The book that has helped thousands of Californians incorporate their businesses!

You can save thousands in attorney fees by incorporating your own small businesses. Fortunately, How to Form Your Own California Corporation makes incorporating a straightforward task, showing you how to file articles of incorporation, set up a corporate records book, prepare bylaws and issue shares of stock.

Incorporation provides great benefits, such as:

limited personal liability
tax advantages
access to capital
employee perks

How to Form Your Own California Corporation contains all the forms, instructions, tax rules, practical information and step-by-step instructions you need to incorporate a California business, as tear-outs and on CD-ROM.

The 12th edition is completely updated and revised to provide current regulations, tax requirements and forms. The forms from the book CD-Rom, are available under the Appendix B of this EBOOK.
*The CD-ROM is not included with the digital version of this book.

Choosing the Right Legal Structure for Your Business

To help you make sure that forming a California corporation is the best legal and tax approach for your business, this chapter compares the California corporation to other small business legal structures. Our discussion is based upon recent tax and legal rule changes, most significantly, the rise of a new legal structure, the limited liability company. This relatively new way to organize a business shares some of the traditional legal and tax qualities of the corporation, while at the same time offering several of the less formal attributes of a partnership. The corporation continues, however, to stand apart from all other business forms due to its built-in organizational structure and unique access to investment sources and capital markets. It also continues to uniquely answer a need felt by many business owners who are attracted to the formality of the corporate form, a quality not shared by the other business structures.

The Different Ways of Doing Business

There are several legal structures or forms under which a business can operate, including the sole proprietorship, partnership, limited liability company and corporation. In addition, two of these structures have important variants. The partnership form has spawned the limited partnership and the registered limited liability partnership. And the corporation can be recognized, for tax purposes, as either the standard C corporation, in which the corporation and its owners are treated as separate taxpaying entities, or as an S corporation, in which business income is passed through the corporate entity and taxed only to its owners on their individual tax returns.

Often, business owners start with the simplest legal form, the sole proprietorship, then move on to a more complicated business structure as their business grows. Other business people pick the legal structure they like best from the start, and let their business grow into it. Either way, choosing the legal structure for your business is one of your important decisions when starting a business. The analysis we present here, which includes examples of businesses that might sensibly choose each type of business structure, should help you make a good decision.

For an expanded analysis and comparison of the different business forms, see the Legal Guide for Starting & Running a Small Business, by Fred S. Steingold (Nolo).

1. Sole Proprietorship
A sole proprietorship is the legal name for a one-owner business (spouses can co-own and help run a sole proprietorship, too). When people think of a "mom and pop" or a home-based business, they are usually thinking of a sole proprietorship. A sole proprietorship has the following general characteristics:

Ease of Formation.
The sole proprietorship is the easiest to establish legally. Just hang out your shingle or "Open for Business" sign, and you have established a sole proprietorship. Sure, there are other legal steps you may wish to take -- such as registering a fictitious business name different from your own individual name by filing a "dba statement" with the county clerk -- but these steps are not necessary to establish your business legally.

Personal Liability for Business Debts, Liabilities and Taxes.
In this simplest form of small business legal structures, the owner, who usually runs the business, is personally liable for its debts, taxes and other liabilities. Also, if the owner hires employees, she is personally responsible for claims made against these employees acting within the course and scope of their employment.

 

The book that has helped thousands of Californians incorporate their businesses!

Introduction

1 -Choosing the Right Legal Structure for Your Business

2 -How California Corporations Work

3 -Issuing and Selling Stock

4 -Corporate Taxation

5 -Steps to Form Your Corporation

Step 1. Choose a Corporate Name
Step 2. Prepare Your Articles of Incorporation.
Step 3. Set Up a Corporate Records Book (Or Order a Corporate Kit)
Step 4. Prepare Your Bylaws
Step 5. Prepare Minutes of the First Meeting of the Board of Directors
Step 6. Prepare Shareholder Representation Letters
Step 7. Prepare and File Notice of Stock Transaction Form
Step 8. Issue Shares of Stock


6 -After You Incorporate

7 -Lawyers and Accountants

A -Appendix A: How to Use the CD-ROM

B -Appendix B: Contact Information and Incorporation Forms

List of Forms

Name Availability Inquiry Letter
Name Reservation-Order Form
Articles of Incorporation
Cover Letter for Filing Articles
Bylaws
Waiver of Notice and Consent to Holding of First Meeting of Board of Directors
Minutes of First Meeting of the Board of Directors
Shareholder Representation Letter
Notice of Transaction Pursuant to Corporations Code Section 25102(f)
Bill of Sale for Assets of a Business
Receipt for Cash Payment
Form for Cancellation of Indebtedness
Bill of Sale for Items of Property
Receipt for Services Rendered
Share Register and Transfer Ledger
Stock Certificates


Index
*The CD-ROM is not included with the digital version of this book.

An excellent book.

 

Anthony Mancuso is a corporations and limited liability company expert. He graduated from Hastings College of Law in San Francisco, is a member of the California State Bar, writes books and software in the fields of corporate and LLC law, and studies advanced business taxation at Golden Gate University in San Francisco. He has also been a consultant for Silicon Valley EDA (Electronic Design Automation) companies, most recently working on a C++ open-source integrated circuit database project team. He is the author of several Nolo books on forming and operating corporations (both profit and nonprofit) and limited liability companies. His titles include Incorporate Your Business, How to Form a Nonprofit Corporation (national and California editions), Form Your Own Limited Liability Company, The Corporate Records Handbook, and LLC or Corporation?. He wrote and programmed Nolo’s LLC Maker and Incorporator Pro software programs, which generate state-by-state articles and other forms for organizing corporations and LLCs. His books and software have shown over a quarter of a million businesses and organizations how to form a corporation or LLC. He also is a licensed helicopter pilot and has performed for years as a guitarist in many musical idioms.

 

How to Form Your Own California Corporation by Anthony Mancuso
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