Step:
State
and
Federal
Registration
Permit
The State and Federal government have several different filing requirements to register your business depending on the structure and operations of your business.
If you intend to form a corporation, limited liability company, or partnership, you must file with the California Secretary of State. This is not necessary for sole proprietors. The registration forms and information can be found at sos.ca.gov.
All businesses are required to file state income taxes regardless of their structure or operation. However, different structures have different filing requirements. The Franchise Tax Board provides information about filing for each business type at ftb.ca.gov.
All businesses want to keep lean startup costs but consider seeking professional advice from an accountant so you can save yourself headaches down the road.
Employer Identification Number
An Employer Identification Number (EIN) is also known as a Federal Tax Identification Number, and is used to identify a business entity. Generally, businesses need an EIN if you are an employer with employees or are a business partnership or corporation. You can check to see if you need an EIN here.
For more information about the EIN and to use the online application system visit the IRS website.
Seller's Permit
All businesses who sell something must obtain a seller's permit. The State defines the requirements for those businesses who:
- Are engaged in business in California
- Intend to sell or lease tangible personal property that would ordinarily be subject to sales tax if sold at retail (this includes wholesalers, manufacturers and retailers.)
- Will make sales for a temporary period, normally lasting no longer than 90 days at one or more locations (for example, fireworks booth, Christmas tree lots, garage sale)
You can find more information and register for a seller’s permit on the California Department of Tax & Fee Administration website.
Hiring Employees
If at some point you plan on hiring employees, check in with the following departments so you are on the right track:
- California Department of Industrial Relations – Businesses with employees must comply with laws establishing minimum standards for wages, hours and working conditions. You’ll also need to obtain Worker’s Compensation Insurance coverage. More information about these items can be found on the Department of Industrial Relations website.
- Employment Development Department (EDD) – If you have employees, you’re required to file a Registration Form within 15 days after paying more than $100 in wages to one or more employees. Consult the California EDD website for more information.
- Small businesses have obligations that vary depending upon the number of employees under the Affordable Care Act. More information is available from the Small Business Administration website.
Imports & Exports
If your business will be Importing and Exporting Goods consult the following departments:
- CA State Board of Equalization - Sales and Use Tax – Interstate and Foreign Commerce
- CA Department of Public Health - Food and Drug Branch Export Document Program
- CA Department of Food and Agriculture - California State Trade Export Program
- Small Business Administration Guide for Exporting and Importing