Business Law California

In California if a person wishes to start a business may set up the following business entities:
  1. Limited Liability Companies
  2. Partnerships
  3. Corporations Sole
  4. Unincorporated Associations
  5. Nonprofit Public Benefit Corporations
  6. Nonprofit Mutual Benefit Corporations
  7. Nonprofit Religiouedical, Hospital, or Legal Services Corporations
  8. Corporations For Specific Purposes, such as
    1. Consumer Cooperative Corporations
    2. Fish marketing
    3. Small businesses
The procedure for incorporation in California is governed by the California Corporation Code. In order to form a limited liability company, one or more persons shall execute and file articles of organization with, and on a form prescribed by, the Secretary of State and, either before or after the filing of articles of organization, the members shall have entered into an operating agreement. The person or persons who execute and file the articles of organization may be member or members of the limited liability company.
  1. The first step is to check if the corporate name is available and a certificate of reservation for any name not prohibited and is available, may be issued by the Secretary of the State. Upon the issuance of the certificate the name stated therein may be reserved for a period of 60 days. Within this period the Articles of Incorporation may be filed.
  2. After the corporate name is selected, the articles of incorporation are prepared and filed with the Secretary of State of California and it may obtain a federal tax identification number from the Internal Revenue Service using IRS form SS-4.
  3. Immediately after filing articles of Incorporation the directors hold their first meeting. The meeting is necessary for the purpose of election of directors and officers, authorization of stock issuance, adoption of bylaws, finalizing the corporate office address, selection of bank where the account to be maintained, and such other matters as may be required.
  4. In the first meeting of directors who authorize the initial stock, a permit must be obtained from the Department of Corporations for issuing the stock and then the corporation issues stock. The corporation raises the initial capital fund through the shareholders or issue stock by registering with the Department of Corporations.
  5. A business license may be obtained from the city where the corporation is located.
  6. After the articles of incorporation, first meeting of directors and stock issuance are completed, the basic formation of the corporation has been completed. However, there are other business matters that must be completed to set up the corporation as an existing business which varies depending on the type of company.


  1. Any foreign corporation (not being a foreign association) not engage in intrastate business transaction may register its corporate name subject to availability of such name with the Secretary of State, and carry on its business.
  2. Such registration may be made by filing
    1. an application for registration signed by a corporate officer stating:
      • the name of the corporation,
      • the state or place under the laws of which it is incorporated,
      • the date of its incorporation, and
      • that it desires to register its name under this section;
    2. a certificate of an authorized public official of the state or place in which it is organized stating that such corporation is in good standing under those laws. The registration may be effective until the close of the calendar year in which the application for registration is filed.
  3. The corporation, which has in effect a registration of its corporate name, may renew such registration from year to year by annually filing an application for renewal.