Form the Corporation
File Articles of Incorporation with the California Secretary of State and appoint an agent for service of process.
C-Corporation Services for California Contractors
Why Choose a C-Corporation for Your Contracting Business?
Build a corporation with flexible ownership options, room for long-term growth, and a legal structure designed to help separate business liabilities from personal assets.
Built for long-term growth
What Is a C-Corporation?
A C-Corporation, or C-Corp, is the standard federal tax treatment for a corporation unless the business makes a valid election to be taxed as an S-Corporation. It is commonly considered by businesses that want flexible ownership options, the ability to authorize multiple classes of stock, or room to bring on investors.
A C-Corporation generally pays federal income tax on its taxable profits. When after-tax profits are distributed to shareholders as dividends, shareholders may also owe income tax on those dividends. This is commonly called double taxation.
Unlike an S-Corporation, a C-Corporation is not subject to the S-election rules that limit the number and types of shareholders or permit only one class of stock. This flexibility can be useful for contractors who plan to reinvest profits, add owners, or seek outside investment.
To form a California corporation, the business files Articles of Incorporation with the California Secretary of State, appoints an agent for service of process, obtains an EIN, and completes its organizational and ongoing filing requirements. When corporate formalities are properly maintained, the corporation generally helps separate shareholders’ personal assets from ordinary business liabilities.
C-Corporation describes how the corporation is taxed.
A California corporation is generally taxed as a C-Corporation unless it qualifies for and makes another federal tax election.
How it works
Forming a California C-Corporation
These are the primary steps for creating and organizing a California corporation under standard C-Corporation tax treatment.
Complete Organization
Adopt bylaws, appoint directors and officers, issue authorized shares, and create the initial corporate records.
Obtain an EIN
Apply for the corporation’s Employer Identification Number for federal tax, payroll, and banking purposes.
Maintain Compliance
File required statements and tax returns, keep accurate records, and observe corporate formalities.
Flexibility and protection
C-Corp for Contractors: When to Choose It
C-Corporation setup support for California contractors who value ownership flexibility, continuity, and long-term growth.
Liability Protection
A properly maintained corporation generally helps separate shareholders’ personal assets from ordinary business debts and liabilities.
Unlimited Shareholders
C-Corporations are not subject to the federal S-election limit of 100 shareholders, which can make ownership expansion easier.
Multiple Classes of Stock
The Articles can authorize multiple classes or series of stock, providing flexibility in ownership and investment rights.
Business Credibility
Operating as an incorporated business can strengthen your professional presentation with clients, lenders, vendors, and partners.
Business Continuity
The corporation can continue to exist when ownership changes, including when shares are properly sold or transferred.
Investment Flexibility
Flexible ownership and stock options can support plans to reinvest profits, add strategic owners, or raise capital.
Know the tradeoffs
Advantages and Disadvantages of a C-Corporation
Potential Advantages
-
Personal liability separation
A properly maintained corporation generally separates shareholder assets from ordinary business obligations.
-
Flexible shareholder base
The federal S-Corporation restrictions on shareholder count and eligible owner types do not apply.
-
Flexible stock structure
Multiple authorized stock classes can provide different economic or voting rights when properly structured.
-
Continuity and credibility
A formal corporate structure can support ownership changes, growth, and a professional business presence.
Potential Disadvantages
-
Potential double taxation
The corporation generally pays tax on taxable income, and shareholders may also owe tax on dividends they receive.
-
Additional complexity and costs
Formation, tax preparation, recordkeeping, and ongoing compliance usually cost more than operating as a sole proprietorship.
-
Corporate formalities
The business must maintain records, follow corporate procedures, and keep business and personal finances separate.
-
California taxes and filings
California corporations generally file Form 100 and are subject to state corporation tax and applicable minimum franchise-tax requirements.
Get incorporated
Corporation Service Packages
Choose the level of corporation formation assistance that best fits your business needs.
