California
- Capital: Sacramento
- Largest City: Los Angeles
- State Abbreviation: CA
- Population: 40.5 million
- Sales Tax - 6%
- Income Tax - 13%
- Corporate Tax - 8,840%
California stretches along the west coast of the United States, bordering the Pacific Ocean. To the south, it borders Mexico, to which it belonged until 1848. The state encompasses two of the nation’s largest urban areas, the Greater Los Angeles Area and the San Francisco Bay Area.
Economically, California is the most significant state in the U.S., particularly due to the rise of information technology and computers, which have provided a huge boost. Around San Francisco, many major tech companies are located, including Apple, Google, Hewlett-Packard, Intel, and Facebook. Many of these multinationals have their headquarters in Santa Clara Valley, leading to the area being nicknamed ‘Silicon Valley.’
Establishing an Inc. in California
California is a state where people are keen to invest in new ideas. The government also contributes by offering various incentives if you want to establish your company in California. It is easy to find well-educated, multilingual staff. The infrastructure and accessibility are excellent, with 9 international airports and 11 major seaports. Additionally, the state’s strategic location due to its border with Mexico results in significant business with South America.
An Inc. can be compared to a PLC (Public Limited Company) and has some characteristics of a GmbH, Ltd, SARL, and AS. “Incorporated” is the official English term for a Public Limited Company.
5 Benefits
Limited Liability
Limited liability protects, in most cases, the business’s foundation and its shareholders from personal liability. For example, if the company has debts, creditors cannot claim the personal assets of directors and shareholders to cover their payments.Anonymity
In California, you aren’t required to disclose all information about the individuals involved in the company establishment. Thus, your business can be set up anonymously, usually through a company representative.Professional Image and Business Formalities
A California Corporation gives your business a more professional appearance due to the Inc. initials following your business name. The Inc. serves as the official seal from the California Division of Corporations. With an Inc., your business can easily obtain bank loans and succeed in other business transactions.Perpetual Existence
A company incorporated in California enjoys perpetual existence regardless of ownership changes. In some states, if the owner passes away, the business ceases to exist.Tax Benefits
Besides avoiding double taxation when establishing a corporation in California, you benefit from paying a lower tax amount, with additional advantages such as:– Deductibility of all startup costs. – Deductible business car and travel expenses. – Full deductions for banking, legal, or accounting services, along with business lease and rental costs. – Deductibility of overhead for daily operations and interest paid on capital loans. – Deductible wages, business insurance, advertising expenses, and sales tax linked to your business. – Family health insurance premiums are deductible. – Expenses or losses for a corporation are fully deductible, while sole proprietorships must demonstrate profit motives before deducting losses. – Deferred taxes held in a trust can be rolled into the owner’s retirement plan.
These benefits apply to corporate structures, offering multiple advantages in terms of liability protection, tax savings, and business continuity.
Inc or LLC?
Inc.
An “Incorporated” company meets all legal requirements. Universities, healthcare organizations, (semi-) governmental bodies, and municipalities typically only collaborate with “Inc’s” based in the USA. An Inc is the most commonly used business structure in the United States. One key reason for its popularity is that neither shareholders nor board members are personally liable for the company.LLC
A Limited Liability Company where the income flows from the business to the owners, but the liability remains within the company.
Establishing Your Own California Inc.
Are you convinced and ready to have us establish your California Inc.?
It ultimately comes down to tailored advice. Where does your liability lie? What permits are necessary? What are the risks of things going wrong? Can you delegate parts to export agents or business partners? Are the owners Dutch or American? And what are the pros and cons of each?
It all starts with a personal discussion at a time that suits you best.
Danielle Berden
Strategic Advisor – Los Angeles Specialist
Connecting Entrepreneurs with the Los Angeles Metropolis: Your Best Partner in the LA Ecosystem.
What Is the Best Solution for You in California?
We are happy to provide you with personal advice.
- Schedule a TEAMS video call at your convenience.
- Contact us by phone at +1 (786) 233-6384
- Or email us at: info@vanhollandgroup.com
