New California Corporation Questions
How
do I incorporate in California?
Incorporation in California is done
through our Office. A
Corporation OR
LLC filing
is recommended to
reduce
taxes, obtain
corporate
credit, protect assets, and eliminate
personal legal, civil and financial liability.
Is my
California
corporation subject to tax or income tax?
Your
California
corporation is subject to the
minimum franchise tax and any
corporation 'doing business' in
California is subject to the minimum
franchise tax. For example if your corporation only
maintains inventory in California,
your corporation would be subject to
corporate income tax. Unincorporated
business entities are also subject to
corporation income tax.
Is an S
California
corporation subject to the
minimum state tax?ise
tax?
Yes, S
California
corporations are subject to the
minimum state tax. The current minimum tax is
$800
for the first income year, measured
for the second income year, and $800
for subsequent years.
What forms
do S corporations file?
-
To elect or terminate S
California
corporation status, form FTB
3560, S Corporation Election or
Termination/Revocation
-
To report franchise or income
tax, Form 100S, California S
Corporation Franchise or Income
Tax Return
-
To report shareholder's share of
income and deductions, Form
100S, Schedule K-1
-
To report list of shareholders,
form FTB 3830, S
Corporation's List of
Shareholders and Consents
How do I
get tax-exempt status?
You must file an Exemption
Application, and receive exempt
status notification from the
State Tax Board.
All
California
corporations and unincorporated
even if organized on a nonprofit
basis, are subject to California income tax.
A grant of federal exemption does
not automatically exempt you from
California tax. FTB 3500 should be
submitted 90 days prior to the date
your exempt status is needed.
I
have exempt status. Do I need to
file
California
Form 100 or Form 109 in
addition to Form 199?
Every
California
organization exempt must file Form 109 if
the gross income from an unrelated
trade or business exceeds $1,000.
My
California
corporation is not doing business;
does it have to pay the minimum
franchise tax?
Yes, if your
corporation is incorporated in or is
qualified to do business in
California, it must file a return
and pay the minimum tax.
How do I dissolve my corporation?
File dissolution documents with the
Secretary of State.
Also
obtain a Tax Clearance Certificate
by filing form FTB 3555, Request for
Tax Clearance
Certificate-Corporation.
FTB 1149 Explains the entire
dissolution process and includes the
required filing documents.
reduce the chances for personal liability
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