Benefits of using a Corporation

A corporation is a legal entity that is separate and distinct from its owners (shareholders). In California, forming a corporation offers several advantages:

• Limited Liability Protection: Shareholders are generally not personally responsible for business debts and liabilities.
• Perpetual Existence: A corporation continues to exist even if ownership changes.
• Access to Capital: Corporations can raise capital through the sale of stock.
• Credibility: Forming a corporation can enhance your business’s credibility with customers, suppliers, and potential investors.

Formation and Planning

Start your INC: Step 1
Please use the INC Intake Form here to provide some basic information about your business. We can also set up a brief consultation (included in the fixed fee price) to discuss your business plan and the annual requirements of operating a Corporation (INC) in the State of California.

Articles of Incorporation
The Articles of Incorporation is a document filed with the California Secretary of State to officially create the corporation. This document includes basic information about the corporation, such as its name, address, and the name and address of its registered agent.

Bylaws
Bylaws are internal rules and procedures for managing the corporation. They cover topics such as the election of directors, the conduct of meetings, and the responsibilities of officers.

Shareholder Agreement
A Shareholder Agreement is a document that outlines the rights and responsibilities of the shareholders. It can address issues such as the transfer of shares, dispute resolution, and dividend distribution.

Employer Identification Number (EIN)
An EIN, also known as a Federal Tax Identification Number, is required for tax purposes and is obtained from the IRS. It is used to identify the corporation for federal tax filings and is necessary to open a business bank account and hire employees.

S-Corp Election
A corporation can elect to be taxed as an S-corporation by filing Form 2553 with the IRS. This election allows the corporation to pass corporate income, losses, deductions, and credits through to its shareholders for federal tax purposes, potentially reducing overall taxes.

In a hurry? Download the checklist on your device.

What We Take Care Of:

1. We file the Articles of Incorporation on your behalf.
2. We draft the Bylaws and Initial Corporate Resolutions for your business.

What You Need To Do:

1. Review and Sign the Resolutions.
2. Make your copy of the Articles of Incorporation and go to https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online. From there, apply for an EIN for your business using the entity number given by the Secretary of State on your Articles of Incorporation.
   a. You will need to know:
   i. Name and Address of the responsible person filing (Use business address);
   ii. Social Security number of the responsible person filing.
   b. Once you complete the Application you will immediately receive an electronic letter from the IRS with your Corporation’s tax ID number (EIN).
3. Take a copy of your Articles of Incorporation, Bylaws, and EIN number and go to a bank to set up a business account for your new business.
4. Apply for any applicable business license for the municipality in which your business is located, if required. If you are in San Diego County you can use the link here to search if your city requires a license and how to apply:
   https://www.sandiegocounty.gov/content/sdc/cosd/businesslicenses.html.
   If you are located in the city of San Diego you can apply for your license, called a Business Tax Certificate using the link here:
   https://pay.sandiego.gov/BTaxApp/Login.aspx.
   You will need to set up an online account prior to completing the application.
5. If you are selling products, whether online or in a physical location, you must apply for a seller’s permit.
   a. If you are located in the State of California you can use the link below:
   https://onlineservices.cdtfa.ca.gov/_/ . You will have to set up an online account prior to completing the application. Once you do so you can use this link to access the application:
   https://www.ca.gov/service/?item=apply-for-sellers-permit.
   b. For information and frequently asked questions regarding the CA sellers permit application please use the link here:
   https://www.cdtfa.ca.gov/taxes-and-fees/faqseller.htm
6. Please consider seeking out a tax professional who can assist you in navigating any tax related issues with your
   business, especially if you intend to operate within multiple states, to be sure you are in compliance with all your
   financial operations. Your tax professional can also assist you in filing the IRS form 2553 if you elect to be taxed
   as an S-Corporation. Please be aware that this form must be filed within 2 months and 15 days from the date of
   your incorporation if you wish to be taxed as an S-Corp in your first year.
7. Within 90 days of the filing date of your Articles of Incorporation, you are required to file a Statement of Information with the Secretary of State identifying the names and addresses of the managers and/or members as well as any changes to the business address or agent for service of process. You can file this form online using the link here:
   https://bizfileonline.sos.ca.gov/search/business.
   Search for your business and you can click through to find the prompt to file the SOI online. Please also be advised that you are required to file a Statement of
   Information every 2 years from the date of your incorporation, even if no information has changed.
8. Under the new Corporate Transparency Act, you are currently required to file a federally mandated Beneficial Ownership Report unless you fall within a limited exception. Businesses incorporated after January 1, 2024, will have 90 days from the date of incorporation to file the report. To file the report online or to obtain more information please use the link here:
   https://www.fincen.gov/boi.

Please do not hesitate to ask if you need assistance with any of the steps above. We thank you again for your business and we look forward to assisting you with any of your future business needs. Additional services we provide clients include contract drafting and review, trademark filings, lease negotiations, and designing terms and conditions or privacy policies for your website. If you have any additional questions regarding either the formation process above or additional services, please feel free to contact us at (858) 926-5797 or info@tomgallagherlaw.com. We wish you luck on your future business endeavors.

● Note: If operating a website that sells online, make sure to be aware of the ADA regulations for the accessibility of the blind. To avoid being targeted by this influx of new ADA lawsuits, you will need to make sure your website is compliant with the ADA regulations.