Just Incorporated? If you haven’t already done so, you will need to open a bank account. Bring the Articles of Incorporation and the Federal ID number document, which can all be found in your corporate binder.
The first year of your corporation, in some cases, you will not need to pay the minimum franchise fee to the State of California in the amount of $800, unless your business made profit. If there was a profit, the franchise tax fee is 1.5% of the profit. In the second year and every year after, the minimum fee is $800 or 1.5% of your profit, above $53,000, even if your business loses money or has no activity. Corporate Taxes are filed separately from your individual taxes. The corporate tax deadline is March 15th, annually, which is one month before your individual taxes are due. If you are not ready to file by March 15th, please contact our office and request a corporate extension, valid for 6 months. The franchise fee is still due by the March 15th deadline. The failure to file penalty is $195 per month, per shareholder.
Please be aware that there is a very important postcard you will receive in the mail, at the address where your business was registered. The postcard is a reminder to file the Statement of Information (SI- 200) online. You will receive this reminder postcard annually. You will be required to submit the Statement of Information on-line at www.sos.ca.gov/business and pay a $25 fee. The SI-200 is a way for the State of CA to remain updated on the location of your business. After logging onto the website, click the box that indicates “no change” and submit a payment of $25.00. Please note, that if you have moved, you must go on-line and complete the form with the new address yourself. If this document is not completed every year, eventually your corporation will be suspended and the fines will accrue up to $1500.
Another requirement to ensure that your corporation is legal is to keep your annual corporate minutes up-to-date. For a nominal fee of $75, our office would be happy to keep your corporation documents legal and up-to-date. If you choose to use our services for corporate documents, please bring your corporate binder to your tax appointment. Corporate minutes can be backdated for corporate books that have not been kept up to date. Please be aware that you will be receiving official looking solicitations for the completion of your corporate minutes from companies not affiliated with the State of CA, with various inflated fees up to $250. Please contact our office to ensure the validity of these mailings.
For your first tax appointment please bring the following items:
Your corporate book
Profit and Loss Statement including your income and a list of totaled, itemized expenses.