Form an S-Corp in California
Everything you need to know about forming an S-Corp in California. Filing fees, requirements, timeline, and step-by-step guidance.
Want this turned into your personalized S-Corp roadmap for California?
See it free, no account needed. Save it later to track every step, deadline, and what comes after forming an S-Corp.
How to File
Choose a Corporate Name
Select a unique name that complies with California naming rules — it must include a corporate designator such as 'Inc.', 'Corp.', or 'Incorporated' and must be distinguishable from existing entities registered with the California Secretary of State. You can check name availability using the California Business Search tool on the SOS website.
30 minutes
Appoint a Registered Agent
Designate a registered agent (called an 'agent for service of process' in California) who has a physical street address in California and is available during normal business hours to receive legal and official documents. This can be an individual or a registered commercial agent service.
15 minutes
File Articles of Incorporation
Prepare and file Form ARTS-GS (Articles of Incorporation — General Stock Corporation) with the California Secretary of State, either online, by mail, or in person. The filing fee is $100, and you must list the corporation's name, registered agent, and initial directors.
1-2 hours
File an Initial Statement of Information
Within 90 days of filing your Articles of Incorporation, submit a Statement of Information (Form SI-550) to the California Secretary of State. This form provides key details about the corporation's officers, directors, and registered agent, and costs $25 to file.
30 minutes
What's Next After Filing
Once your S-Corp is officially formed, you'll want to complete these important steps:
- •Adopt Corporate Bylaws and Appoint Directors — Draft and adopt corporate bylaws that govern your corporation's internal operations, including rules for meetings, voting, officer roles, and share issuance. Hold an organizational meeting to appoint directors, elect officers, and authorize the issuance of stock.
- •Obtain EIN and Elect S-Corp Status with the IRS — Apply for a federal Employer Identification Number (EIN) from the IRS at no cost, then file IRS Form 2553 (Election by a Small Business Corporation) to elect S-Corporation tax treatment. All shareholders must sign Form 2553, and the election must be made by March 15 of the tax year it is to take effect (or within 75 days of incorporation for new entities).
- •Register with the California Franchise Tax Board and Obtain Licenses — Register with the California Franchise Tax Board (FTB) and pay the $800 minimum franchise tax, due by the 15th day of the 4th month after incorporation. Additionally, obtain any required state and local business licenses or permits, and open a corporate bank account to maintain separation of personal and business finances.
Advantages
- ✓Pass-through taxation avoids federal corporate double taxation, with profits and losses flowing directly to shareholders' personal tax returns
- ✓Shareholders who are active in the business may reduce self-employment tax by splitting income between reasonable salary and distributions, potentially saving thousands annually
- ✓Limited liability protection shields shareholders' personal assets from corporate debts and legal judgments
- ✓Enhanced credibility with investors, vendors, and customers compared to sole proprietorships or partnerships, and easier to transfer ownership through stock
Considerations
- •California imposes an $800 minimum annual franchise tax and a 1.5% S-Corp tax on net income over $1,000,000 at the entity level, making it more expensive than in many other states
- •Strict IRS eligibility requirements limit S-Corps to 100 shareholders, only one class of stock, and shareholders must be U.S. citizens or residents — disqualification ends S-Corp status
- •Significant administrative burden including required corporate formalities (bylaws, board meetings, minutes, stock issuance), annual filings, and payroll tax compliance for officer salaries, which increases accounting and legal costs
Annual Obligations
What OpenChamber Does
We don't file paperwork for you — we guide you through doing it yourself, which saves money and helps you understand your business from day one.
Personalized Checklist
Every task you need, organized by priority and tailored to California.
Vetted Professionals
When you need help, we connect you with professionals we trust.
Progress Tracking
Never lose track of where you are or what's next.
Track Your Progress
Get a personalized checklist for forming your S-Corp in California — and everything that comes after.
Get Your Free Checklist