Essay Example on How to start a C Corporation in California

Published: 2023-03-13
Essay Example on How to start a C Corporation in California
Type of paper:  Course work
Categories:  Education Psychology Sociology
Pages: 3
Wordcount: 566 words
5 min read


Every business requires a unique name. Therefore, if you want to form a C Corporation in California, you must search and choose the right name for the Corporation. The search is done on the CA Secretary of state website. The name cannot match another business that exists in California. It is also essential you provide an Address for the Corporation. The address could be the company office building or home address if you are planning to run the company from your residence.

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The next step is appointing a registered agent whose responsibility is to receive legal papers when legal issues arise, filling reports, and tax correspondence (Mancuso, 2017). You then set corporate bylaws similar to the company constitution. Next, you select a board of directors and hold the first board meeting. After the board meeting, the Corporation holds the first shareholder meeting and issue stock. Upon gathering all the information of your Corporation, you file an Articles of Incorporation then send it to Secretary of the state.

Differences between a C corporation and a Limited Liability Company (LLC)

A C Corporation is formed through filling corporate organization forms in the state where the Corporation is located. Board of Directors is established by the Corporation to oversee the business. While a Limited Liability Company is formed by one or several business people, who become the owners. These owners are referred to as members. The members file articles of organization to create the business and then settle on an operating agreement to use in the management of day-to-day activities. Every member has a particular percentage share of company ownership.

A C Corporation has a corporate revenue tax, and the shareholders are taxed on their tax returns in which they get profits. A Limited Liability Company is better for tax purposes because you pay taxes on the profit you gained at your income level.

To form a C Corporation, you have to register your business name, then file an article of incorporation and pay a fee. Additionally, you have to draft bylaws of the corporate and hold a board of directors conference. A limited liability company does not follow all those procedures, and it is easier to form (Stecker, 2016). To open an Limited Liability Company, you need to file an article of organization with the Secretary of the state of California and create an Limited Liability Company operating agreement that stipulates the responsibilities and ownership of the members.

Duties of the board of director of a corporation to the company

The board of Directors has many tasks though their main role is to safeguard shareholders' properties and make sure the shareholders get a reasonable profit on their investment. The board is also responsible for the management of the business. It is their responsibility to make operational and strategic decisions of the company (Bottomley, 2016). The board ensures that the company follows and meets its statutory requirements. It is the responsibility of the board to approve the company's' financial reports, direct share repurchases programs, and recommends or disapprove mergers and acquisitions. Besides, it is the responsibility of the board to appoint and fire the Chief executive officer.


Bottomley, S. (2016). The constitutional corporation: Rethinking corporate governance. Routledge.

Mancuso, A. (2017). How to form a nonprofit corporation in California. Nolo.

Stecker, M. J. (2016). Awash in a sea of confusion: Benefit corporations, social enterprise, and the fear of "greenwashing". Journal of Economic Issues, 50(2), 373-381.

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