How to Form Your Own California Corporation

1. Choosing the Right Legal Structure for Your Business

• The Different Ways of Doing Business
• Comparing Business Entities at a Glance

2. How California Corporations Work

• Types of California Corporations
• Corporate Powers
• Corporate People
• How Many People May Organize the Corporation?
• Capitalization
• Selling Stock
• Paying Dividends
• Dissolving a Corporation
• Piercing the Corporate Veil

3. Issuing and Selling Stock

• Securities Laws and Exemptions
• The Limited Offering Exemption
• Federal Securities Act

4. Corporate Taxation

• California Taxes
• Federal Taxes
• S Corporation Tax Status
• Corporate Accounting Periods and Tax Years
• Tax Concerns When Stock Is Sold
• Tax Treatment When an Existing Business Is Incorporated
• Tax Treatment of Employee Compensation and Benefits

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. Appoint Initial Corporate Directors
• Step 6. Prepare Minutes of the First Meeting of the Board of Directors
• Step 7. Prepare Shareholder Representation Letters
• Step 8. Prepare and File Notice of Stock Transaction Form
• Step 9. Issue Shares of Stock

6. After You Incorporate

• Postincorporation Paperwork and Tasks
• Tax Forms—Federal
• Tax Forms—State
• Licenses and Permits
• Workers’ Compensation Insurance
• Private Insurance Coverage

7. Lawyers and Accountants

• Lawyers
• Accountants and Tax Advisers

Appendix A: How to Use the CD-ROM

• Installing Files Onto Your Computer
• Using the Word Processing Files to Create Documents
• Using California Government Forms
• Files on the CD-ROM

Appendix B: Contact Information and Incorporation Forms (Included on the CD-ROM and as Tear-Outs)

List of Forms

• Incorporation Forms
• Name Availability Inquiry Letter
• Name Reservation Request Form
• Articles of Incorporation
• Cover Letter for Filing Articles
• Bylaws
• Incorporator’s Statement
• Notice and Meeting Forms
• 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 (not on CD-ROM)
• Stock Certificates (not on CD-ROM)

Index