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What are the main steps I need to take before starting a business in California?

Picture of Chris Battis By   ·  1 minute read

As a lawyer, I would advise individuals who are looking to start a business in California to take the following steps:

  1. Choose a Business Entity: The first step is to choose a business entity such as a Sole Proprietorship, Partnership, Corporation, S Corporation, or Limited Liability Company (LLC). Each of these entities comes with its own benefits and drawbacks, and it is important to choose the one that best suits the individual circumstances of the business.
  2. Register the Business: Once a business entity has been chosen, it is important to register the business with the California Secretary of State. This can typically be done online, and it involves providing basic information about the business as well as paying the necessary fees.
  3. Obtain Business Licenses and Permits: Depending on the type of business that is being operated, it may be necessary to obtain specific licenses or permits from California state or local authorities. For example, businesses in certain industries such as food service or construction will typically require specific permits or licenses.
  4. Get an EIN: An Employer Identification Number (EIN) is a unique identification number that is assigned to a business by the Internal Revenue Service (IRS) for tax purposes. It is important to obtain an EIN as it may be required for a variety of business-related activities, such as opening a bank account or hiring employees.
  5. Understand Tax Obligations: Finally, it is important to understand the tax obligations associated with running a business in California. This includes understanding California's income tax laws, as well as any specific taxes that may be applicable to the particular type of business that is being operated. It is important to consult with a tax professional to ensure that all tax obligations are being properly met.

While these are the main steps that must be taken when starting a business in California, it is important to note that there may be additional steps or requirements depending on the specific circumstances of the business. Additionally, it is important to consult with an experienced attorney who can provide legal advice specific to the individual's circumstances.