Skip to content
Ask a question
All posts

What are the legal requirements for starting a small business in California?

Picture of Chris Battis By   ·  1 minute read

To start a small business in California, there are certain legal requirements that must be fulfilled. Here are some of the key steps:

  1. Choose a business structure: Before starting your business, you need to choose a legal structure such as sole proprietorship, partnership, limited liability company (LLC), or corporation. Each structure has its own legal and tax implications, so it's important to consult with a licensed attorney or accountant for guidance.
  2. Register your business: All businesses operating in California must be registered with the Secretary of State's office. This involves filing articles of incorporation or organization, depending on your business structure. You may also need to obtain a business license or permit from the city or county where you'll be operating.
  3. Obtain necessary permits and licenses: Depending on the nature of your business, you may need to obtain additional permits or licenses from state or local agencies. For example, restaurants must obtain a health permit, while contractors need a contractor's license.
  4. Obtain an Employer Identification Number (EIN): If you plan to hire employees, you'll need to obtain an EIN from the Internal Revenue Service (IRS).
  5. Pay taxes: All businesses in California are subject to state and federal taxes. You may need to register for state and local taxes, and obtain a seller's permit if you plan to sell goods or services that are taxable.

It's important to note that there may be additional requirements depending on the specific industry in which you're operating. For example, businesses that handle hazardous materials may need to comply with environmental regulations. It's a good idea to consult with a licensed attorney or other qualified professional to ensure that you're meeting all necessary legal requirements.

In summary, starting a small business in California involves choosing a legal structure, registering your business, obtaining necessary permits and licenses, obtaining an EIN, and paying taxes. It's important to consult with a licensed attorney or accountant for guidance, and to be aware of any additional requirements that may apply to your specific industry.