New California Corporation Types

When filing for incorporation, it is important that the type of corporation accurately describes your business. If your operations pursue the objectives of both For-Profit and Non-Profit organizations, you can now file as a Flexible Purpose Corporation or a Benefit Corporation. On January 1, 2012, California created these two new corporation subtypes for businesses that pursue both economic and social objectives, not completely fitting into the For-Profit or Non-Profit organization categories. To form a corporation under either subtype, a free-form Articles of Incorporation must be drafted and included with the $100 filing fee.

There are certain requirements for the free-form Articles of Incorporation under all corporation types. Those filing a Flexible Purpose Corporation must include one of the purpose statements required by California Corporations Code, and a statement that a purpose of the Flexible Purpose Corporation is to engage in one or more of these purposes. The Articles of Incorporations for a Benefit Corporation must include the statement: "This corporation is a benefit corporation", and one or more of the purpose statements required by the California Corporations Code may be identified as the purpose statement in the Articles of Incorporation.

These are just the basics of corporation filing requirements, and there are a lot of other things to consider when choosing your corporation subtype. Accurately categorizing your business and having a well written Articles of Incorporation will provide a solid foundation for your business practices. At MA Law we understand that every organization operates with different values and objectives, so we take the time to understand your business, enabling us to set up the right kind of entity for you. The corporation filing process can be confusing, but we can help make the process easier for you. If you have any questions about filing for corporation, contact our office for a consultation.

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