What you need to know – we must admit, we have started/incorporated X number of entities in California over the years but even we got confused recently when looking at the California Secretary of State’s website. They have seven different forms for filing Articles of Incorporation! They are:
General Stock (From ARTS-GS), Closed (ARTS-CL), Professional (ARTS-PC), Nonprofit Mutual Benefit (Form ARTS-MU), Nonprofit Public Benefit (ARTS-PB-501c(3), Nonprofit Religious (Form ARTS-RE), and Common Interest Development (Form ARTS-CID)
This alone can be confusing. So we figured we would discuss the subject in more detail and provide specific instructions for people looking to start a medical marijuana dispensary (or various related activity) in California. You can use their template (fill-in PDF) or create your own from scratch. Both will lead to the same result – a new California entity! Almost anyone can sign/serve as the incorporator (for the most part) it is not required that the incorporator be an officer or even a future member of the organization (but it can be and is usually the case).
As you probably realize, there is more than one “right way” to organize your medical marijuana dispensary (delivery or grow). Individual lawyers throughout CA might prefer or advise different methods. The gold standard has been the “Mutual Benefit Corporation” technically, a not-for-profit model, but you don’t seek non-profit status. As such you will owe $800 minimum franchise tax fee annually to CA Franchise Tax Board. Also, if the Corporation is profitable you will pay tax. Please note that this standard will be changing the with the Medical Marijuana Regulation and Safety Act (MMRSA AB 243, AB 266, and SB 643), currently in the pipeline, and traditional for-profit entities will be allowed. We will do our best to keep you posted of technical requirements as they arise. Until then…
We currently us Articles of Incorporation of a Nonprofit Mutual Benefit Corporation [ARTS-MU] and pay $30 filing fee. You should get your formal stamped incorporation document back in 2 weeks or so but you can check processing times on their website at http://www.sos.ca.gov/business-programs/business-entities/processing-times/ That is the main document you will need to start your operations in California.
ARTICLES OF INCORPORATION
OF
SAMPLE COLLECTIVE
NAME
The name of this corporation is: Sample Collective.
PURPOSES
This corporation is a nonprofit mutual benefit corporation organized under the Nonprofit Mutual Benefit Corporation Law. The purpose of this corporation is to engage in any lawful act or activity, other than credit union business, for which a corporation organized may be organized under such law. The specific purpose of this corporation is to “__________”.
{we feel it t is best to leave this statement open to interpretation. i.e. provide safe access to natural medicine, or produce medicine for patient members, etc.}
POWERS
This corporation shall have all the powers of a natural person, subject only to any limitations imposed by these articles of incorporation, the bylaws of this corporation and applicable law. Notwithstanding any of the above statements of purposes and powers, this corporation shall not, except to an insubstantial degree, engage in any activities or exercise any powers that are not in furtherance of the specific purpose of this corporation.
Initial Agent for Service of Process
The name and address in the State of California of this corporation’s initial agent for service of process is:
NAME
ADDRESS
CITY, CA 93000
ARTICLE I.
Notwithstanding any of the above statements of purpose and powers, this corporation shall not, except to an insubstantial degree, engage in any activity or exercise any powers that are not in furtherance of the specific purpose of this corporation.
Dated:_____________ _________________________________
{NAME}, Incorporator
That’s it – relatively simple but the CA SOS website isn’t the most user-friendly. We hope you found this information useful and we wish you the best of luck with your future ventures.
We provide consulting services to people that like more hand holding and have partnerships with a number of consultants who specialize in obtaining medical marijuana licenses/permits and can help your achieve your goals. Please email or call if you are interested.
We provide consulting services to people that like more hand holding and have partnerships with a number of consultants who specialize in obtaining medical marijuana licenses/permits and can help your achieve your goals. Please email or call if you are interested.