After a long and hard year dealing with the covid-19 pandemic, the economy finally seems to be recovering. All around us, signs are pointing towards a return towards normalcy. This is especially true as businesses reopening and customers return. In fact, California Governor Gavin Newsom has announced a June 15th target date for lifting of all covid-related restrictions on businesses. Now is a great time to take advantage of the economic recovery and begin that business that you have put off due to the pandemic.
This blog post will be a brief overview of the start-up process for California businesses.
Incorporation - selecting a business format
The first step to creating a new business is selecting a business format. A business takes many forms - if you're working by yourself, you can be a solo practitioner. If you're working with others, you can create a LLC or a partnership. Depending on the type of business, we might recommend you create a C or S-corporation to maximize your tax benefits. The options are vast whether you're working by yourself or with others, and we can best help you decide which business format would be best for your needs.
Obtaining an EIN - the gateway to creating a business bank account
An EIN, or employment identification number, is required for LLCs, partnerships, and corporations, and allows the IRS to easily identify you when you file taxes. Most of the time, banks require businesses to obtain an EIN before you open a bank account. A sole proprietor is not required to get an EIN - they can create a bank account and file taxes using their social security number, but we would typically recommend all new business owners apply for an EIN for privacy reasons.
Statement of Information - Letting the state know who runs your company
The statement of information is a simple state filing that lets the state know who your CEO/President, CFO, and Secretary is. It also lets the state know your mailing address and the business address (if they are different). Solo practitioners or partners might take on multiple roles in an organization, and that won't ever be an issue if you are not planning on hiring a dedicated CFO.
Local Permits - Key to Beginning Operations
Local permits are some of the most confusing and frustrating parts of starting a business. Different counties and cities require operating or tax permits that might be inconsistent with each other. What is required for your friend's business in one city may be different for the city your business is located. Different types of businesses also require different permits. We will help you navigate this process so you can remain as stress-free as possible.
After these 4 steps, you can begin to operate your business! The entire process can be as fast as 2 weeks, but certain businesses, mostly in food service industries, might take longer to acquire all required permitting to operate. Either way, our firm will help you navigate this process and make the entire start-up as easy and stress-free as possible.