How to Start a C-Corp in California (Quick Answer)
To start a C-corp in California, file Articles of Incorporation (Form ARTS-GS) with the California Secretary of State through bizfile Online, name an agent for service of process, and pay the $100 filing fee. Once the state approves it, your corporation legally exists.
After that, you adopt bylaws, appoint directors and officers, issue stock, get an EIN, and file your first Statement of Information within 90 days.
A California C-corp does not owe the $800 minimum franchise tax in its first year, which is the opposite of the LLC rule, where an LLC owes the $800 from year one.
| Filing document | Articles of Incorporation (Form ARTS-GS) |
| Where to file | California Secretary of State, through bizfile Online |
| Filing fee | $100 (plus a $15 counter fee if you file in person) |
| Agent for service of process | California's term for a registered agent; needs a physical California address, no PO box |
| EIN | Required, free from the IRS (Form SS-4 by phone, fax, or mail if you have no SSN or ITIN) |
| First Statement of Information | Form SI-550, $25, due within 90 days of forming, then every year |
| $800 minimum franchise tax | Waived in the first taxable year for corporations; from year two it is the greater of $800 or 8.84% of net income |
| Corporate income tax | 8.84% on net income (a C-corp still pays this on first-year income, even though the $800 minimum is waived) |
| Foreign owner (25% or more) | File Form 5472 with Form 1120 every year, or face a $25,000 minimum penalty |
First-year cost: $100 to file, plus an agent-for-service-of-process service if you are not in California (commonly $35 to $300 a year), and the $25 Statement of Information within 90 days. Unlike an LLC, a California C-corp does not owe the $800 minimum franchise tax in year one.
The trade-off is on the compliance side. A California corporation files its Statement of Information every year, while an LLC files only every two years, so the corporation's yearly paperwork is heavier even though its first-year tax is lighter.
TL;DR
- The first year is lighter than you think: a California C-corp does not owe the $800 minimum franchise tax in its first taxable year, though LLCs do.
- Step 1, name: pick a unique name with a corporate designator (Inc., Corporation, or Corp.) and check it with the Secretary of State.
- Step 2, agent for service of process: California's term for a registered agent, with a physical California address.
- Step 3, Articles of Incorporation (Form ARTS-GS): file with the Secretary of State through bizfile Online for $100.
- Step 4, bylaws: adopt internal bylaws and keep them with your records.
- Step 5, directors and officers: appoint the board and officers and hold an organizational meeting.
- Step 6, issue stock: authorize and issue shares, keep a stock ledger, and file the 83(b) election within 30 days if your shares vest.
- Step 7, EIN and first Statement of Information: get a free EIN from the IRS, and file Form SI-550 ($25) within 90 days of forming.
- Ongoing: from year two, the greater of $800 or 8.84% of net income, plus a Statement of Information every year.
- Foreign owner (25% or more): file Form 5472 with Form 1120 every year, or risk a $25,000 penalty.
Why Form a C-Corp in California?
California has one of the largest concentrations of tech investors, engineers, and enterprise customers in the country. For a startup building in or around Silicon Valley, that access can matter more than the cost of forming elsewhere.
One thing to know first. Venture investors usually want the company they fund to be a Delaware C-corp, not a California one. A California C-corp alone does not give you that fundraising advantage, so founders planning to raise often form in Delaware and then register in California as a foreign corporation.
California's cost is also real. From year two, a C-corp owes at least the $800 minimum franchise tax every year, plus a Statement of Information each year, on top of the 8.84% corporate tax on income.
Step 1: Choose and Reserve Your Corporate Name
- Include a corporate designator such as "Inc.", "Incorporated", "Corporation", or "Corp."
- Search the Secretary of State's business database to confirm the name is available and different from existing entities.
- Reserve the name for 60 days for a small fee if you are not ready to file.
Step 2: Appoint an Agent for Service of Process
California calls its registered agent an agent for service of process. It is the same role: a person or company with a physical California address, available during business hours to accept legal documents for the corporation.
- An individual agent must be a California resident with a street address, not a PO box.
- A commercial agent registers with the state before it can act for other businesses.
- If you are not in California, you will use a paid service, commonly $35 to $300 a year.
Step 3: File Your Articles of Incorporation (Form ARTS-GS)
Form ARTS-GS is the filing that legally creates your corporation. You file it with the California Secretary of State, usually through bizfile Online.
