How to Setup Directors in an S Corp in California

By Mark Kennan

An S corporation, similar in many ways to a standard C corporation, elects to be taxed as a pass-through entity by the Internal Revenue Service rather than to pay corporate income tax. When you file articles of incorporation in California, you must also file Form 2553 with the IRS to confirm the S corp election. Corporate statutes, in the state where a business is formed, govern S corporation management. As such, California corporate law sets forth the rules for setting up a board of directors.

Step 1

File articles of incorporation with the California Secretary of State. List the initial board of directors on the articles of incorporation. If you prefer to elect a board of directors at the first meeting, list the company's founders instead. The founders -- referred to as incorporators in California law -- may serve as the directors until a full meeting of the shareholders takes place. Their responsibilities will include running the initial election of the directors.

Step 2

Call a meeting of the shareholders. California law states that shareholders must receive notice of the meeting at least 10 days in advance.

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Step 3

Vote on the candidates nominated for each position on the board of directors. Adopt bylaws that specify term limits and the process for electing board members. These provisions also can include board member qualifications.

Step 4

Record the annual meeting's minutes and file them in the corporation's records to document the election of the board.

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References

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