Virtually every business will need at least one type of license or permit to legally operate in the state of California. Unfortunately, knowing exactly what license you may need to operate in your region and in your specific industry can be a headache. Depending on the type of business you operate, you may need to obtain local, county, state, or federal business licenses. Fortunately, California makes it a little easier through the CalGold website, a tool that allows you to search by city or county and type of business to see what permits you will need and which regulatory agencies administer them.
When starting a business in California, the first thing you'll need to do (after thinking about your business idea) is to choose a name for your business and decide on the structure of your business. Once you have decided on the name and structure of your company, the next step in starting a company in California is to write a business plan. Just like drawing up plans before building a home, a business plan creates the solid foundation on which you'll build and grow your business. Starting a business in California also means paying taxes for that business.
There are several agencies responsible for administering taxes at the state and federal levels, as well as state agencies and programs that help you navigate the small business taxes you must pay, such as the Franchise Tax Board, the California Tax Services Center, and the Department of Taxation of California and Rate Management. While the Secretary of State handles many business-related forms and filings, business licenses and permits are not at the helm of the department. To get the necessary licenses or permits you'll need when starting a business in California, the CalGold website, hosted by the California Governor's Office of Economic and Business Development, is your go-to resource. While this site itself does not issue permits or licenses, it lists the appropriate agencies you will need to contact.
First, select your city or county and type of business. With your business legally ready to open its doors, there is still a question of whether you are financially prepared. Starting a business in California isn't cheap, especially depending on the type of business you want to open. Whether you're looking for a startup loan, equipment financing, or a business line of credit, exploring your financing options can help you determine exactly what's possible when starting a business in California.
There's a lot to continue to do after taking the first steps above; after all, these are just the steps you should take if you're starting a business in California. You'll also want to look for small business insurance, hire employees, create a marketing plan to spread the word about your new business, find a location if you're going to need a physical store or office, and more. For these structures, the business name must be distinguishable from names already on the California Secretary of State's record, and in the case of LLCs and corporations, it cannot mislead the public. In addition to the local business operating license, you may also need other licenses or permits, depending on the type of activity your business is doing or the location where you are operating.
If you plan to file a DBA, or do business as, which means you will use a different name than the legal name you filed in California, also called a fictitious name, you will need to file it in the county where your company is located. The California Governor's Office of Economic and Business Development has a handy search tool that can help you find what licenses and permits may be needed for your operation. For help deciding the location of your business, contact the California Business Investment Services unit of the Governor's Office of Economic Development (Go-Biz). The business licenses your company requires depend on where you are located and the type of services you provide.
The first step to obtaining a California business license is to name and form your company if you haven't already done so. Each agency in California handles business licenses differently, but most require licenses to be renewed annually or biennially. You can run a business as a sole owner (only you) or general partnership (you and one or more partners) instead of forming a business entity such as an LLC or a corporation. There are several requirements for starting a business in California so that your company can operate efficiently and, most importantly, legally.
In other words, there are serious legal and financial implications attached to this decision, so it doesn't hurt to consult a business lawyer when deciding which structure is best for your business. To verify the availability of your company name, you will need to mail a letter of inquiry regarding the availability of the name to the California Secretary of State's office in Sacramento. A good business plan can help you stay organized and goal-oriented throughout the startup process and is often necessary as part of your business loan application. If you realize that you need some extra money to start your business, there are several financing options you can explore, even as a startup.