Business ownership provides freedom to manage yourself and the product you produce. You set your own hours and make your own living without relying on others. So, it’s no wonder why owning a business is one of the most common aspirations out there. However, getting from the “quitting your day job” stage to the “open for business” stage can sometimes be complex. Follow this simple checklist to start your own business in California.
Start by Choosing a Business Structure
Your business structure is one of the most important decisions you make. This controls not only how you’re taxed, but also how much proverbial skin you have in the game. The most basic business structures are corporations, limited liability companies (LLCs), and sole proprietorships.
Corporations are the most structured and rigid business type, offering complete separation of assets between you and the business. There are several required documents for establishing a corporation, including Articles of Incorporation, Bylaws, and more.
LLCs are generally smaller companies. The business owner’s assets are only tangentially linked to the company’s – hence, limited liability. Although there is some risk, LLCs are easier to establish than corporations and don’t usually require additional documentation.
Sole proprietorships present the most risk but are also the most accessible business structure for an individual who does not plan to hire employees. A sole proprietorship business requires minimal paperwork and, therefore, is cheaper to start.
Name Your Business
Choosing your business name is an exciting but monumental choice. For the most part, a business name is a personal decision, though it’s prudent to reference lists of existing businesses to ensure your chosen name isn’t already taken in your state. Once you’ve decided, you’ll need to file your Fictitious Business Name (or DBA) paperwork with your state.
Apply for Tax IDs
While the previous two steps establish your business as an entity in California, receiving your tax identification numbers from the state and the Internal Revenue Service (IRS) means you can finally collect money for your goods or services. The Small Business Administration (SBA) can help guide you on where to apply for your IDs.
Receive Your Business Licenses and Permits Before You Start
Depending on the business you’re in, you may or may not need a license or permit before you make your first sale. Find out the requirements for your type of business and industry on the SBA website. You may need licenses and permits from both the state and federal government, so always check both local and federal sources before you start on your business ownership journey.
Filing Business Startup Documents Throughout the Inland Empire
If you’re ready to take the leap and start your business in California, let ProSe Legal help you organize, complete, and file your business formation paperwork. Your livelihood is important to us, so our experienced legal document assistants (LDAs) will ensure you file everything right the first time. Without locations throughout the Inland Empire and growing throughout Southern California, ProSe Legal is your one-stop shop for all your legal document needs.
If you need help filing your business startup documents, or call (909) 224-4361 today!
