How to start a business in California?

Table of Contents

Have you thought about starting a business in California? Starting a business in California is similar to start a business anywhere in the world if you fit the criteria of laws and your business adheres to California’s needs and requirements.

Let us know how to start a business in California.

Choose your business

You have to be sure about your business interests and your choice of :niche. If you are not sure about it then you should stop and rethink about it. You need to choose what interests you and the people in California.

Read Also: How To Start A Catering Business?

A study about the leading businesses in California and the likes and dislikes of people will help you choose the right business for you. If your business idea is great but it doesn’t work for the people of California than business will be a complete flop. Hence, choose a business that keeps you interested in work and that also adheres to people’s likes and dislikes in California.

Choose your Business Structure

There are a few legal business structures you need to stick to when starting a business in California.

Doing Business As (DBA)

Doing Business As also known as Fictitious Business Name (FBN) is a structure where the individual or the business partners can use a different name for the business and run it according to themselves.

Limited Liability Company LLC

An LLC has a different entity but does not require any directors or officers. This is a newer type of structure and many are using it to fit their model and access the perks of it.

Read Also: How To Manage Your Business Expenses?

A Corporation

A corporation is more complex than a DBA and includes stakeholder, directors, and officers. There is also a professional corporation for architects, lawyers, etc.

A Name for your Business

You have to choose a unique name to suit your business. Search the internet and search that there is no other company running with the same name. If that is the case, then it will confuse your customers where to go and will divert your potential customers.

Choose a name that defines your business type and gives the proper messages to someone who reads it. Do not leave loopholes for people to fill in because they will get irritated and never return to your brand again.

Some rules that you must follow for a business name in California:

  • If your business name follows the corporation structure then it should contain the word corporation in it.
  • When you are starting a profession related business such as a company with law assistance than the name should include PC – Professional Corporation in it.

If you do not follow these rules, then your business will not be registered legally with the California laws.

Register Your Business

It is very important to take the registration of business seriously. If you do not have the required documents that you will not be able to start your desired business.

Steps to form a Liability Limited Corporation

California Secretary of State LLC division –

  • You have filled the required forms and once you are approved you have to hold an Organizational Meeting with all your stakeholders, officers, etc.
  • Member Certificates
  • Member Operating Systems

Steps for Corporation in California

  • Fill the necessary forms
  • If they are approved, hold a meeting that determines the shares of every shareholder in your business with proper documentation.
  • IRS form

Bank Accounts for your Business

You have to open specific business accounts to keep your personal and professional expenses different. This is highly recommended because during the time of audit it is easy for the officers to check your account and the business expenses. If they are mixed with your personal expenses than it might create confusion and also might arise a suspicion over you and your business.

Registration Of your Business

Registration of business is very important to operate the business. You have the right permits from the state and the nation. If you start doing your business without any one of the permits than it is going to be fatal for you and your business. Hence, get all your registrations done.

An Accounting Set up

You need a properly defined accounting setup for your business. This will help you understand how your business is running and how it should be more better. The numbers will define the condition of your business profits and losses. The accounting will help you monitor all the expenses and observe your profits and losses very closely.

Business Insurance

All the businesses including home businesses are recommended to have business insurance. In case any situation arises where you have shut your business then you should be able to ensure your employees and workers without which you can be legally charged. Hence, if you are DBA< LLC or Corporation business you must have insurance in case of any emergencies.

Build Your Brand Image

After all the legal procedures are done and approved you have to start building your brand image in the vicinity. Make the best use of social media and reach out to more people through Facebook, Instagram and Twitter. Also, use traditional marketing like direct marketing. Send your advertisements and increase your brand awareness in the city.

Collect Testimonials

Get more and more good feedbacks from customers and use for your best. Publish it on all your social media platforms and let more and more people know about your happy customers.

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You have read about how to start a business in California. Hope you start your business idea rolling with these guidelines.