California Business Registration: Everything You Need to Know
To make your first sale in California, the state's Franchise Tax Board requires all LLCs and corporations that plan to conduct business in the state pay a franchise tax. 3 min read
2. The City of Encinitas
3. Steps to Obtaining a Business Registration Certificate
4. How to Incorporate a Business in California
5. Employer Requirements in California
California business registration can be a difficult task without the right guidance or knowledge.
To make your first sale in California, the state's Franchise Tax Board requires all LLCs and corporations that plan to conduct business in the state pay a franchise tax. Up until 2010, business done in California was broadly described as actively making transactions for financial profit or gain. At present day, your business is considered to be doing business in the state if it meets the following:
- Actively engaging in profitable transactions.
- Organized or managed in California.
- Sales in California exceed $500,000 annually or 25 percent of total sales.
- Real personal property in California exceeds $50,000 annually or 25 percent of the total property.
- California compensation exceeds $50,000 annually or 25 percent of total compensation to the entity.
The Business Registration Division in San Bernardino, California, works to issue business registration certificates. It also helps enforce transient merchant, personal property sales, and outdoor display ordinances. The city's laws do not allow any business or person to conduct business without a registration certificate or following Title 5 of the city ordinance.
If your business has other locations, you'll need a separate certificate for each one. Exceptions are given to businesses exempted by state or federal statute. It's also prohibited to sell products or food in open lots or temporary locations in the city.
The City of Encinitas
There's a Business Registration Program in the City of Encinitas. This program helps the city identify which businesses are officially registered and able to do business in Encinitas. The initial fee to register for a certificate is $39 with a $24 renewal fee each following year. They are valid for 12 months; however, you will have to pay $39 if you forget to renew before the expiration date.
Some of the criteria that will determine if you need a business registration include:
- The location of the business is physically in the city
- The business provides services within city limits
- Rental income is collected from any space within the city limits
- An electronic device is used in Encinitas to do business with others outside the city
- A post office box or mailbox in Encinitas is used to receive business materials and payments
Steps to Obtaining a Business Registration Certificate
- Check the business resources information to see if permits are required.
- File the business registration application by mail with the applicable fee.
- Once processed and approved, you will receive the business registration certificate, which must be publicly displayed in the business.
If you have any questions or concerns, contact the permit administrator of the city of Encinitas.
How to Incorporate a Business in California
- Select a business name. Finding a name for your business is no easy task. The name should not limit future expansion, be too “punny,” or confuse your business with someone else's. You should use the state's business name database to prevent using an already registered name.
Select your incorporation type. Picking the correct business entity or structure is important; you can figure out which one your business will be through the following items:
- Present and future filings and applicable fees
- Formality requirements
- Limited liability protection
- Requirement to file a Statement of Information
- File your incorporation paperwork. You may need to file specific documents for your business to be registered in California, such as a Statement of Authority for a General Partnership or an Articles of Organization for an LLC.
- Consider taxation. It's recommended to consider taxation when looking at potential business structures; LLCs and corporations must pay an $800 franchise tax before making a sale in California.
Recognize other important factors.
- Employer Identification Number (EIN): if you plan on having employees, you will need to get one from the IRS using Form SS-4.
- California Tax Registration: if you register your business in California, you will need to get specific business licenses, permits, and identification numbers.
For more information, contact California's Tax Service Center.
Employer Requirements in California
The state has certain rules that all employers must follow. For more information on these requirements and regulations, contact California's Employment Development Department.
If you need help with California business registration, you can post your job on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies such as Google, Menlo Ventures, and Airbnb.