3 Steps for Starting a Business in California

Jul 1, 2020 | Starting A Business

Starting a business can be a very exciting time! After you’ve chosen the name, business structure and gained the necessary funding, there are a few important steps you must take in order for your business to become a legal entity under California law.

1. FILING THE APPROPRIATE DOCUMENTS

Articles of Incorporation

The articles of incorporation/organization establish the existence of the business whether a corporation, LLC, etc. When filed, you are letting the State of California know you are in fact forming a business and the important details about the company.

Statement of Information

The Statement of Information (SOI) provides the state with information regarding the owners and officers of your company, important addresses and a description of the type of business you will be performing. The SOI must be filed within 90 days of the Articles of Incorporation/Organization in order to do business in the state of California.

Federal Employer Identification Number

An Employer Identification Number (EIN) is used to identify your business to the IRS for tax purposes. Your business will be issued a nine digit EIN that you must use to file your various business tax returns.

Licenses and Permits

Depending on what kind of business you start and the operations of your business, you may need to file for a certain type of business license or permit. There are many different types of licenses and permits, like alcohol license, zoning permits, and Seller’s permit, to name a few.

2. CREATING A BUSINESS PLAN

Many startups or newly formed businesses make the mistake of failing to properly set up a business plan for the company. It is highly recommended to sit down with your business partners to flesh out the important details of your business including the business purpose, your goals, a market analysis, financial projections, organization and management, etc.

One of the concrete ways of deciding on the organization and management of your business is by creating an LLC Operating Agreement or Corporate Bylaws.

LLC Operating Agreement

An Operating Agreement is a legally binding business document that fully lays out the operations, rules, percentages of ownership, roles, and many other important planning regulations for the business.

Although this document is not filed with the State of California, any LLC is required to have an operating agreement in order to prevent any conflicting opinions or actions among your business partners.

Corporate Bylaws

Much like the LLC Operating Agreement, all corporations in California are required to have Corporate Bylaws. Although Bylaws are not filed with the State of California, they must contain the rules and responsibilities of the shareholders, directors, and board of directors of your corporation.

A very important tip to keep in mind is that the Bylaws cannot contain anything illegal or conflicting with the Articles of Incorporation.

3. PROTECTING YOUR BUSINESS

Business insurance is a vital step in protecting your business from any potential and unforeseen liability.

General liability is the recommended type of insurance for all business. Depending on the insurance carrier you choose, liability insurance policies can provide protections for property damages and liability claims that might be made against your business. Without business insurance, costs associated with liability may have to be paid out-of-pocket.

There are many insurance companies that provide business liability protections. We advise you to consult with one of our attorneys to determine the best carrier for your business.

If you are in need of assistance with planning and starting your business, please feel free to contact our offices at (858) 926-5797.

Latest News & Updates

Meet Our San Diego Attorneys

Thomas F. Gallagher, Esq.

Troy B. Krich, Esq.

Contact Gallagher Krich, APC

What Clients Say:

Mike K., Google

Rated 5 out of 5
August 11, 2023

Thank you so much for all your help in resolving a real estate matter so quickly and efficiently.

Mike K
Verified

What Clients Say:

Jonas Y., Google

Rated 5 out of 5
December 28, 2022

If you need a “ Closer”, go see Troy. Troy has been one of the best attorneys I have ever worked with. I don’t typically give reviews but after the last case Troy helped me settle out of court, I won’t hesitate to use Troy again! Thanks for all you do Troy !

Jonas Y
Verified

What Clients Say:

Daniel E., Google

Rated 5 out of 5
October 11, 2022

I left a voicemail for Tom late Sunday evening and received a phone call first thing the next morning.

Tom was very quick to reply to any questions I had, and if he was caught up in a meeting, he was sure to return my call promptly.

Tom provided sound and logical advice, during a very stressful and uncertain time. At times I asked him to be more aggressive and was often met with the pros and cons of that decision, allowing me to understand the approach and thought process behind his strategy.

Ultimately he provided options for several paths for us to take, worked swiftly, and got us where we needed to be.

He reached out several times to check on my sanity and make sure I was good.

As someone with very high expectations, I would highly recommend his services. He provided expertise that proved to be successful, and also took the time to make sure I was emotionally solid.

Tom assisted with me with a 50% / 50% ownership conflict.

Daniel E
Verified

What Clients Say:

Deanna, LawConnect.com

Rated 5 out of 5
February 23, 2022

Really informative and actionable, very grateful to have connected and I look forward to working more with them in the future.

Deanna
Verified

What Clients Say:

Marilyn, LawConnect.com

Rated 5 out of 5
February 8, 2022

i liked that a lawyer, and not a staff member, called me to get the details and he gave me his opinion of what his initial thoughts are about my case.

Marilyn
Verified

What Clients Say:

Bob W., Google

Rated 5 out of 5
August 30, 2021

What was thought to be a simple breach of contract turned into a nightmare. Through their tenacity and their deep knowledge of the law, we were successful. There is no reason to look any further as you will not get any better representation than this firm. I highly recommend them and strongly suggest that if you are considering starting a business or are already managing one, this firm will guide you, avoiding the troubled waters businesses sometimes find themselves in.

Bob W
Verified

What Clients Say:

Rasmita M., Google

Rated 5 out of 5
August 13, 2021

Johnny Nitti helped us with our estate plan. He was very meticulous while drafting the plan and spent enough time to explain the details to us. He filed the deed with county recorder and paid for the fees himself. Overall, Johnny did a great job and we definitely plan to work with him in the future for any updates to our EP.

Rasmita M
Verified

What Clients Say:

George A., Google

Rated 5 out of 5
August 7, 2021

Johnny Nitti helped me with my estate planning (will, living trust, etc.) and made the process smooth. He is very responsive and organized. I highly recommend contacting Johnny.

George A
Verified

What Clients Say:

Ashley C., Google

Rated 5 out of 5
July 18, 2020

Tom Gallagher is very knowledgeable and helpful when it comes to business law. I reached out to him reguarding the Pandemic and my salon and I’m so glad I did. Many times stress and hard times can fog clarity and he really helped me understand the laws.

Thanks Tom!!!

Ashley C
Verified

What Clients Say:

Evan D., Google

Rated 5 out of 5
July 16, 2019

Thank you Troy for everything! Professional, prompt, and smooth handling of my case. I will be recommending to anyone that is in need of a lawyer.

Evan D
Verified