how do I become a close corporation?

[fdorsey]

In california.

I already send my articles to the state and I am getting ready to open a bank account. I was told I need the first minutes and I am preparing them now. I was reading that a close corporation allows you to go without having to do all the yearly meeting and formalities. I like that since I am very small. Do I have to inlcude something in my first minutes to elect beign a close corporation?

 

[loku]

Cal Close corp

It sounds like a good idea to go "close corporation," but the formalities you will avoid are probably less bothersome than forming the close corporation. If the first place, there are name restrictions, the articles must be amended, you must draw up a complicated shareholder's agreement to run the company by, and there are requirements as to the wording of the stock certficates. Probably less than 2% of the corporations in Cal are Close corps.

The better alternative is to become a Limited Liability Company. It gives the same protection as a corporation and offers more informality than a close corp or any other corp. If you do not want to do that, then keep your corporation as it is and apply for S corp status with the IRS.