Forming a Corporation
Filing Form ARTS-GS
When forming a Corporation in California, you must file Articles of Incorporation with the secretary of state; generally one will use ARTS-GS in California, which forms a General Stock Corporation with the Secretary of State.
Forming an S corporation
The phrase “forming an S corporation” is really a misnomer. To get an S corporation, one must first form a corporation, as described below, then elect S corporation status. (See my article on how to elect s-corporation status.)
Section 1: Corporate Name
The Secretary of State has several requirements and restrictions regarding corporate names. (Read my article on “Choosing a Corporate Name” for more guidance on naming your corporation.) You may also want to consult with an attorney to be sure your corporation’s name meets all the requirements.
Section 2: Corporate Purpose
You don’t need to enter anything in this section. This simply indicates that your corporation is formed to conduct business within the law, and not for nefarious purposes.
Section 3: Service of Process
You’ll need to choose a person responsible for accepting service if someone sues your corporation. This person has to be a California resident—often you can enter your own information here, or that of someone else intimately involved in running the business. If you do not live in California, do not want your name appearing on the Secretary of State website, or do not want to be the person served, you can pay an annual fee to have a company be your Agent of Process.
Section 4: Corporate Addresses
On line A of this section, enter the address at which the corporation does business. If you have mailing address different than your business address (such as a P.O. Box), enter it on line B. If not, line B can be left blank. Note that Line A can not be a P.O. Box.
Section 5: Shares
The “authorized shares” are the number of shares a corporation is able to issue. You don’t have to issue all your shares at once, however. In this section of the Form ARTS-GS, write the number of authorized shares.
I usually recommend corporations choose a very high number of authorized shares, such as 10,000,000. This way there is no need to re-file amended articles of incorporation if the organization wants to issue more shares down the road. There are other ramifications to this decision; I recommend discussing this with an attorney.
The process of Issuing shares is complicated, and should almost always be discussed with an attorney who specializes in corporate law.
Submitting the FORM-GS to the Secretary of State
Be sure to sign the bottom of the form, and it’s all set to be mailed to the Secretary of State, along with:
- a cover letter
- a check for $105 ($100 filing fee plus $5 certification fee)
Enclose a cover letter addressed to the Secretary of State, such as this one requesting that the form be filed.
Filing and Certification Fees
You must send a $100 filing fee along with your Form ARTS-GS. Upon filing, the Secretary of State will return an uncertified copy of the form to you. I recommend that my clients also request a certified copy, which costs an additional $5. You never know when you will need the certified copy and getting one after the fact can be time consuming.
Forming a Corporation can be very complicated, so I’ve created an Corporation Formation Checklist to guide you through the process. Each part of the process can have important legal ramifications, and I invite you to contact me for help with corporate formation.
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