In California, small businesses represent over 99% of businesses and provide jobs to over 7 million workers, which the Employment Development Department (EDD) notes is nearly half of the private workforce. Essentially, two-thirds of new jobs in the Golden State are created by small businesses. As of 2022, California had 4.2 million small businesses, which employed 47.9% (or 7.4 million) of the state’s workforce.
California Economy Trends
- The economy of California is deemed the largest in America and the fifth-largest in the world.
- California had a $3.3 trillion economy in 2021, representing 14.5% of the United States Gross Domestic Product (GDP) that year.
- To understand how businesses impact the state’s economy, 63,416 identified companies exported goods worth $146.2 billion from California in 2020, per a report by the U.S. Census Bureau, Department of Commerce. At the time, the state’s GDP was $3.1 trillion.
- Small businesses made up 94.9% (or 60,154) of the exporters.
- In value to the state’s economy, exports by small business firms amounted to $58.3 billion (or 39.3% of the state’s total exports).
Summarily, California businesses are key drivers of economic growth. Hence, starting a business in California requires founders to make critical decisions and meet the state’s legal prerequisites. A business is typically set up in the following steps:
- Step 1: Performing Market Research
- Step 2: Drawing up a Business Plan
- Step 3: Acquiring a Business License or Permit
- Step 4: Securing Funding
- Step 5: Choosing a Business structure
- Step 6: Choosing a Business Location
- Step 7: Registering the Business with the appropriate government authority
Step 1: What Kind of Business Should I Start in California?
There is no all-in-one answer for the type of business a person should establish in California as are a plethora of companies and startups popular in the Golden State. However, independent statistical analysis suggest that the most popular businesses in California are:
- Restaurant and food trucks
- Retail stores (including online retail and E-commerce)
- Professional services
- Health and wellness services
- Real estate services
- Home building and maintenance
- IT services and consulting
- Event planning and management
- Childcare services
To best determine what business would be suitable for a certain location or what business niches are likely to thrive, intending business owners are advised to conduct market research.
How To do Market Research in California
Performing market research for a prospective business involves looking for product or service-gaps in the California market. At the pulse of each business idea should be a product or service that fills a gap in the consumer market and, of course, an idea/concept that is profitable and marketable. Entrepreneurs must also be clear on certain details, such as:
- Why they want to start the business (their interests, skills, and motivations)
- What the market research says about the idea’s viability (including the pros and cons of starting the business in a particular region)
- The type of business enterprise/structure to establish (e.g., a general or limited partnership)
- The business model to use (for example, an affiliate, subscription-based, or franchise model)
- How the business will be financed
- The time they can spend developing the business
- Whether the business will be brick-and-mortar, home-based, or internet-based
California receives over 40,000 business applications monthly. As of March 2023, the state count was 50,984 new business applications (10,279 were from corporations).
Step 2: How To Write a Business Plan
A business plan is a document that reveals how a person intends to start and run their business. It allows an entrepreneur to think through and expand on each aspect of their business. This action plan is also valuable to investors, partner(s), lenders, and even a firm’s management because it simplifies a business’s direction, future growth, and future profitability—which may be difficult to assess or conceptualize from the outside.
When starting a business in California, it is best to develop a business plan tailored to the state, highlighting the California’s unique opportunities, challenges and regulations.
Business owners can create either a traditional or lean business plan. The traditional plan is more common but more extensive than the lean business plan; the former consists of several pages, and the latter is typically a one-page document.
A standard business plan includes the following parts:
- Executive summary: What the business is about and why it will succeed. Here, business owners can highlight the selling points of the business in the California market
- Company description: The problems the company’s product/service will solve, its customer base, and competitive advantages. This should also feature why the business is suited for the California market and how it will address the local market’s needs.
- Market analysis: This will require researching the specific industry in California to identify trends and prospective challenges. The market analysis should also identify California competitors, identify the target market including demographics and geographic locations within the state
- Organization and management: How the company will be structured (whether it will be run as an LLC, corporation, etc.).
