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What legal documents should I have in place before starting a business in California?

Picture of Chris Battis By   ·  1 minute read

As a lawyer, I can advise that several legal documents should be in place before starting a business in California to ensure compliance with the state’s laws and regulations, as well as protect the business owners from liability.

  1. Business License: A business license is required for all businesses operating in California. The license must be obtained from the city or county where the business is located.
  2. Articles of Incorporation or Articles of Organization (for LLCs): For businesses that plan to incorporate, Articles of Incorporation must be filed with the California Secretary of State. For LLCs, Articles of Organization must be filed. These documents establish the legal existence of the business and set forth its structure, ownership, and management.
  3. Bylaws or Operating Agreement: Bylaws govern how the corporation will operate and are typically drafted by the corporation’s founders or board of directors. An operating agreement is similar in function to bylaws but is specific to LLCs.
  4. Employer Identification Number (EIN): An EIN is a unique identifier assigned by the IRS to businesses. It is needed for tax purposes and for setting up payroll.
  5. Permits and Licenses: Depending on the type of business, additional permits or licenses may be required. For example, restaurants and bars must obtain a liquor license, while contractors must obtain a contractor’s license.
  6. Intellectual Property Protection: If the business has unique logos, trade secrets, or other intellectual property, it may need to obtain patents, trademarks, or copyrights to protect them.
  7. Contracts: Contracts are essential for any business, as they ensure that all parties are aware of their rights and obligations. Typical contracts that businesses may need include employment contracts, leasing agreements, and vendor contracts.

It is important to note that the legal requirements for starting a business in California may vary depending on the type of business and its location. Other possible legal documents that may be required include insurance policies, zoning permits, and environmental permits. For this reason, it is best to consult with an experienced business attorney when starting a new venture.