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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 several legal requirements that must be followed.

  1. Choose a Business Structure: Before starting a business, you must choose a business structure. In California, common business structures include sole proprietorships, partnerships, limited liability companies (LLCs), and corporations. Each structure has its own advantages and disadvantages, so it is essential to research and understand each one before choosing the best option for your business.
  2. Register Your Business: After deciding on a business structure, you need to register your business with the California Secretary of State's office. Different business structures require different registration forms and fees.
  3. Obtain Licenses and Permits: Depending on the type of business, you may need to obtain various licenses and permits to operate legally in California. Some businesses may require industry-specific licenses or permits, such as a contractor's license or a liquor license.
  4. Register for Taxes: All businesses in California must register with the California Department of Tax and Fee Administration (CDTFA) to obtain a seller's permit. If your business has employees, you will also need to register with the Employment Development Department (EDD) and obtain an employer identification number (EIN).
  5. Comply with Employment Laws: If you plan to hire employees, you must comply with California's employment laws. This includes providing workers' compensation insurance, complying with minimum wage requirements, and providing proper meal and rest breaks.
  6. Protect Your Business: To protect your business, you should consider obtaining insurance, such as general liability insurance or professional liability insurance. Additionally, you may want to consider securing intellectual property protection through trademarks or patents.

It is important to note that these are general requirements for starting a small business in California, and there may be additional requirements depending on the specific industry or location of the business. It is always best to consult with a licensed attorney or business advisor to ensure that your business complies with all applicable laws and regulations.