--- title: "Moving From an EOR to Your Own Entity in California" description: "How to move from an EOR to your own California entity, the franchise tax, the registration fee, and the migration process, explained by Teamed." canonical: https://www.teamed.global/country-hiring-guides/united-states/california/moving-from-eor-to-your-own-entity --- ![California business district.](/cluster-assets/country-hiring-guides/united-states/california/moving-from-eor-to-your-own-entity/images/hero.webp) # How do you move from an EORto your own entity in California. Teamed incorporates your California entity, migrates employees off the EOR agreement, and hands you a fully operational, compliant company. Served by Teamed US Inc., Delaware · Payroll via SUNA Solutions Last reviewed 22 September 2026 · California guide At a glance ## California entity setup, the numbers that matter California charges a flat minimum franchise tax of $800 on corporations doing business in the state, regardless of profit. The California Secretary of State also charges a registration fee of $70 to form the entity. Everything else on this page builds around those two fixed costs. Minimum franchise tax$800 Franchise tax basisflat Formation / registration fee$70 Why founders make the switch ## Why companies outgrow an EOR in California An EOR is a fast, low-risk way to hire in California without registering a business there. It works well for a first hire or a small pilot team, because someone else carries the compliance weight of California's dense employment rules. Once your California team grows, or you want to offer equity, design your own benefits, or put your own brand on the paycheck, an entity gives you that control directly. The decision is rarely about saving money on any single hire, it is about ownership of the employment relationship as headcount and ambition grow. The cost side ## What it costs to run a California entity California treats the minimum franchise tax as a flat charge of $800, owed every year an entity is registered to do business there, independent of whether it turned a profit. That is a standing cost of holding a California entity open, not a one-time setup fee. On top of that, the California Secretary of State charges $70 to register the entity itself. Beyond these two figures, California layers on other ongoing compliance obligations, payroll tax registration, workers' compensation, and annual filings, that a company should budget for as operating costs rather than one-off fees. How the move happens ## How Teamed migrates you from EOR to entity Teamed forms the California entity, registers it with the Secretary of State, and handles the state and federal tax registrations that let it run payroll directly. Employees move from the EOR agreement to direct employment contracts under your new entity, with continuity of pay, role, and benefits managed through the transition. You do not run this migration alone or start from a blank page. Teamed sets the entity up, keeps it compliant while it is in our care, and hands it to you fully operational, with the California-specific obligations, franchise tax, registration, and payroll tax accounts, already in place. Timing ## When to make the move in California There is no fixed headcount at which an entity becomes the right answer. It depends on salaries, how long you intend to keep a team in California, and how much control over benefits and equity you actually need right now. Rather than guess, run the numbers through the crossover calculator, which weighs your specific salary levels and timeline against California's fixed costs, the franchise tax and the registration fee, to show where the balance actually tips. Before you commit ## Sometimes an employer of record is the better fit An employer of record is sometimes the better answer for California, not a lesser one. If your team there is small, still changing shape, or you are testing whether California is even the right market, staying on an EOR keeps you flexible and avoids taking on a standing entity with its own annual franchise tax. Talk to a member of the team before you commit either way, or run the crossover calculator to see where the math actually lands. Contractors, employer of record and your own entity all run on one platform at Teamed, so moving between them later does not mean changing provider or re-onboarding anybody. Real HR and legal experts handle the work rather than a ticket queue. Talk to a member of the team and we will tell you plainly which one suits where you are. If you would rather look at the numbers yourself first, the crossover calculator models it on local salaries and employer costs rather than on a headcount rule of thumb. Talk to a member of the team Model the crossover for the United States Who carries it ## Your own entity, when it's time. We set it up, migrate you in, and hand it back intact. Global Entity and Employment Operations, which we call GEMO, is how Teamed forms your company, registers it for tax and payroll, runs it month to month and keeps its filings current, across 100+ countries. You stay the employer. We do the work behind it. In California, that means we handle the Secretary of State registration, the franchise tax setup, and the payroll and employment tax accounts a California entity needs before it can run its own headcount directly. You get an entity that is already compliant with California's specific obligations, not a shell you have to finish setting up yourself. Entity Management (GEMO) The Graduation Model Employer cost calculator > They set up our EU entity and moved hires across without missing a payroll. *Helene Dubois, COO* Talk to an expert about California Questions ## Questions about moving off an EOR in California How much does it cost to register a company in California? The California Secretary of State charges $70 to register a business entity. That is separate from the state's annual minimum franchise tax, which applies once the entity is operating. Do we owe the $800 franchise tax even if the California entity isn't profitable yet? Yes. California's minimum franchise tax is a flat $800 charge, and it applies regardless of income, according to the California Franchise Tax Board's guidance for corporations starting business in the state. When should we move from an EOR to our own California entity? It depends on your salary levels and how long you plan to keep people in California, not on a fixed headcount. The crossover calculator weighs those factors against California's fixed entity costs to show where the switch starts to make sense. What happens to our employees during the move from EOR to entity? Employees transition from the EOR's contracts to direct contracts with your new California entity, with continuity of pay and role managed through the process. Teamed coordinates the handover so there is no gap in employment or benefits. Can Teamed set up the California entity for us? Yes, through GEMO, Teamed's Global Entity and Employment Operations service. We form the entity, handle the California-specific registrations, and hand it back to you fully operational. Where these figures come from ## Sources Figures on this page come from the California Franchise Tax Board's Publication 1060 guide for corporations starting business, and from the California Secretary of State's business entity forms and fees. ## More on entities in California - [Hiring in California, overview](/country-hiring-guides/united-states/california)parent - [California setting up](/country-hiring-guides/united-states/california/entity-setup)sibling - [California running costs](/country-hiring-guides/united-states/california/entity-running-costs-and-filings)sibling - [California tax presence](/country-hiring-guides/united-states/california/permanent-establishment-risk)sibling - [California entity or eor](/country-hiring-guides/united-states/california/eor-vs-entity)sibling - [Set up an entity, by country](/entity-setup-by-country)hub - [Entity Management (GEMO)](/entity-management)core - [Talk to an expert about California](https://www.teamed.global/contact?from=moving-from-eor-to-your-own-entity)CTA