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In California, there are various requirements that businesses need to meet to operate legally. This guide will give you all the necessary details to start a company in the state.

Pick a Name

Before you start a company in California, it’s vital that you choose a name for your business. This will help you establish a proper business structure.

A business can be categorized into various types of entities. These include forming an LLC in California, a C corporation, or a sole proprietorship. The best business entity is one that fits your specific needs, such as how much risk you want to take and how much tax you want to pay.

Develop a Business Plan

Like a home, a business plan will help you build a strong foundation for your company. Your business plan should cover various aspects of the business, such as an overview of the company’s operations and a description of its type. It should also include various details about the sales and marketing strategies you’ll implement. 

Your business plan can serve as a roadmap for your company’s development, and it can also be used in your efforts to secure funding for the business.


When you establish a company in California, you’ll need to register it. The exact steps involved in this process will vary depending on the type of business that you’re planning on operating. 

The California secretary of state has a section that provides information about the fees and forms you’ll need to complete. You’ll also need an EIN, a nine-digit number that the IRS uses for multiple purposes, such as filing taxes and opening a bank account.

File Taxes

In addition to running a successful business, you must also pay taxes in California. There are a variety of agencies that can help you navigate the various regulations that apply to your business. These include the Franchise Tax Board and the California Tax Service Center.

Most businesses in California will have to pay a franchise tax, and corporate income tax is also applicable to them. Sole proprietors and other companies operating in the state pay income taxes on the money they bring home. Members of an LLC also have to pay taxes on their money.

Obtaining Licenses and Permits

While the secretary of state has a lot of business-related paperwork, you’ll also need to apply for various permits and licenses in California. You’ll need to complete these things when you start a company in the state.