- It lists the corporate name, agent for service of process, business purpose, and the number of shares the corporation is authorized to issue.
- The filing fee is $100, plus a $15 counter fee if you file in person.
- Processing time varies and can run several weeks in busy periods, and California sells expedited options.
- Once the state accepts it, your corporation exists and the 90-day clock for the Statement of Information starts.
Step 4: Adopt Corporate Bylaws
Bylaws are the internal rulebook for how the corporation is run. They are not filed with the state, but a corporation is expected to have them, and banks and investors often ask to see them.
- They set out how directors and officers are elected, how meetings and votes work, and how shares are handled.
- They stay with your records, not with the Secretary of State.
- Skipping them weakens the separation between you and the corporation that liability protection depends on.
Step 5: Appoint Directors and Hold the Organizational Meeting
A corporation is run by a board of directors, who appoint the officers that handle day-to-day work. Right after formation, the incorporator or initial directors hold an organizational meeting, or sign a written consent in place of one.
- Appoint the initial board and elect officers (usually at least a president, secretary, and treasurer; one person can hold several roles).
- Adopt the bylaws and authorize the issuance of stock.
- Keep signed minutes or the written consent with your records.
Step 6: Authorize and Issue Stock
Issuing stock is how founders get their ownership, and it is easy to rush. The board authorizes shares, then the corporation issues them to the founders and any early shareholders.
- Issue shares to each founder and record what they paid (cash, property, or services).
- Keep a stock ledger, a running record of who owns how many shares.
- Deliver stock certificates or record the issuance electronically, per your bylaws.
The 83(b) election, and its 30-day deadline: if your founder shares vest over time, you generally have 30 days from the grant date to file an 83(b) election with the IRS. It lets you be taxed on the small value at grant instead of the higher value as the stock vests. The 30-day window cannot be extended, and missing it can be expensive.
Step 7: Get an EIN and File Your First Statement of Information
An EIN is your corporation's federal tax ID, needed to file taxes, run payroll, and open a bank account. It is free from the IRS.
- With an SSN or ITIN, apply online and get the EIN in minutes.
- Without an SSN or ITIN, apply on Form SS-4 by phone, fax, or mail.
- File your first Statement of Information (Form SI-550) within 90 days of forming, for $25. This is a California-specific deadline that is easy to overlook.
Open a US Business Bank Account
Once you have the EIN, open a dedicated business bank account before money moves through the corporation.
- Keeping corporate and personal funds separate protects the liability shield; mixing them is a common reason courts pierce it.
- Banks usually ask for the filed Articles of Incorporation, the EIN letter, and often the bylaws or a board resolution.
- A separate account also makes bookkeeping and the corporate tax return simpler.
If Your California C-Corp Is Foreign-Owned
A California C-corp that is 25% or more owned by a non-US person has an extra federal filing that trips up many international founders.
- The corporation files Form 5472 with its annual Form 1120 to report transactions with the foreign owner, such as money put in or paid out for services.
- It is required every year there are reportable transactions, even with little or no profit.
- The penalty is steep: a missed or late Form 5472 starts at $25,000 per form, per year.
Handle California's Ongoing Compliance
California's ongoing costs run higher than in cheaper states. Two obligations matter most: the franchise tax and the Statement of Information.
The $800 Minimum Franchise Tax, and the First-Year Break
- A California C-corp does not owe the $800 minimum in its first taxable year. This break is corporation-only; LLCs owe the $800 in year one.
- If the corporation has net income in year one, it still pays 8.84% on that income. Only the $800 floor is waived.
- From year two, it owes the greater of $800 or 8.84% of net income, every year, whether or not it makes a profit.
The Statement of Information Is Annual for Corporations
- File Form SI-550 within 90 days of forming, then every year. An LLC files this only every two years, so the corporation's schedule is heavier.
- The fee is $25.
- It confirms your officers, directors, agent, and address. Missing it can add a penalty and put the corporation out of good standing.
Federal Filings
- The corporation files Form 1120 and pays 21% federal corporate tax on profits, due the 15th day of the 4th month after year-end (April 15 for a calendar-year corporation).
