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Did you know that Justia offers numerous free resources to make the law more accessible and help people better understand the foundations of a variety of legal areas? In this post, you can learn more about the information available in Justia’s Portal, including its guides for incorporating a business.
Among the many free resources that Justia provides to the public are Justia Legal Guides on dozens of diverse practice areas. In a series of posts, we will continue to explain how someone coming to our site might use each of these guides to understand their rights and options, as well as what to expect from the legal process.
This post outlines a hypothetical scenario involving “Maria,” a furniture builder and seller who would like to incorporate her business in California. Maria searches for information about this topic online and finds Justia’s Small Business Center and the discussion of how to incorporate a business in California, which is one of several state-specific guides on this topic provided by Justia.
First Steps in Business Formation
Maria has always loved woodworking and started to post her creations on social media, where she gained a strong following. Along the way, she has also made friends and connections with other woodworkers and people in the business of furniture sales and distribution. They have given her the confidence to start her own business and have even offered to work with her and invest. However, Maria is unfamiliar with the process of incorporating and turns to Justia’s First Steps in Business Formation page for more information.
Maria learns that most people start by developing a business plan to determine how the potential new business will operate, how much money it will need to get started, and where it will be located. Maria lives in California, so she would like her business to be located in California as well. She also knows that a portion of the initial capital that she will need to start the business will come from her connections. Maria would like to incorporate her business because this will limit her personal liability, allow her to issue stock, and give some of her most trustworthy friends and connections the ability to serve as directors. On the First Steps in Business Formation page, she finds a box with a link to Justia’s Consumer & Business Legal Forms page. This provides a list of business forms resources, including How to Incorporate a Business in California.
Maria has heard that some business founders strategically choose to incorporate in Delaware or Nevada, rather than their home state. While she is not sure whether this option would be right for her, she notes that Justia offers guides for incorporating a business in Delaware and incorporating a business in Nevada as well.
How to Incorporate a Business in California
Maria next reads about the steps to incorporate in California. She finds it especially helpful that clicking on a step in the list brings her straight to the description of that step on the page. Maria finds that the first step of incorporating a business in California is choosing a name. Along with California’s naming requirements and information about reserving a name, she finds links to the relevant section of the California Corporations Code, a California Secretary of State guide to business name regulations, California’s Business Search tool, and California’s name reservations page.
She also learns about choosing a registered agent, choosing a share structure, and executing articles of incorporation. In addition to a description of the information that should be included in articles of incorporation in California, Maria finds links to file articles of incorporation online or to print and file California’s standard form by mail or in person. She also finds an informational box listing the fees associated with filing and the addresses for filing by mail or in person.
Maria continues to read about holding an organizational meeting, choosing initial directors, executing an incorporator’s statement, and preparing corporate bylaws. Maria is happy to find that the section on issuing stock talks about both federal and state laws that may be implicated and links to useful forms and resources on the topic, such as SEC resources on exemptions, the relevant section of the California Corporations Code, and California’s exemption requirements.
Finally, Maria reviews the sections on filing a statement of information and complying with California tax and regulatory requirements. She is again pleased to see that in addition to outlining those requirements, the text links to many helpful resources, such as the application to obtain an employer identification number from the IRS and federal and state resources on taxes, registration, permits, and licenses.
Maria also sees that Justia has pages on trademark, copyright, and patent forms. Maria takes a closer look at the resource on trademark forms and learns that she may be able to trademark a word, symbol, or design associated with her business so that she can establish her brand.
She finds that trademarks can be registered on both the state and federal levels and that Justia has resources for applying for both. For California in particular, she learns that she may register a trademark for five-year increments for a registration fee of $70. She also finds a link to the California Secretary of State’s web page on trademark forms and fees, so she makes a mental note to return to Justia when she is ready to register a trademark.
Maria now has a basic understanding of the general steps that she will need to follow to incorporate her business in California. While Maria may find it helpful to consult a business lawyer to ensure that the incorporation process is tailored to her specific business, she feels more prepared and confident. Justia’s Small Business Center and state-specific guides on incorporating a business aim to make the law transparent and accessible to all.