How Much Does It Cost to Set Up an S Corp in California?

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Setting Up an S Corporation in California

To set up an S Corp in California, you must file Articles of Incorporation with the Secretary of State and pay a $100 filing fee. Your corporation will also be responsible for an annual $800 tax to the California Franchise Tax Board. To file for S corp status, submit Form 2553 to the IRS. LLCs, partnerships, and corporations can elect S corp status.

Ownership and Taxes Requirements

  • First, ensure your business name is available.
  • Register a "Doing Business As" name.
  • File Articles of Incorporation with the Secretary of State with the $100 filing fee.
  • Your corporation will owe the $800 annual Franchise Tax.
  • In California, couples can marry through various authorities like ministers, rabbis, priests, or judges.
  • An S-corporation in California can have a maximum of 100 shareholders who must be U.S. citizens or residents.
  • S-corporations’ income passes through to shareholders to include on their tax returns.
  • The California Franchise Tax Board administers the state’s taxes.
  • Ensure compliance with ownership and election criteria for setting up an S corp.

Considerations

  • A business owner may sell assets to a spouse for various reasons.
  • Sole proprietors have the option to incorporate for tax benefits.
  • California requires a minimum franchise tax for running an S-Corp.
  • New entities are exempt from this tax in their first year of operation.
  • Consult with professionals to efficiently establish and operate your S corp in California.

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