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How To Start Your Business In California?

  • Published: October 14, 2019

Choose A Business Structure

The first item to discuss with your business law attorney when starting your own business in Los Angeles, California is your business structure. You have three basic options when deciding on a structure:

  • Doing Business As (DBA): A DBA is not actually a separate structure. It is just a different name that an individual or a set of partners uses as their business name.
  • Corporation: A corporation is an entirely separate entity that provides liability protection to the owners of a business. A corporate structure includes shareholders, directors, and officers, and is the entity of choice for large companies and startups that intend to fundraise. Certain professionals are required to structure their business as a professional corporation (PC):
    • Accountants
    • Acupuncturists
    • Architects
    • Chiropractors
    • Clinical social workers
    • Dentists
    • Lawyers
    • Counselors
    • Doctors
    • Speech-language pathologists
  • Limited Liability Company (LLC): An LLC is a separate entity from an owner or partner but also provides very easy management, since it does not require directors or officers. The LLC structure has largely replaced the DBA and Corporation structures in popularity in recent years, as it provides liability protection with much less complexity and taxation.

Choose A Business Name

Deciding on a business name is easier said than done. There are many potential legal and business problems that could arise as a result of choosing the wrong name for your company. Make sure that you’ve covered the basics of a successful business name. Is the name unique and easy to pronounce? Can it remain relevant over time? Once you decide on a list of possible business names, consult with your Los Angeles business law attorney to ensure that you complete the following steps:

  • Search The Internet For Your Desired Business Name – Search for your potential business name using as many search engines as possible to look for any potential conflicts, particularly in your state or local area. If you intend to operate an online business that provides goods or services nationally or internationally, then it is especially important that your business name be unique. This search should reveal any cases where a company name is being used online but has not been officially trademarked.
  • Perform A Trademark Search At The US Patent And Trademark Office – This will give you a very good idea of whether your business name will run into any conflicts. There is somewhat of an art to trademark searches and there are trademark specialists who will charge you a significant amount of money to do a thorough search for you. It is your best bet to simply ask your trusted Los Angeles business law attorney to perform the search for you. It is important to also search for misspellings, plurals, variations of spelling, and other versions of your desired name to be sure that it’s not already registered in some form.
  • Search The California Secretary Of State’s Business Entity Database – Be sure to search or ask your business law attorney to search for spelling variations, plurals and, misspellings of your desired business name. California may reject a name that is too similar to another business name, and then you’ll have to start your name search over.

California business names must adhere to certain restrictions:

  • Must include the correct corporate identifier or an abbreviation of such
  • Must not contain the terms bank, trust, trustee, insurer, insurance company, or any other term suggesting the issuing of policies of insurance.

Register Your Business

Every state has its own specific requirements for registering a business. Once you’ve chosen a business structure and picked your business name, check-in with your Los Angeles business law attorney to be sure that you comply with all the requirements to register your business in California.

Obtain A Federal Employer Identification Number (EIN)

Your business’s EIN is like a Social Security Number for your new company. A Federal Employer Identification Number is required for all Corporations and LLCs. An EIN is optional for a DBA, if your business does not have any employees. If the company does have employees, then a Federal Employer Identification Number is required. However, if you are a DBA without employees and don’t obtain an EIN, you will be required to use your own Social Security Number on many business documents. Your Los Angeles, California business law attorney will likely recommend you obtain an EIN to prevent identity theft.

Apply For Business Licenses And Permits

Once you’ve registered your business name in Los Angeles, CA, you or your business law attorney will need to obtain a business license for your company. This license authorizes your company to do business in your jurisdiction and will also involve registering for state taxes, and any permits the city requires.

Peter Bronstein

About the Author By focusing solely on legal issues affecting businesses, with an accounting
degree with his JD, lawyer Peter Bronstein is able to offer informed
counsel, detailed planning... Read More