When starting a small business, there are necessary steps that must be taken in order to be legally accepted in your state. Not only does this legitimize your business, but it enables the I.R.S. and state government to tax it accordingly. The requirements vary by state, so when it is time to file for a business license in California follow these steps to ensure that the process is done correctly. While not difficult, there are a number of steps that need to be taken so if you do not have the time or feel daunted by paperwork, an independent third party company can file all paperwork on your behalf, including expediting if necessary and possible.
The process to file for a business license in California begins before logging on to the state government website. You will need to develop a business plan, detailing what your business does and includes information on your sales, how you will market, advertise and promote, as well as the location. If you are not sure where in California you want your business to be located, the state can help you out as well. Visit the California Business Investment Services unit of the Governor’s Office of Economic Development.
Next, you will need to decide your business structure. There are multiple business entity types and you must pick the one that fits your needs best. Here are your choices:
* Limited Liability Company (LLC)
* Limited Partnership (LP)
* General Partnership
* Limited Liability Partnership (LLP)
* Sole Proprietorship
Once that is decided, the next step to take to file for a business license in California is to file your tax and employer identification documents. These documents must be filed on both the state and federal level. Your business may need to register at any or all of the following places:
* Franchise Tax Board – is in charge of all corporate income, personal income and franchise taxes in California.
* California Department of Tax and Fee Administration (CDTFA) – administers over 30 tax and fee programs which generate revenue in California. This includes sales tax and use taxes.
* Employment Development Department (EDD) – is responsible for regulating a wide variety of corporate entities including franchises, securities, independent escrows, exchange commodities, investment and financial services, and various lending entities.
* California Tax Service Center – provides information and guidance to small business owners regarding income, payroll, sales and use taxes and other fees.
While the filing for a business license can be done by the individual who owns the business, it is common to hire an outside company to handle all filings need to start a business in California.