Economy Package
$297- File Articles of Incorporation
- Corporation Name Setup
- Corporation Number Setup
- Secretary of State Filing Fee
- Turnaround Time: 1–3 Business Days
Standard Package
$497- File Articles of Incorporation
- Corporation Name Setup
- Corporation Number Setup
- Secretary of State Filing Fee
- Statement of Information Filing
- Statement of Information Filing Fee
- Obtain Employer Identification Number (EIN)
- Turnaround Time: 1–3 Business Days
Complete Package
$597- File Articles of Incorporation
- Corporation Name Setup
- Corporation Number Setup
- Secretary of State Filing Fee
- Statement of Information Filing
- Statement of Information Filing Fee
- Obtain Employer Identification Number (EIN)
-
Corporate Kit
- Stock Certificates
- Corporate Bylaws
- Corporate Minutes
- Founder’s Stock Purchase Agreement
- Shareholder Agreements
- Turnaround Time: 1–3 Business Days
Processing times are estimates and may vary based on state processing times, name availability, filing requirements, and the timely receipt of complete and accurate customer information. Confirm current package inclusions and government fees before publishing.
Frequently asked questions
FAQ: C-Corporations
What are the requirements to form a C-Corporation in California?
A California corporation generally needs to:
- Choose an available corporation name and file Articles of Incorporation with the California Secretary of State.
- Authorize the corporation’s shares and identify an agent for service of process.
- Adopt bylaws, appoint directors and officers, issue shares, and maintain organizational records.
- Obtain an Employer Identification Number from the IRS.
- File the required California Statement of Information and applicable federal, state, and local tax filings.
Most lawful business activities can be conducted through a C-Corporation, but licensing, securities, tax, and industry-specific rules may also apply.
Can I form a C-Corporation if I am the only owner?
Yes. A California corporation may have one shareholder, and a one-shareholder corporation may have one director. The same person may also hold multiple required officer positions unless the Articles or Bylaws provide otherwise. The corporation must still maintain records and observe corporate formalities.
Do I need to own a certain percentage of a C-Corporation?
There is no general minimum ownership percentage required to be a C-Corporation shareholder. A shareholder’s ownership percentage depends on the shares properly issued and outstanding. The corporation’s Articles, Bylaws, stock terms, and shareholder agreements may affect voting, economic, and transfer rights.
Can I form a C-Corporation if I have an ITIN?
Having an ITIN instead of a Social Security number does not by itself prevent a person from forming or owning a C-Corporation. The corporation must obtain its own EIN. Foreign ownership can create additional federal tax, withholding, information-reporting, immigration, or banking requirements, so professional guidance is recommended.
What titles do I need to hold in a California corporation?
A California corporation must generally have a chairperson of the board or president (or both), a secretary, and a chief financial officer. One person may hold multiple offices unless the corporation’s Articles or Bylaws provide otherwise. Shareholder, director, officer, and employee are separate roles, even when one person fills several of them.
How will I be taxed as a C-Corporation?
The corporation generally files its own federal income-tax return on Form 1120 and pays federal income tax on taxable profits. California C-Corporations generally file Form 100 and pay California corporation tax and any applicable minimum franchise tax. Shareholders may also owe tax when the corporation distributes after-tax earnings as dividends. Wages paid to shareholder-employees are subject to payroll and income-tax rules.
What is the main difference between a C-Corporation and an S-Corporation?
A C-Corporation generally pays tax at the corporate level, and shareholders may also be taxed on dividends. An eligible S-Corporation generally passes income and losses through to shareholders for federal income-tax purposes. S-Corporations also face restrictions on eligible shareholders, shareholder count, and stock classes that do not apply to standard C-Corporation tax treatment.
Do I need a California address to form a C-Corporation?
You do not generally need to be a California resident to own a California corporation. The corporation must provide the addresses required on its filings and designate an agent for service of process. If the agent is an individual, the agent must have a physical California street address. A qualified California registered corporate agent may be used instead.
Ready to move forward?
Form Your C-Corporation with Lexana Signature
Get professional assistance with the steps needed to form and organize your California corporation.
Important: This page provides general educational information and is not legal, tax, accounting, investment, or securities advice. Liability protection and tax outcomes are not guaranteed and depend on the corporation’s facts, formalities, and applicable law. Consult a licensed attorney or tax professional regarding your specific business. Government rules, fees, tax rates, and filing requirements may change.