How Much Does It Cost to Start a C-Corp in California?
| What you pay | Amount | When |
|---|---|---|
| Articles of Incorporation (Form ARTS-GS) | $100 (plus $15 if filed in person) | One time, at formation |
| Agent for service of process (optional service) | ~$35 to $300 a year | Yearly, if you use one |
| Statement of Information (Form SI-550) | $25 | Within 90 days, then yearly |
| Minimum franchise tax | $0 in year one, then the greater of $800 or 8.84% of net income | Yearly, from year two |
| Corporate income tax | 8.84% of net income | Yearly |
| Federal corporate tax | 21% of profits | Yearly, with Form 1120 |
How Long Does It Take to Start a C-Corp in California?
- bizfile Online processing varies and can run several weeks in busy periods; California sells expedited options.
- The EIN follows: minutes online with an SSN or ITIN, or same day to several weeks by Form SS-4 without one.
- The first Statement of Information is due within 90 days of forming either way, so put it on the calendar at formation.
Common Mistakes to Avoid
- Assuming the $800 minimum hits in year one. For a corporation it does not; that is the LLC rule.
- Forgetting the 8.84% still applies to first-year income, even though the $800 minimum is waived.
- Missing the Statement of Information, which is annual for corporations, not every two years, and is first due within 90 days.
- Forming a California C-corp expecting it to satisfy venture investors, who usually want a Delaware C-corp.
- Missing the 30-day 83(b) deadline on vesting founder stock.
- Overlooking Form 5472 if the corporation is 25% or more foreign-owned.
How FinStackk Helps
FinStackk is an accounting and tax compliance platform for U.S. businesses, taking you from incorporation through ongoing accounting, tax, and compliance in one place.
We handle California C-corp formation, from the Articles of Incorporation through the EIN, through Fin-Start, including the agent for service of process.
Once the corporation exists, Fin-Tax keeps the federal Form 1120 deadline, estimated taxes, and California's franchise tax (the greater of $800 or 8.84% of income) on a proactive calendar.
Complyy tracks the annual Statement of Information and your agent renewal. Book a free demo to see them in action.
FAQ
Does a California C-corp pay the $800 minimum franchise tax in the first year?
No. A corporation incorporated in California does not owe the $800 minimum franchise tax in its first taxable year. This is corporation-only; LLCs lost their first-year break when the AB 85 waiver expired, so an LLC owes the $800 in year one. If a C-corp has net income in year one, it still pays 8.84% on that income, and the $800 minimum resumes in year two.
How much does it cost to start a C-corp in California?
It costs $100 to file the Articles of Incorporation (Form ARTS-GS), plus $15 if you file in person. Add an agent-for-service-of-process service (about $35 to $300 a year) if you are not in California, and the $25 Statement of Information within 90 days. From year two, budget for the $800 minimum franchise tax and the 8.84% corporate tax on income.
How often do I file the Statement of Information?
A California corporation files Form SI-550 within 90 days of forming, then every year, for $25. This is different from an LLC, which files only every two years. It confirms your officers, directors, agent, and address, and missing it can add a penalty and cost your good standing.
Is it better to start a corporation or an LLC in California?
An LLC is simpler and taxed once, which suits many small businesses. A C-corp makes sense if you plan to raise venture capital, keep earnings in the business to grow, or want multiple classes of stock. Note the first-year franchise tax break works in the corporation's favor, but a C-corp is taxed twice, once at the corporate level and again on dividends.
Should I form my C-corp in California or Delaware?
If you plan to raise venture capital, investors will most likely want a Delaware C-corp. If you will operate mainly in California and not raise venture money, forming in California avoids registering and paying in two states, since a Delaware corporation doing business in California still has to register and pay here. Choose based on where you operate and whether you will raise money.
Can a non-US resident start a California C-corp?
Yes. California sets no citizenship or residency requirement to own a corporation. You will need an agent for service of process at a physical California address, usually a paid service, and an EIN, which you apply for on Form SS-4 by phone, fax, or mail without an SSN. If a non-US person owns 25% or more, the corporation also files Form 5472 with its Form 1120 every year, with a $25,000 minimum penalty for missing it.
Does a California C-corp pay income tax?
Yes. A C-corp pays California's 8.84% corporate income tax on its net income, in addition to the 21% federal corporate tax. From year two, it also owes at least the $800 minimum franchise tax, meaning it pays the greater of $800 or 8.84% of net income each year, whether or not it makes a profit.