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What are the main business structures available in California?
In California, you can register your business as an LLC (Limited Liability Company), Corporation (C-Corp or S-Corp), Partnership, or Sole Proprietorship. LLCs and Corporations are the most common structures for legal protection and tax benefits.
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How do I register a company in California?
To register a company, you must file the Articles of Organization (LLC) or Articles of Incorporation (Corporation) with the California Secretary of State (SOS). Once approved, you receive a registration certificate that legally establishes your business.
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What is the cost of company registration in California?
The registration cost depends on the entity type. For an LLC, the filing fee is $70, and for a Corporation, it is $100. Additionally, California requires an $800 annual franchise tax fee for most entities.
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Do I need a business name approval before registration?
Yes, the business name must be unique and not identical to any existing California business. You can check name availability through the California SOS business search portal before filing your registration.
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What is a Registered Agent, and is it mandatory?
Yes, every California company must have a Registered Agent with a physical address in the state. The agent receives legal notices, tax documents, and compliance correspondence on behalf of your company.
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How long does it take to register a company in California?
Typically, online filings are processed within 5 to 10 business days, depending on the workload at the California Secretary of State office. Expedited processing is available for an additional fee.
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Is a business address in California mandatory?
Yes, a California-based physical address is required for all business entities, including LLCs and Corporations, to receive government and legal correspondence.
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Do I need an EIN for my California company?
Yes, every business that hires employees, opens a bank account, or pays federal taxes must obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS).
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What is the difference between a California LLC and a Corporation?
A California LLC offers flexible management and limited liability, requiring at least one member. A Corporation, on the other hand, must have at least three directors and follows a stricter governance structure, suitable for investors and larger businesses.
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Can a foreigner or non-resident register a company in California?
Yes, non-residents and foreign nationals can register a company in California. However, they must appoint a local Registered Agent and have a U.S. mailing address for official communication.
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What are the annual compliance requirements in California?
Every company must file a Statement of Information (Form LLC-12 or Form SI-550) within 90 days of registration and then every year. Additionally, companies must pay the $800 franchise tax fee to the California Franchise Tax Board (FTB).
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Do I need business licenses after company registration?
Yes, most California businesses require city or county-specific business licenses. The type of license depends on your industry and location, which must be applied for separately after registration.
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What taxes does a California company have to pay?
California businesses must pay state income tax, franchise tax, and employment taxes. Corporations and LLCs also pay a minimum franchise tax of $800 annually, even if they do not operate actively.
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Can I register my business online in California?
Yes, you can register online through the California Secretary of State’s bizfile Online Portal, where you can file, pay, and track your company registration status.
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Do I need to draft an Operating Agreement for my LLC?
Yes, California requires all LLCs to maintain an Operating Agreement, even if it’s not filed with the state. This document outlines member roles, capital contributions, and profit distribution.
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What is the Statement of Information for California companies?
The Statement of Information is an annual or biennial report that updates the state on your company’s address, management, and Registered Agent details. Failing to file may lead to penalties or suspension.
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How can I close or dissolve a company in California?
To close a company, you must file a Certificate of Dissolution with the California SOS and clear all tax dues with the Franchise Tax Board (FTB). LLCs can file Form LLC-3 or LLC-4/7 to terminate their registration.
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What penalties apply for not filing annual reports or taxes?
If you fail to file your Statement of Information or pay franchise tax, the company may incur a $250 penalty and risk suspension by the California SOS or FTB.
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Can I open a business bank account in California after registration?
Yes, once your company is registered and you have obtained an EIN, you can open a U.S. business bank account to manage your company’s financial transactions.
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How does Ebizfiling assist with company registration in California?
Ebizfiling manages the entire registration process, including name reservation, document filing, EIN application, and compliance setup. We ensure your company meets California’s legal, tax, and operational requirements efficiently.