board and shareholders to wind up and dissolve, a Certificate of Election to Wind Up and Dissolve filed with the Secretary of State, settlement of debts, distribution of remaining assets, a Certificate of Dissolution, and a final franchise tax return with the FTB. Until that final return is processed and the dissolution is complete, the $800 keeps accruing.

1
California Secretary of State. California Secretary of State Business Entities Fee Schedule
2
California Secretary of State. California Code of Regulations – Business Entity Names
3
California Legislative Information. California Code Corp – Section 202
4
California Secretary of State. Forms, Samples and Fees
5
Internal Revenue Service. Get an Employer Identification Number
6
California Legislative Information. California Corporations Code Section 1502
7
Franchise Tax Board. My Business Is Suspended
8
Department of Financial Protection and Innovation. Corporations Code Section 25102(f)
9
California Legislative Information. California Revenue and Taxation Code 23153
10
Franchise Tax Board. C Corporations
11
Franchise Tax Board. Business Tax Rates
12
Franchise Tax Board. 2025 Instructions for Form 100
13
California Legislative Information. California Revenue and Taxation Code 19025
14
Franchise Tax Board. 2025 Instructions for Form 100-ES Corporation Estimated Tax
15
Employment Development Department. Am I Required to Register as an Employer
16
FinCEN. FinCEN Removes Beneficial Ownership Reporting Requirements for U.S. Companies and U.S. Persons