You want to start a business in California. But the process looks tough. Too many forms, rules, and deadlines can confuse you. On top of that, you may not know how to register a business in California.
Therefore, you searched online and landed on this article, which shows you the simple steps to register your business in the USA without hassle. You’ll avoid mistakes and save time. Let’s read on.
How to Register a Business in California - A Step-by-Step Guide
Below are all the steps to register a business in California. We encourage you to read these steps and take action accordingly.
Step 1: Plan Your Business
Indeed, it’s an exciting journey to start a business in California. However, it all begins with a solid plan. Thus, you need to do the groundwork beforehand to turn your idea into something real. Let’s read what you should do before launching a business.
Research the Market
First, research the market. Figure out who your competition is and what your targeted customers in California want. Market research doesn’t have to be complicated—it can be as simple as checking out similar businesses online and chatting with potential customers.
For example, if you’re thinking of opening a coffee shop in Los Angeles, see what’s already out there. Knowing your market helps you find your niche and avoid jumping into something oversaturated.
Related Read: Online Business Ideas
Write Your Business Plan
Next, think of your business plan as your roadmap. It doesn’t need to be a 50-page novel—just a clear outline of what you’re doing and how you’ll make it work.
Start with the basics: What’s your business idea? Who’s your target audience? How will you make money? Then, add some details, like your goals and a rough timeline.
If you’re not sure where to start, California’s Small Business Development Centers (SBDCs) can be beneficial.
Calculate the Cost
After researching the market and writing your business plan, you need to calculate the approximate cost to run your business. Sit down and list everything you’ll need: equipment, rent (if you’re going physical), supplies, licenses, marketing, etc.
Fund Your Business
Finally, think about how you’ll fund your business. If you’ve got savings, that’s a great start. Otherwise, look into small business loans—California has programs like the California Capital Access Program (CalCAP) that back loans for startups.
Crowdfunding is another route; platforms like Kickstarter let you pitch your idea to the world. You may also ask your friends or family members who believe in you to invest. Whatever you choose, match the funding to your needs.
Planning might feel like a lot, but it’s all about setting yourself up to succeed. Hence, conduct it properly, and you’ll be ready to move on to the next step of registering your business in California with a clear head.
Step 2: Select Your Business Structure
At this stage, you need to pick a business structure that fits your needs. For your information, you’ll find several business structure types in California, and each option has different rules for liability, taxes, and how you run the business. Here’s a quick look at the main types:
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Sole Proprietorship: You own and run everything alone. It’s simple, but you’re personally responsible for debts.
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General Partnership: You and at least one other person share ownership and management, with shared liability for debts.
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Limited Partnership (LP): Has general partners with full liability and limited partners with liability only up to their investment, who don’t manage the business.
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Limited Liability Company (LLC): Offers limited liability to all owners, with flexible management and tax options.
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Corporation: A separate legal entity with limited liability for shareholders.
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Limited Liability Partnership (LLP): It’s ideal for specific professions like law, accounting, architecture, and engineering, offering limited liability under specific conditions.
Factors to Consider
Think about these key areas when choosing:
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Liability: Do you want to protect personal assets? LLCs and corporations limit liability, while sole proprietorships and general partnerships do not.
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Taxes: Some structures, like sole proprietorships, have pass-through taxation, while Corporations face double taxation. LLCs offer flexibility.
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Management: Who will run the business? Sole proprietorships give you full control, while corporations have boards and officers.
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Capital Raising: Corporations can sell stocks, which is great for growth, while LLCs have flexible options.
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Continuity: Will the business continue if you leave? Corporations and LLCs can last forever, but sole proprietorships end with you.
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Administrative Complexity: Some, like corporations, require more paperwork and meetings than simple sole proprietorships.
For more details, check the California Secretary of State’s website.
Step 3: Choose a Legal Business Name
Once you've selected your business structure, the next step is to choose a legal business name. The process varies based on the business structure, and there are specific requirements to ensure compliance with California law.
For State-Registered Entities (Corporations, LLCs, Limited Partnerships):
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Uniqueness: The name must be distinguishable in the records from existing business names of the same type, as per the
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Specific Naming Requirements:
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Corporations must include "Corporation," "Incorporated," "Limited," or abbreviations like "Corp.," "Inc.," or "Ltd."
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LLCs must include "Limited Liability Company" or "LLC."
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Limited Partnerships must include "Limited Partnership" or "LP."
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Reserving a Name: You can reserve a name for 60 days through
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No Misleading Names: The name cannot suggest a false connection to government entities or regulated professions without authorization, as outlined in the Secretary of State’s name guidelines.
For Sole Proprietors and General Partnerships:
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Legal Name: The legal business name is the owner’s personal name or the partners’ names. No state filing is required for the legal name itself.
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Fictitious Business Name (FBN): If operating under a name different from the legal name, file an FBN statement with the county clerk where the principal place of business is located within 40 days of first transacting business.
This must be published in a local newspaper, as per California Business and Professions Code Section 17917. For example, if John Doe wants to operate as "Doe’s Deli," he must file an FBN with the county.
