How to Start a Business in California

How to Start a Business in California

Want to start a business in California? The good news is it’s not as complicated as you might think. People do it every single day. As long as you go through these steps, you’ll be set up and ready to go in no time. 

Here are the basic steps to complete:

Step 1: Pick a Legal Structure

The first decision you need to make is how you want your company to be legally structured. Here are the four main structures you’ll see for small businesses:

  • Sole proprietorship
  • Partnership
  • Limited Liability Corporation (LLC)
  • Corporation

Each structure has its pros and cons, but we highly recommend making either an LLC or a corporation. The biggest advantage they have is security. Your personal assets are protected from loss in case of a lawsuit against the company. If you have a partnership or sole proprietorship, a lawsuit against the business can also come after your own personal assets.

Step 2: Pick a Name

The most important thing here is to make sure you don’t pick a name that’s already been taken – especially by a company in your industry. You can do a business name search for what you’re thinking and see if anything pops up. If not, you’re probably in the clear. If something does come up, dig a little more to see if they might be a competitor or if they are in a very different industry. 

Once you pick your name, make sure you buy the appropriate Internet domain address to go along with your growing business. 

Step 3: Create Your Business Identity and Get Permits

Now that you know your name and business structure, it’s time to register your business. If you’re a partnership or sole proprietor, you don’t need to register your business. If you go the LLC or corporation route, you’ll need to submit an Article of Organization or Article of Incorporation respectively. 

Once you’ve done that, it’s time to go more local. Register your business with your local city and county so they have a record. If your industry requires and permits or licenses to do the work, get those ASAP before you start getting too many questions about it. 

Step 4: Pick Your Location

Now it’s time to start narrowing in on your business location. Will you have a standalone building? Use a vacant space in a strip mall? Or just do everything online?

There’s no right or wrong answer. The truth is you never know if a location will do well or not. That doesn’t mean you can’t research though. In fact, it should make you want to do more research to better understand the market. 

Step 5: Set up for Taxes

Taxes are handled a little differently for each of the business structures. We recommend going through this step with an accountant who is used to working with small businesses. They’ll make sure it’s done right and you aren’t setting yourself up to lose (too much!) money. 

These are the first steps to starting a business in California. Not too bad, right? The good news is it’s relatively simple. The bad news is that it takes a lot of time and effort. We are here to help. 

Have any questions about starting a business in California? Contact us today!

Courtesy of Cuselleration