How to Form a Corporation in California

What you file in California

This page covers the state filing and the charges that follow it. For the procedural side — name availability, registered agent, bylaws and the federal EIN — see the formation guide and how to get an EIN, both of which apply to corporations as well as LLCs.

What it costs to incorporate and stay filed

State filing charges only. Corporate income tax and franchise tax are excluded — both depend on income or net worth, so no flat figure would be true for every corporation.

California is the 21st cheapest of 49 states on the incorporation filing fee alone. Nationally the fee runs from $35 in Montana to $300 in Texas, averaging $113.06. It is a one-off charge, so over five years it is usually outweighed by the recurring report fee and any annual franchise or minimum tax.

States that are cheaper to incorporate in

A cheaper filing fee elsewhere rarely saves money if you actually operate in California. Every state sets its own threshold for what counts as transacting business, and where that threshold is met an out-of-state corporation is generally required to register as a foreign corporation — which would mean fees in both states rather than one. Whether it applies to you depends on facts this page cannot see, so check foreign qualification in California before incorporating elsewhere to save on the filing fee.

California corporation vs California LLC

State filing charges only. Corporate income tax and franchise tax are excluded because both depend on income or net worth, so no flat figure exists for either entity.

An LLC is $30 cheaper to file here. That is a one-off charge, so it should not decide the entity type on its own.

Full California LLC cost breakdown · LLC vs C-corp explained · LLC vs S-corp explained

State taxes a California corporation pays

Franchise or gross-receipts tax

California imposes an $800 minimum franchise tax on every corporation incorporated, registered, or doing business in California (R&TC §23153). A C corporation pays the greater of 8.84% of net income or the $800 minimum. Newly incorporated corporations are exempt from the $800 MINIMUM in their first taxable year (first-year net income is still taxed at 8.84%). Separately, LLCs owe an $800 annual LLC tax PLUS a gross-receipts-based LLC fee (about $900 at $250,000 of California receipts up to $11,790 at $5,000,000+); the $800 LLC tax and LLC fee are administered by the Franchise Tax Board, not CDTFA or the Secretary of State.

The $800 minimum tax is deliberately left out of the filing-charge totals on this page. A minimum tax is owed to the state tax authority on a tax return, not to the business filing office — but unlike an income-based tax it is a floor, so treat it as a recurring cost of keeping the corporation alive here.

What these totals leave out: the filing-charge figures on this page are what you pay the business filing office. They exclude corporate income tax and any franchise or gross-receipts tax, because both depend on income, net worth or receipts. The section above sets out what Californialevies — or that it levies neither. Where a state's franchise tax carries a flat minimum, that minimum is an unavoidable annual cost these totals do not include, and over five years it can be the larger number.

C-corp return: Form 100 (California Corporation Franchise or Income Tax Return); Form 100W is used only by water's-edge filers

Electing S-corporation status in California

California follows the federal S election. Full California S-corporation election guide.

Where these numbers come from