California is the third largest state in the USA and is a very attractive location for people and businesses. It offers great weather, beautiful beaches, a strong economy, and a diverse population.

Taxation in California is relatively relaxed, with Corporation Tax at just 9%, compared to 35% at federal level. Reductions and exemptions may also apply to various types of corporations formed in the US state. Credibility is also a benefit of setting up a business in California, as it creates a professional impression that will appeal to clients and increase the amount of investment, from both inside the US and from foreign countries.

California Company Law provides much more confidentiality and protection of assets than other US states or EU countries. In terms of confidentiality, details of the business such as the names of company shareholders are not available on public record. Only details of the directors and resident agents are accessible. In some cases corporations are allowed to hold company shares. Asset protection is provided for company shareholders when setting up a business in California. This protects them from personal liability of the company, with debts or legal noncompliance. This is determined by the capital investment made by the shareholder in the company.

Flexibility is also a beneficial aspect for California companies. Stock flexibility allows corporations to buy, sell, transfer, or give shares of their own stock for finances, services, or property. The stock can be in any form, i.e. liquid, property, capital, and the directors are responsible for determining its value. Flexibility in terms of management is also useful for company operations. One person may fill the three major positions of chief financial officer,  company president and secretary. Other regulations are equally simple; two shareholders requires two board members,  three shareholders requires three board members.

It is important to assess the objectives of your business and ensure that California is the best location for your business. You must then decide where in the state you want to be situated and where you want the banking facilities to be for access to your finances.

For business operations mainly within California  you should set up a local bank account and lines of credit with your chosen bank. Regulations looking into the financial and banking history of a company have become widely implemented, and companies incorporated in lower tax states are prime to be investigated. Incorporating your company in the state in which you are doing business can also be advantageous in saving on franchise fees in different states.

It may be necessary to obtain a business permit in California before your business begins operating.  You must fulfil certain criteria to make you eligible and the permit may be granted by various different agencies.