How to Successfully Start a Business in California
Good weather and a number of large cities make California an attractive location to start a business. Starting a business in California may have many legal and tax ramifications, depending on the structure and nature of the business. Concerns new business owners in the state of California must address include paying taxes, choosing a location and financing the business.
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Instructions
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Create a business plan. This provides the business with a framework from which to operate. Attend business seminars provided by the California Small Business Assistance (SBA) to gain access to information like financing and marketing strategies for new businesses.
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Select a structure for the business. California business owners may elect to form a sole proprietorship, limited liability company (LLC), limited partnership (LP), limited liability partnership (LLP), partnership or corporation. The business structure has a significant impact on the taxation and liability of the owners. Each business structure has its own paperwork requirements and filing fees. California sole proprietorships don't have to file paperwork with California. All other business structures must file the appropriate documents with the California Secretary of State.
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Apply for an Employer Identification Number (EIN). Contact the IRS via phone, fax or mail to obtain an EIN. In addition, Form SS-4 may be completed online, which will provide a business with an EIN for immediate use. Calling an IRS representative at 800-829-4933 allows a business to receive an EIN over the phone. Faxing Form SS-4 with a return fax number allows the IRS to provide a business with an EIN in four business days. Mailing Form SS-4 causes a business to have to wait up to four weeks before receiving an EIN. California sole proprietorships don't have to apply for an EIN.
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Register the business for California state taxes. After receiving an EIN, the business must register for California state taxes. Sole proprietors must use their Social Security number if they elect not to apply for an EIN.
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Obtain California state permits and local business licenses necessary to operate the business. All businesses in California, even home-based businesses, must obtain a business license. Furthermore, certain types of businesses, such as accountants operating as an LLP, must obtain the proper professional licenses.
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Start a business bank account. Business registration documents such as incorporation paperwork and the company EIN must be provided to establish a business bank account. A business bank account helps owners separate business from personal funds. In addition, having a separate business account makes it easier to track and record business transactions.
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