Start a Business in California
Starting a business in California is easy. All you need to do is file a few forms with the California Secretary of State and start running your business. Below, we show you how to get started and walk you through some of your options.
One option is, of course, to stop reading and just hire us to start your business for you. At Northwest, we form businesses and provide registered agent service throughout the US. That’s our business, and obviously we recommend starting your business in a certain way. We call it “Starting a Business the Right Way."
Starting your business the right way means hiring a registered agent to form your LLC or corporation so you can protect your privacy and receive the care your business needs to stay active. If you hire us to start your California business, we’ll be your registered agent, provide Privacy by Default®, a business address, mail forwarding and local Corporate Guide® service for life.
How to Start a Business in California
You file articles of incorporation for an California corporation or articles of organization for an California LLC with the CA Secretary of State.
You file your initial statement of information.
The CA Franchise Tax Board will send you an informational request form where you can register with them.
You obtain a federal tax ID number (FEIN or EIN) with the IRS after you have confirmation and filed articles from the State of California showing your approved California business.
Opening a business banking account under your new California business name should be easy with these your formation documents and tax id.
If you’re going to have employees or need to withhold sales tax, you will probably need to register with the CA department of revenue. We provide all these links in your online account.
If your business trade requires a license, you’ll have to apply for a license with the California licensing board. (Most businesses don’t.) But if you do, these quick links and contact details are in your online account.
Some local cities or counties have a general license, but most don’t.
You obtain a local trade license if the city or county you’re going to be working in requires it.
If you’re going to have an office or shop you might need an approval from the city zoning for your type of business in that location.
If you get overwhelmed, just get your business pulling in money and worry about regulations later.
Are You A Do-It-Yourselfer? You Can Save Some Money:
If you want to start a business in California yourself, you can just hire us as your California registered agent, and you’ll instantly have the California LLC or corporation forms to file along with filing instructions on the quickest, cheapest, and most efficient way to incorporate an California corporation or form a California LLC. You’ll get the ongoing support of our online tools, reminders and the support of a professional California registered agent service.START YOUR CALIFORNIA BUSINESS TODAY
California LLC vs Corporation
Because LLCs are generally easier to maintain, offer flexible management, and have great tax options, they’re very popular among small business owners. They also tend to have fewer annual requirements. Entrepreneurs seeking to build a large, fast-growing company often prefer the structure of a corporation. Plus, having the option to sell stock is great for attracting investors.
But, what about California? Any pros and cons for a California LLC vs a California corporation?
In terms of fees, California LLCs have the advantage over California corporations. The Articles of Organization cost $70, compared to $100 for the Articles of Incorporation. In addition, corporations are required to file an annual statement of information ($25) each year. LLCs also submit a statement of information; however, LLCs file biennially—every two years—and only pay $20.
When it comes to state taxes, California corporations are typically hit a bit harder—although California spreads taxes around pretty evenly. For the annual franchise tax, corporations are hit with an 8.84% tax rate on yearly income (1.5% for S-corps), with an $800 minimum. However, traditionally taxed LLCs have the luxury of paying a flat rate of $800 for their franchise tax. High-income LLCs, on the other hand, could be subject to an additional fee if their profits exceed $250,000. Rates for personal income are high as well—topping out at 13.3%.
Owning a California LLC is a great option if your goal is to build a small business. However, if attracting investors and expanding are important to you, then starting a California corporation may better suit your needs.
If you want a corporation, you file California Articles of Incorporation:
The California articles of incorporation cost $100 with the California Secretary of State.
We custom draft your California articles of incorporation and initial statement of information when you hire Northwest to start your California business. The basic requirements of California corporations are:
- The California corporation must have a corporate ending such as incorporated, corporation or an abbreviation thereof.
- The duration of the corporation is “perpetual” unless otherwise stated.
- The purpose of the California corporation is general.
- The number of shares the California corporation is authorized to issue.
- The name of the registered agent for service of process in California.
- The name and address of the California incorporators.
- Date of execution.
- The California incorporator must sign the articles of incorporation.
- California does not require original signatures on new CA corporation filings. The stamped form will be mailed to the address of the person who filed the documents.
Start Your California Business!GET STARTED
If you want an LLC, you file California Articles of Organization:
To form an California LLC, you file California articles of organization.
We custom draft your California articles of organization and initial statement of information when you hire Northwest to start your California business. The basic requirements of California LLCs are:
- The business name must have a limited liability company ending or variation of it such as LLC, L.L.C.
- The California business name must be different than already registered California businesses.
- California limited liability companies do not need to state a LLC purpose.
- The California registered agent. You only list the agent name.
- The names and addresses of the initial member(s) are not required
- If the CA limited liability company is to be managed by one or more managers, you must specify this management structure. Managers names are not required. You can elect to be managed by all members.
- Someone must sign as the CA LLC organizer.
- California does not require original signatures on new CA LLC filings. You’ll get a certificate of formation mailed back to you after the state approves your filing only if you mail in your order in duplicate.