Secretary of State California

Corporations and LLC filings are handled by the Secretary of State, Corporation Section (the "Section"), with its main office at 1500 11th Street, Sacramento, CA 95814.

The state differs from most states in that it has a hefty minimum income tax levied on any entity which will provide its owners with a limitation on their liability, specifically including corporations and limited liability companies. There is a first-year advantage for a corporation as compared to an llc, which must be weighed against the advantages of llcs generally. There is also a difference in the procedure which must be followed to expedite an initial filing.

For matters not unique to California, but common to many states, see common concerns.

California has statutes relating to the sale of corporate and llc securities (commonly referred to as the "blue sky law"). Under these statutes, prior to offering or selling corporate or llc securities, such securities must either be registered or exempt from registration under the state blue sky law. Failure to qualify under such laws has civil (and sometimes criminal) penalties.

The Section is responsible for examining, processing, filing and maintaining documents related to the existence and structure of domestic corporations and foreign entities qualified to transact business in the state.

Limited liability companies are a relatively new form of business entity. Formation and operation of such entities was authorized in 1994 through the Beverly-Killea Limited Liability Company Act. At this time professional limited liability companies are prohibited from forming or registering in the state and, since the state's definition of a professional limited liability company is broader than in most states, care must be taken to assure that the name and category of business of a limited liability company are carefully considered before submission to the Section. Since the Section has little to go on when it makes a determination as to whether or not the proposed business of the limited liability company is a "profession", and since the tendency is to interpret what it does see in a light most favorable to considering the proposed entity to be a "professional" limited liability company in order to avoid making a mistake, the wording of what it does see can be crucial.