• Learn how to incorporate in CaliforniaCorporate building image by Christopher Dodge from Fotolia.com
  
  When developing a company or organization, some entrepreneurs want to form it as a corporation. There are various advantages to doing this, the main one being that it offers protection of personal assets in the case of a lawsuit or business debt. In California, incorporating also offers tax advantages, increased credibility for a company, stock transferring flexibility, management flexibility, and shareholder confidentiality. Incorporating can be done with the help of a lawyer or one of several online services.
  
  

Ensure Eligibilty to Incorporate

• To incorporate in California, a company must fall within the allowed parameters, and its name must be available in accord with state law. This means that if the organization is to be a corporation, "Corporation," "Incorporated," or an abbreviation of one of those words must be included in the name. If the organization will be a Limited Liability Corporation (LLC), those three words or an abbreviation of them must be in the company name. There are several restrictions on the types of businesses that can incorporate in California. The company name cannot include the following words: trust, bank, trustee, insurer, or insurance company. Other words suggesting that the company issues insurance or assumes insurance risks are not allowed. Additionally, real estate firms or contractors cannot become a California LLC. Certain types of businesses are required to be formed as a professional corporation (PC), which is a type of corporation that provides certain professional services. In California, the following types of businesses must be formed as Professional Corporations: accounting, acupuncture, architecture, clinical social work, dentistry, law, medicine, nursing, optometry, osteopathy, pharmacy, physical therapy, physician assistants, podiatry, psychology, shorthand court reporters, speech-language pathology and audiology, and marriage, family, and child counseling.
  
  

Fill Out the Paperwork

• Once the type of business and organization name are established, it is time to fill out the paperwork and file it with the California Secretary of State's Filing Division. If forming a corporation, California "Articles of Incorporation" must be filed. If forming an LLC, California "Articles of Organization" must be filed. These documents should be free of errors and submitted in the required format, and should include a cover letter, payment, and filing instructions; otherwise, it could be rejected.
  
  

Hold an Organizational Meeting

• After the paperwork has been filed, an organizational meeting should be held at which the bylaws (if a corporation) or operating agreement (if an LLC) are adopted. Several tasks should be committed to at this meeting, including opening a company bank account, paying back expenses that were incurred before the company was incorporated, and determining how much of the company each shareholder or member owns.
  
  

Finishing Up

• After this meeting, several steps remain: obtaining a Federal Employer Identification Number, opening a company bank account, obtaining a business license from the city or county, and submitting the organization's California "Statement of Information."