How to Start a Business in California Properly

California is a great place to live in. Aside from that, it has become one of the ideal places to start a business in the country over the past decade. There are hundreds of entrepreneurs who have established very successful companies in California. If you are interested in starting your own business in the state and has sufficient capital to invest, this is a very great endeavor which can boost your financial situation. However, you cannot just jump straightaway into the business industry. You must learn how to start a business in California properly. Here is the right way to do it.

1.            Determine your business – Before you can even start doing business, you must determine what business you want to engage in. Are you selling products or offering services in California? What product or service do you want to provide? Unless you can determine what business you’re going to start, you cannot proceed with your endeavor.

2.            Identify the business type – Aside from determining your business, you also need to identify the business type. Several business types are sole proprietorship, partnership, LLC and corporation. Each of these business types has its own pros and cons. Sole proprietorship gives you total control of the business but you will also take full responsibility in case your business goes bankrupt. Partnership is often used by two or a very few partners starting a business together. LLC or Limited Liability Company is the ideal business type to protect investors of small business companies from taking full responsibility whenever the company goes bankrupt. Foreign businessmen often choose this type of business type. Corporation is the most complex business type. This is not recommended for entrepreneurs who are just starting their own business.

3.            Hire a business lawyer – Business is a legal institution. You need a business lawyer to help you with all the legalities involved in starting a business.

4.            Register with Secretary of State – In California, it is a requirement to register your business with the Secretary of State. Do not neglect this step or else your business will not be legitimate in California.

5.            Let business lawyer prepare operating agreement and bylaw – Although you are not required by the state to submit the operating agreement or bylaw of your company. However, it is necessary to guide your company operations as well as the distribution of profits, responsibilities and salary of the employees. Your business lawyer can help you draft these documents.

6.            Secure your EIN – EIN or Employer Identification Number is also considered the Tax ID provided by the IRS for those with a business. A lot of the legal requirements need to accomplish when starting a business require EIN. You can leave it to the business lawyer to apply for the EIN especially if you do not have a Social Security Number in the US. Be sure to see page here!

7.            Accomplish business permits and licenses – The last step is for your business lawyer to get the necessary licenses and permits for your business. Make sure your business lawyer accomplished all of these. Look for more facts about lawyers at https://www.youtube.com/watch?v=zru3GIrYvj8.

Once you and your business lawyer have done all of these steps, you can formally start your business and go into production or hiring employees. Know more about Business in California Properly here!