California Business Portal

How do you create a California S Corporation?

How do you create a California S Corporation?

Corporations or limited liability companies treated as corporations, having a valid federal S election, automatically become California S Corporations. This rule applies to all S status corporations, whether or not they are registered with the California Secretary of State.

Since the corporation becomes an S Corporation automatically for California purposes, the corporation does not file an S Corporation election, but attaches a copy of their federal confirmation letter with their first California tax return. The federal S Corporation election is binding and the corporation cannot make a separate state election as a C Corporation for California tax purposes.

If there is a federal termination of a corporation’s S election, the termination also applies to California. 

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