Forming an S-Corporation
This guide will provide the general steps required when forming an S-Corporation in California
Filing the Articles of IncorporationTruly the first thing you thing you will need to do is pick a name for your business. Then you can prepare your Articles of Incorporation and file them with the California Secretary of State.
Another decision you will need to make is whether or not you want to operate as a California Close Corporation. As a Close Corporation, a creditor will not be able to pierce the corporate veil if you fail to properly follow formalities. The downside to forming a Close Corporation is that any shareholder, regardless of the number of shares they hold can dissolve the corporation
Preparation and Execution of Governing DocumentsWhen you form an S-Corporation, there are numerous documents that will need to be prepared and executed. They include:
1. Resignation of the incorporator
2. Initial minutes
4. Shareholder agreement (if you choose a Close Corporation)
5. Buy-Sell Agreement (assuming there are multiple shareholders)
6. Bill of Sale or Subscription Agreement
Preparation and Execution of Share CertificatesIn order to be a true shareholder, you will need to prepare, execute, and issue share certificates.
Elect S-Corporation Status with the IRSMany people believe that when you form the corporation, you make the S-Election. That is actually not true. You make the election, within 75 days after the formation of the corporation. You make the election by filing a Form 2553.
File a Statement of InformationWithin 90 days after you form the corporation, you will need to file a SOI-200 (Statement of Information) with the Secretary of State. This discloses the officers and directors of the company.