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Step By Step Guide To Starting a New Business in California

29 May, 2018

Establishing a company in California is something that is highly popular amongst many people, as of the year 2017. And why wouldn't anyone want to own a business in California? California is a famous city all over the world, and it is the number one state where venture capital can be found easily.

Other than this, California has also declared thousands to millions of tax credits for those who are looking for or about to start and grow a business in California. And this is one of the reasons why California is the most desired state for anyone to start their small business.

So that you do not miss a step and start the business properly, here are seven crucial steps that have to be followed for starting a business in California:

  1. Draft a Business Plan

    Incorporating a business can be at times very overwhelming where you tend to lose vision of your goals and get disorganized. Before you start your business, it is essential to take the time to make a plan with all your goals mapped out on it. Moreover, ensure that you have all the steps that you need to make for achieving the goals.

    Timing is something that is important for obtaining success in business and when the steps you listed are made on time and properly that is when you know you will become successful. It is normal for many entrepreneurs to jump into the business that they do not think about the consequences of their actions.

    While starting a business is quite exciting, to bring it to life can be exhausting and laborious. And with the right steps in front of you, you would be able to work on it perfectly well.

  2. Discuss your Plan with a California Business Attorney

    This is a crucial step before you start a business due to the tremendous number of legal repercussions associated with the new company you are planning. Hence, it is vital to consider all the legal expectations that can obstruct your idea and the attorney would be able to assist you with this. You would be able to avoid what some businesses cannot - unexpected lawsuits.

  3. Form an LLC or Corporation

    Another step that is crucial is the business structure you choose, and the advised ones are either - Limited Liability Company (LLC) or a Corporation. They would help to secure you (the owner) from any liability and would even offer tax savings.

    Hence, it is better to choose these business types along with a professional attorney to stand with your business in case any legal issues come up, and also to ensure that your business does everything right to remain an LLC or Corporation. This is since, if it is not correctly formed or maintained, your company would be declared as a Sole Proprietorship.

    Other than this, you need to make sure you are following all the rules and regulations by creating an LLC or Corporation. Particularly, ensure you file all the proper securities exemption notices that are with the California Department of Business Oversight. In case you fail to comply with any of the security laws conditions, it would result in criminal penalties.

  4. Register a Business Trademark

    The registration of your business' trademark and logo with the United States Patent and Trademark Office (USPTO) is imperative since you would not want someone to use your business name or logo any other place in the future. With this, no one would be able to use a similar business name or website URL as well.

  5. Comply With Legal, Permit, and License Requirements

    As soon as you have formed an LLC or Corporation with the state, it is important to comply with the requirements as well, such as getting the local business license or permits. In case you fail to do so, you would be responsible for paying a harsh amount of fines and penalties.

    And if you are selling a tangible property, ensure that you obtain the Seller's Permit from the BOE, which is the California Board of Equalization. For finding out the respective licenses or permits that your business would need, you can get the help of an attorney who is based in California or the government agencies.

    Another thing that you have to ensure is that your company complies with the American with Disabilities Act (ADA) as the failure to do so would result in the significant expenses connected with settling and defending the ADA lawsuits.

    As per the CCDA, which is the California Commission on Disability Access, the most ADA claims that came up against the companies in California include those with access within public bathrooms and facility, entry and route accessibility, and parking.

  6. Register For, Pay & File Business Taxes

    A lot of the entrepreneurs fail to understand the importance of taxes as they begin their new business. And the California Franchise Tax Board is entirely observant about those companies that fail to pay the taxes and file the returns. Moreover, companies that fail to comply can have their businesses suspended, while the business owners would have their bank accounts levied.

    The best way to avoid the pitfalls of the paying of taxes and to increase the tax savings, you would need to hire a professional accountant to take care of all the issues and let you know when and how to manage to pay the taxes on time. Moreover, if you would be hiring employees, it would require you to register with the California EDD (Employment and Development Division).

  7. Properly Hire & Pay Employees

    A lot of the liability, compliance and tax problems are connected with hiring employees. Hence it is crucial that you are following the related laws when you begin your company. Moreover, get the employees to sign an employee handbook (for the regular update of account for the law), and an employment agreement when hiring them.

    However, when you are firing or hiring an employee, make sure that you are following the federal and California anti-discrimination laws. Also, the working conditions, work hours and employee wages have to be as per the laws. To know more about the requirements, connect with an accountant or lawyer for more details.

    You also have to give every employee their Workers' Compensation insurance, and if you fail to comply with this, you would be flooded with penalties. And if you are not sure how to go about this, hire a lawyer or visit the government entity near you for the details.

In the end, you can see that starting a business in California is not a small thing, which is why it is essential to plan out everything correctly so that you do not make any mistakes regarding it. The rules of California and every other state keeps changing and evolving. To have a better idea and ensure that you are going the right way, hire a professional lawyer to help you.

About the Author


IncParadise offers incorporation services in all 50 states in the USA since 1999. Because of our great experience in incorporation business we are able to offer high-quality services at an affordable price. We do formation of Corporations, LLC, Registered Agent Service, Mail forwarding, Virtual Office and the other kind of filing services in all 50 states. Visit our website: www.incparadise.net


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