Restrictions on Business Names
California imposes several restrictions on business names to prevent confusion and protect the public:
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Distinguishable Requirement: Names must be distinguishable in the records from existing entities.
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No Misleading Names: Names cannot imply a connection to government, banks, insurance companies, or other regulated entities without proper authorization.
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Restricted Words: Certain words, such as "insurer," "insurance company," or "university," require special permission or licensing.
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Offensive Language: Names with profanity or offensive content are not allowed at the discretion of the Secretary of State.
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Designators Required: As mentioned, corporations, LLCs, and LPs must include specific designators to clearly indicate the business type.
Restrictions on Business Purposes
In California, while there is significant freedom to engage in various business activities, certain restrictions and regulations govern specific industries and purposes to protect consumers and ensure public safety:
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Licensed Professions and Industries: Many professions require specific licenses, such as lawyers (State Bar of California), doctors (Medical Board of California), and contractors (Contractors State License Board).
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Regulated Industries: Industries like banking, insurance, and telecommunications are heavily regulated, often requiring permits from state agencies like the
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Prohibited Activities: Certain activities are illegal, including illegal gambling, prostitution, and drug trafficking, as per the California Penal Code and Business and Professions Code.
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Environmental and Safety Regulations: Businesses handling hazardous materials must comply with regulations from the California Environmental Protection Agency (CalEPA) and federal EPA guidelines.
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Tax Compliance: All businesses must comply with state and federal tax laws, including income tax, sales tax, and employment taxes, as described by the
However, you can generate business names easily with Dorik’s AI Business Name Generator. It’s completely free to use.
Step 4: File Your Tax and Employer Identification Documents
You now need tax and employer IDs to stay legal. To get those, set up your business with the IRS and California. Here’s how to do it.
Get an Employer Identification Number (EIN) from the IRS. It’s free—apply online at the IRS with your business name and address. Sole proprietors skip this unless they are hiring employees. Everyone else needs it for taxes and bank accounts.
Next, register with California tax agencies. If you have employees, sign up for payroll taxes with the Employment Development Department (EDD). For sales tax, get a seller’s permit from the CDTFA.
LLCs and corporations also register with the Franchise Tax Board (FTB) for income tax. File these now to avoid penalties later.
Step 5: Register Your DBA (If Needed)
A DBA means "Doing Business As." It’s a fictitious name for your business. You need this if you run a sole proprietorship or partnership and use a name different from your own. Corporations and LLCs usually don’t need it unless they operate under a different name.
Now, you need to complete the filing process. To do so, obtain the necessary form from your county clerk’s office. Many counties offer downloadable forms online (e.g., Alameda County’s process is outlined here).
Fill out the form with details like your legal name, fictitious name, business address, and ownership structure. Submit it in person, by mail, or online if your county allows electronic filing.
Also, consider the filing fees that typically range from $25 to $100, depending on the county and the number of names or owners listed.
After filing, most jurisdictions require you to publish the Fictitious Business Name Statement in a general-circulation newspaper in your county for four consecutive weeks. This public notice ensures transparency and allows others to object if the name infringes on existing businesses.
N:B: Regulations differ by county and state, so always verify specifics with your local government.
Step 6: Register a Business in California
Now is the time to register your business with the California Secretary of State if you form an LLC, corporation, or limited partnership. Sole proprietors and general partnerships skip this unless filing a DBA.
For LLCs, file Articles of Organization. For corporations, file Articles of Incorporation. Use Bizfile to submit forms online.
If you wonder, “How much does it cost to register a business in California?” Here's your answer: Fees start at $70 for LLCs and $100 for corporations, plus a $15 filing fee. Note that LLCs also face an $800 annual franchise tax, regardless of income, so factor that into your budget.
After filing, the Secretary of State reviews your documents. If approved, you’ll receive a file number, your business’s official identifier in California, and a stamped copy of your filing. This confirmation marks your entity as legally recognized, allowing you to open business bank accounts, obtain licenses, and operate under state law.
Related Read: How to Start a Business in Texas
Step 7: Apply for License and Permits
For your information, to operate a business in California, you must have licenses and permits. Every business needs a basic business license from the city or county where it’s located.
Some industries need state licenses too, like contractors or doctors. Visit the California Department of Industrial Relations for state requirements. If you plan to sell goods, you’ll need a seller’s permit from the CDTFA.
Some businesses need extra permits. Restaurants need health permits. Bars need liquor licenses. Construction firms need building permits. Ask your industry groups for a complete list. Look up local and state websites to stay on track.
Step 8: Get Your Federal Employer ID Number (FEIN)
A Federal Employer ID Number (FEIN), also called an EIN, identifies your business for taxes. Sole proprietors without employees can skip this and use their Social Security number. Everyone else needs one. You can apply for an employer identification number from the IRS.
You need your business name, structure, and address. The IRS gives you the number instantly. Use it for federal taxes, hiring employees, and bank accounts.
