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All of SJE's Staff Engineers are personally incorporated consultants with 15 proven years of developing Enterprise scale infrastructure software. If you're a candidate to join our team you must be also, here's what you need to do....

This information is provided as an introduction. You should consult several professionals before proceeding (we might suggest our accountant and attorney) to create a CA corporation. Read this guide and then use the links below to the California Business Portal below and research this further.

California LLC

California Corp Name Search

California Franchise Tax Board

There are many options to operating in the State of California as an independent contractor. Incorporation is not absolutely required, especially if you are consulting through an intermediary agency like San Jose Engineering.

It is certainly preferable to be incorporated, as most agencies and employers prefer the extra layer of protection afforded to them (and you!) by a 'corporate veil'.

There are fundamentally 3 types of incorporations that work well for independent contractors:

"C" Incorporation (a "standard" corporation)

"C" Incorporation sub-chapter "S" (a "services corporation)

"LLC" Limited Liability Corporation

These incorporations differ in terms of the way they are allowed to "handle" income and expenses, the way taxes are paid and the degree of anonymity provided.

Common steps to creating a California Corporation:

First come up with a name for your corporation, some attorneys we know suggest that when creating a one-person corporation (i.e., a consultant) that you place your name somewhere in the name. E.g., "the Tanya Boticelli Consulting Corp". You should come up with a name and 2 alternates.

Check that the name(s) you created are not actually in use and then you should reserve the name. This is done in one step at the California Business Portal; this involves filling-out a form and mailing it to the SOS (Secretary of State).

After you have received your name reservation confirmation you are ready to fill-out the paperwork for actually creating the company and also mail it to the SOS. This form is typically called "the Articles of Incorporation".

Common questions when creating a California Corporation:

How much does it cost to create a Corporation in California? The name reservation is 60$, the fee to file the articles of incorporation varies from 80 to 250 USD.

Why should I incorporate in California? Isn't it free to incorporate in Delaware? It is not free, though it is cheaper. Remember we are talking about filing costs, not the taxes you will pay. Having a Delaware (or any other state) corporation and doing business in California DOES NOT mean you can avoid paying California Franchise Taxes!

What is a fictitious business name and do I need one? This is a way to do business when you have an actual store-front or are advertising your wares in a county/local paper. FBN's are required by local business councils, you do not need to apply for one.

How much will it cost me to maintain my new California Corporation with respect to the Franchise Tax Board? You will typically pay the State Franchise Tax Board 800 USD / year for the luxury of doing business in California. You should also expect to pay small filling fees every year of less than 100 USD.

How much will it cost me to maintain my corporation with regards to other expenses? Naturally this varies. You should have an accountant do your taxes and help you plan the year (in advance) and guide you through making quarterly tax deposits depending on the money the company receives. You should have a dedicated checking account and possibly some financial software like QuickBooks. You will most likely need some amount of general liability insurance. We like Mid-State Mutual.