Is it Really Worth Registering a Business in California?
Introduction
Registering a business in California has its pros and cons, like with every state, and you may need a little more convincing than just the thought of taking in the sand and sea while you work. It’s important to carefully consider the business environment and overall economy when deciding where to incorporate or form an LLC. This article will help you make an informed decision and also form your California LLC or corporation.
Since 2001, MyCompanyWorks has formed thousands of California businesses. We have definitely learned some things over the past 20 years, and that’s why we want to share our experience and expertise with you. Starting a business isn’t necessarily difficult, but it can be a challenge without some basic knowledge and tools to get started. You can register your California business quickly and get back to building your products and services.
Let’s take a look at some interesting business facts, pros, cons, and get an idea of the business environment to help you decide if registering a business in California is right for you.
Benefits of Registering a Business in California
California is a place where many people go to start their own businesses. It’s considered one of the best states to register a company because of the operating incentives offered by the state and private investors. More than half of the Fortune 500 companies are registered in California. It’s not just corporations who can register their business there, any entity can apply for registration. And there are many incentives for companies, including tax credits and other subsidies or grants that could be available for some start-ups.
12 Interesting Facts About California Business and Economy
- California is home to the nation’s largest economy. The Golden State has seen its share of economic issues over the years, but California still holds the largest economy in the United States and would have the fifth largest economy in the entire world if it were its own country.
- Over 39 million people call California home. As of 2021, the nation’s biggest economy is also driven by the most people living in one state.
- The Bay Area alone is the world’s 19th largest hub for economic activity.
- California currently has about 4 million active small businesses on record.
- 81% of all US wine is made in California.
- Although the overall rank for economic health is in the lower 50% of all states, it’s still fourth in line for best economy in the US.
- Business industries range from agriculture, to film production, to technology advancements in Silicon Valley.
- Many of the nation’s produce is grown in the sandy soils of the Golden State.
- More than $60 billion in revenue comes from California’s university systems. People attend their schools from around the world.
- Southern California is home to the two largest seaports in the United States. Almost half of the nation’s imports arrive through these ports.
- Professional sports in California are valued at almost $34 billion. All major sports leagues have a combined total of 19 teams in the Golden State.
- The median home value is around $550,000 statewide, but San Francisco comes in at almost $1.2 million, and LA’s median home value is just under $630,000.
Form Your California LLC or Corporation with Our State Startup Guide
Even though registering a business in California isn’t really difficult, it can be a complex process, depending on what kind of business you open. For instance, a California LLC is much simpler and faster to form than a PC or Professional Corporation, because of licensing and legal requirements associated with the latter business type. Our California LLC formation checklist is a step-by-step guide to walk you through the process, no matter what kind of company you start.
Some Pros and Cons to Registering a Business in California
The Golden State is home to a diverse variety of public and private businesses in every industry. The state of California has its own set of rules and regulations for those who want to register a business, and these can vary depending on your industry. The state is known for its progressive labor laws and environmental protections, leading to a higher cost to register a business here. California welcomes most businesses with open arms, but there are some pros and cons to consider before forming a California company.
California Business Registration Pros
- While the state currently has a fairly moderate tax rate, many startups head to California for favorable tax credits and incentives to do business in the Golden State
- Diversity across industries makes for an equally diverse talent pool which is great for hiring nearby professionals
- The sheer size of California and its population makes for excellent networking opportunities and resources
California Business Registration Cons
- If you’re doing business in California from another state, you can actually be taxed in both states
- California has a mandatory minimum $800 Franchise Tax just for the privilege of doing business in the Golden State
- Business regulations can be complex and are frequently changing, causing a challenge for small businesses to stay in compliance
Overcoming California Business Challenges
The current challenges that California businesses face are not new, and many entrepreneurs find that those challenges aren’t enough to keep them away from the Golden State. Before you form your company, having a clear business plan will help you decide which entity type is right for your business and you can also track your progress throughout the startup process. If you decide California is the right state for your business, MyCompanyWorks can help you start your LLC or Corporation quickly with our affordable online formation system and friendly customer support team. Our website is also loaded with resources and information to help you stay on task with business compliance.
Quick Summary
Like with every state, California has benefits and drawbacks to starting a business there. Even after considering tax and legal requirements, many entrepreneurs still consider the Golden State an ideal place for successful startups.
Once you have considered the pros, cons, and challenges to running a California business, our team is standing by to form your California corporation or LLC. With thousands of California businesses formed, the LLC experts at MyCompanyWorks can get your business started with just a few clicks and some information about you and your business. Check out our website or contact us today for help and more information.