Step 9: Register with the EDD
If you hire employees, register with the California Employment Development Department (EDD). This handles payroll taxes, unemployment insurance, and disability insurance. Go to EDD and sign up online.
You’ll need your FEIN and business details. Registration is free. After approval, you will get an EDD account number. Use it to report wages and pay payroll taxes quarterly. Sole proprietors without employees skip this step.
Step 10: Open Business Bank & Credit Accounts
It’s always wise to separate your personal and business money. Thus, you need to open a business bank account with your FEIN, business name, and registration documents.
Most banks, like Chase or Wells Fargo, offer these accounts. Some banks allow you to open business bank accounts for free, while others may charge a small fee - it depends on the bank you choose.
Next, apply for a business credit card. Use your FEIN and business income details. This helps with expenses and builds business credit.
Step 11: Manage Your Business
You’ve completed most of the challenging steps - a few more to follow. Thus, read on.
Set Up an Accounting System
Track income and expenses with an accounting system. You can use software or hire an accountant. Record all sales, costs, and taxes. This keeps your finances clear and makes tax filing easier. Set aside money for taxes monthly. Review your books regularly.
Obtain Business Insurance
Protect your business with insurance. General liability insurance covers accidents and lawsuits. Professionals like doctors or lawyers may need malpractice insurance.
If you have employees, get workers’ compensation insurance through the California Department of Industrial Relations.
Hire Employees
Find workers if your business needs them. Post jobs on job sites and check candidates’ skills and references. Use your EDD account to report hires and withhold payroll taxes.
Follow labor laws at the California Department of Industrial Relations, like minimum wage ($16/hour in 2025).
Pay Taxes
Pay federal and state taxes on time. File federal taxes with the IRS using your FEIN—Form 1040 for sole proprietors, 1120 for corporations.
Check deadlines at the IRS. For California, file with the FTB—Form 540 for individuals, form 100 for corporations. Pay sales tax to the CDTFA if you sell goods.
Step 12: Grow Your Business
Here, we’ll discuss what you can do to grow your business. Consider it a bonus section of this content.
Marketing and Sales
Boost your business with the best marketing strategy. Use social media to reach customers. Offer discounts or loyalty programs to increase sales.
Track what works—ads or word of mouth—and focus there. Spend wisely on promotion. Alternatively, try SEO to gain organic traffic.
On top of everything, you should create a website for your business to reach a greater reach.
Get More Funding
Need cash to grow? Apply for a small business loan from banks or the SBA. Show your revenue and business plan. Investors or crowdfunding sites like Kickstarter are options, too.
Expand to New Locations
Open new sites if demand rises. Research markets—look at population and competition. Get new licenses and permits for each spot. Use profits or loans to cover costs. Start small, like a second store, before going big.
FAQs
Is It Better to Have an LLC or Corporation in California?
It depends on your needs. An LLC works for small businesses. It’s simple, flexible, and avoids double taxes. In contrast, a corporation suits bigger goals. It can raise money with stocks. Pick LLC for ease, and choose a corporation for growth.
Does a Single Member LLC Need a Business License in California?
Yes, a single-member LLC needs a business license. Every business in California does. Get one from your city or county. For your information, some industries, like contractors, need extra state licenses too. Check local rules and the California Department of Industrial Relations for specifics.
How Do I Register My Business Without an LLC?
You can run a sole proprietorship or partnership. Sole proprietors use their own name—no state filing needed. For a different name, file a DBA with your county. Partnerships work the same—use partner names or a DBA.
File it with the county clerk, pay $25-$100, and publish it in a newspaper. Get licenses and an EIN if you hire. No LLC or corporation means less paperwork but no liability shield!
Is It Illegal to Run a Business Without an LLC?
No, it’s not illegal. You can operate as a sole proprietor or partnership without an LLC. You don’t need an LLC to start. But you must follow laws—get licenses, pay taxes, and register a DBA if needed.
Can You Get an EIN Without an LLC?
Yes, you can get an EIN without an LLC. Sole proprietors don’t need one unless they hire employees. Partnerships, corporations, or anyone with workers can apply. Go to the IRS, use your business name and address, and get it free online.
What Happens If I Create an LLC and Do Nothing with It?
Nothing big happens if you don’t use your LLC. It stays registered with California. You still pay the $800 annual tax. If you skip paying annual tax, you’ll owe penalties—$250 plus interest.
Additionally, the state might suspend your LLC after a few years of no filings. You can dissolve it at Bizfile if you don’t want to continue. No activity means no risk, just fees.
Now Over to You: Operate Your Business Online!
You now know everything regarding how to register a business in California. It might feel big, but it’s doable. Choose your structure, pick a solid name, and file with the state.
Get your licenses, secure your FEIN, and register for taxes. Set up banking and insurance to stay safe. Manage it well—track money, hire smart, and pay taxes on time.
Then push to grow. Market your brand, find funding, and open new spots.
This article discusses everything you need to register a business in California. We believe it benefits you, and you’ll read our other posts in appreciation.
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