CA Business Facts
California is the largest and wealthiest state in the United States. Major industries include technology (Silicon Valley), entertainment (Hollywood), agriculture/farming as well as millions of small businesses.
Major companies include Google, Apple, and dozens more you would recognize.
California, while a hotbed for startups and top corporations, currently ranks #31 on Forbes Best States for Business list and is known for being more difficult to operate in as well as taxing businesses higher than most other states.
There are 3 top options: a DBA, a Corporation or an LLC. Click here for help choosing your business structure and to learn about business entity types.
“Doing Business As” or “Fictitious Business Name” or “Trade Name” – often used as an operating name to simplify the legal name or differentiate from other businesses with similar names. DBAs are also used to manage multiple businesses under one LLC or Corporation.
Example: California Dreamin’ LLC could register a DBA like California Auto Spa for a car wash business and California Dreamin’ Classic Autos for a custom auto shop, without having to form two separate LLCs or Corporations.
“Corporation” or “Corp” – a separate entity that provides liability protection to its owners. This business structure includes shareholders, directors, and officers. Corporations are more complex than DBAs, but it’s the ideal business structure for profit-earning companies. Some professions are required to form a “Professional Corporation” or PC (doctors, lawyers, architects, etc.).
“Limited Liability Company” – a separate entity that provides liability protection to its owners, and is also easier to manage and taxed less than a Corporation. Because of these features, the LLC has taken first place in popularity over both DBA and Corporation business structures.
Picking a business name is easier said than done – many legal and business problems can arise from picking the wrong name (you can always change it later but the less times you have to do that, the better). In Step 3 we’ll show you how to search for the name in California, but we highly recommend you do the following before searching California state databases:
California business names must adhere to the following restrictions
Each state has its own requirements for registering a business. Now that you’ve chosen a business structure and picked your business name, here are the requirements to register your business in California.
NOTE: When registering a new company The Secretary of State can take several weeks to file the paperwork (California is one of the slower states in the US). You can expedite the process by hand delivering the documents directly to them or one of their field offices and paying an additional fee.
TIP: Check our order form to see how long California is currently taking to process regular and expedited orders.
DBAs are filed with the county. You’ll want to contact your local County Recorder to find out exactly what forms to submit and what they’re submission process is. You can find the local county recorder’s office by searching “YOURCOUNTY county recorder”.
Your EIN is like your Social Security Number for your company. It’s required for Corporations and LLCs and is optional for DBAs unless you have employees (then it’s required). If you are a DBA and don’t obtain an EIN you will be forced to use your Social Security Number on many documents so obtaining the EIN is recommended to prevent identity theft.
TIP: We will obtain your EIN for you if we form your company.
You’ll need to keep business and personal finances separate by opening a business bank and credit accounts. Learn more about how to build your business credit profile. Corporations and LLCs are required to operate these types of accounts, but they position your company for favorable loans and lines of credit. Call your preferred bank and ask how to open a business bank account. Typically you’ll need the following documents:
Click here to view a list of our recommended banks in our Vendor Network.
TIP: Our business formation service includes a free banking solution.
Set up your Accounting and Record-keeping system and learn about the taxes your new company is responsible for paying.
Company documents generally are required to be kept for 3 years, including a list of all owners and addresses, copies of all formation documents, financial statements, annual reports, amendments, or changes to the company. All Tax and Corporate Filings should be kept for at least 3 years. View our “Accounting & Financial Management” section for help with setting up an accounting system and purchasing accounting software.
Now that you’ve registered your business name you need to obtain a business license for your company – this authorizes your company to do business in your city or county. Typically this also involves registering for state taxes and permits (the city may require them as part of the business licensing process).
Click here to explore our Business License Compliance Package.
If you intend to hire yourself or others as a full or part-time employee of your company, then you may have to register with the appropriate State Agencies or obtain Workers Compensation Insurance or Unemployment Insurance (or both). View our “Employees & Payroll” section for help with hiring employees and processing payroll.
Review our list of recommended Payroll Providers in our Vendor Network.
There are many types of insurance for businesses but they are usually packaged as “General Business Insurance” or a “Business Owner’s Policy”. This can cover everything from product liability to company vehicles. A decent policy can run as little as $300/year and offers a great extra level of protection.
Click here to view our list of insurance providers in our Vendor Network.
Prepare the business as if someone needed to take it over and run it for you. This means having a method to process orders, pay bills, pay employees, pay taxes, maintain your permits, etc. Basically, try to make the operational aspect of the business as automated and efficient as possible so you can concentrate on growing your business. View our “Manage Your Company” section for help with systemizing and automating your business.
Now that your company is set up for success, you need to get the word out. Create a marketing plan for your products and services that targets your ideal customer. View our “Marketing & Sales” section for help for more information.
DBA: Your Fictitious Business Name should be valid for 5 years (unless you change the company name or other information listed on the FBN) at which point you’ll need to renew it with the county.
LLC: Washington corporations are required to file a Periodic Report with the Washington Secretary of State biennially on or before April 1, in addition to general taxation. Information on your business’ taxes can be found here. Depending on the nature of your business, you may also need to periodically renew operating permits.
Corporation: Your business must keep corporate records at its principal place of business. Once every two years by April 1, an officer of your corporation must file an annual report. LLCs and Corporations will pay a filing cost of $300.
Click here to view our MyCompanyWorks Premium™ service which can automate most or your ongoing compliance tasks.
California State Taxation Departments
California State Labor and Employment Departments
California Startup Resources
Small Business Administration (SBA) California State District Office
2. SCORE Mentors
SCORE is made up of active and retired business people who volunteer their time to support startup businesses. From coaching to funding resources, finding a local SCORE mentor can save precious time and money.
3. California State Legal Statutes:
5. California Angel Investors
6. California Business News
7. California State Small Business Development Center
Whether you’re starting your business or just need support for your small business, MyCompanyWorks Premium™ includes annual reporting and compliance in your state, status monitoring, forms, storage, and top-notch support from our experienced and friendly team.
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