Saving Money When Forming a California Corporation

Need to cut your start-up costs to the bone?that meet your requirements and those of the
Planning to operate a new venture as astate.
corporation? You'll want to consider threeHowever, if you won't have outside investors and
techniques to reduce the expense of incorporatingyou're operating on a tight budget, you might
in California.want to look at the option of just using a
Money Saving Idea #1: Use the Secretary ofboilerplate, or standard, set of corporate by-laws.
State's Pre-printed FormsYou can buy simple, workable by-laws off of
Here's a first, easy to consider idea: Why not usewebsites (not surprisingly). And you can also
the preprinted forms that the Secretary of Stateoften, er, copy a friend's by-laws.
supplies at its website to create your articles ofTip: Be sure your friend's corporate by-laws were
incorporation? Unfortunately, the precise webwritten originally for a California corporation.
address changes, but if you use a search engineNot every entrepreneur or business owner will
like Google, Yahoo or Bing to search on thewant to cut corners when it comes to the
phrase, " California Secretary of State Debraby-laws, but cutting corners in this area does
Bowen," the first or second result should be theproduce substantial cost savings. Typically, one
official Secretary of State web site, whichpays several hundred dollars an hour for a
provides downloadable, printed forms you can usetop-notch corporate attorney.
for forming a corporation in California.Money Saving Idea #3: Hire Yourself as the Agent
Tip: The pre-printed forms supplied by the statefor Service of Process
are very easy to understand. Mostly what you doOne last money-saving tip: Why not be your own
is "fill in the blanks." If you do find yourself able toregistered agent--the person the state contacts if
prepare the form, you'll save yourself fromit has official business it needs to conduct with
paying a paralegal service, attorney or accountantyour corporation? The only requirement is that
hundreds of dollars.the person you appoint needs to actually reside in
Once California accepts and certifies your articlesCalifornia and you need to be able to provide a
of incorporation, the corporation exists. But noteCalifornia street address.
that the processing time is often slow--in summerThis makes sense, right? Why fork over $100 to
of of 2010, for example, the state took about 60$200 a year to some paralegal or law firm for
days to turnaround incorporation articles. Ugh.acting as your own agent. (All the agent does is
Money Saving Idea #2: Recycle Standardforward mail and other legal documents on to
Corporate By-lawsyou.)
Like almost every other state, California requiresNote: The California SI-200 C form you use to
corporations to work from a set of by-laws thatappoint your registered agent calls your agent an
specify how the entity governs itself. The"Agent for Service of Process." Note that if
by-laws, for example, describe the rules foryou've in the past used a paid registered agent,
electing directors and officers and for holdingyou can also use this form to change the agent
corporation meetings.for the current and future years.
If you're working with a big budget or you haveLooking to form a corporation in California? Want
outside investors, you of course should recruit ato save costs? Consider three easy-to-implement
local attorney (or at least an attorney fluent inmoney-saving ideas from Golden Gate University
state corporation law) to draft corporate by-lawsadjunct tax professor Stephen L. Nelson.