- Product or service line: A description of the product(s) or service(s) the business will offer, the pricing, how it will benefit the consumer, how raw materials will be sourced, the cost of manufacturing, etc. Here, also outline any California-specific suppliers, vendors, or service providers relevant to the production service delivery process.
- Marketing and sales plan: This section is the business’s marketing strategy. It highlights a product/service’s SWOT analysis, promotion strategy, marketing budget, etc.
Step 3: Do I Need a Business License in California?
Usually, yes. Most businesses established in California require at least one license to operate. This may be a local, state, or federal business license. (Note: Federal business licenses are necessary for businesses whose activities are regulated by a federal agency.)
No one agency handles the issuance of business licenses in California. The licenses and permits a business requires from the state or a local government (county/city) depend on the business location and activities. Hence, it is often challenging to determine what licenses apply to the legal operation of one’s business.
Fortunately for business owners, the California Governor’s Office of Business and Economic Development (CalGOLD) has an online Business License & Permit System that details the type of licenses required in a particular region and their issuing agencies. Entrepreneurs can search for relevant licenses at the local, state, and federal levels with the system.
Because multiple agencies issue business licenses and permits in California, the state has varying licensing requirements affecting the documentation/information one must submit and the associated fees. The renewal periods of these licenses also differ by agency, but it is commonly biennially or annually. Therefore, all queries about a license should be directed to its issuing agency.
The most common license a person will need to run a business in California is a “business operating license,” often called a “general business license” or just “business license.”
For mail or phone queries, the CalGOLD office can be contacted at:
California Governor’s Office of Business and Economic Development
1325 J St Suite 1800,
J Street-Park Plaza
Sacramento, CA 95814
Phone: (877) 345-4633
How Much Does a Business License Cost in California
The cost of a business license in California varies based on the locality, the type of business, and the license or permit one wishes to obtain. However, the fee is often within a few hundred dollars. One can expect to pay around $15 to $100 for a general business license, although it may be higher depending on the jurisdiction.
Notably, certain businesses may be legally exempt from paying the cost of a business license in California. An example is a sales business run by an honorably discharged veteran (California Business and Professions Code, Section 16102). Business owners are advised to contact their city or county government (or the appropriate state/federal agency) to determine if they qualify for a waiver and for instructions on filing a formal request for exemption.
How To Register for a Seller’s Permit in California
An individual must register for a seller’s permit in California upon meeting the following criteria:
- Actively engages in business based in California as a seller
- Intends to lease or sell tangible personal property that would be subject to sales tax if sold at retail
This requirement applies to the following entities:
- Limited Liability Companies
- Limited Partnerships
- Limited Liability Partnerships
- Married Co-ownerships
- Registered Domestic Partnerships
Persons who do not have a seller’s permit but want to make sales during temporary periods (periods less than 90 days) must obtain a temporary seller’s permit. Examples of such sales include fireworks stands, garage sales, and craft fairs. A temporary seller’s permit is typically valid for up to 30 days at one location.
The California government agency that issues seller’s permits is the Department of Tax and Fee Administration (CDTFA). Business owners can apply for a seller’s permit online by following the system prompts, but online registration is also available at a nearby CDTFA location.
Information that may be required to obtain a seller’s permit includes:
- A driver’s license, state identification number, or other ID numbers (e.g., military ID, Visa, or passport)
- An applicant’s date of birth and email address
- Social security number (corporate officers are excluded)
- Name and phone number of personal references
- Name and account number of the merchant credit card processor
- Bank information (name and address)
- Corporate name, corporate number, state, and date incorporated (for corporations)
- Name, phone number, and address of partner(s), member(s), corporate officer(s), or manager(s).
- Name, address, and phone number of the individual(s) who manages the books and records (i.e., the bookkeeper or accountant)
- Expected average monthly sales and the taxable amount of those sales
A general checklist of requirements is available in the CDTFA’s Guide for New Permit and License Holders guide. One may also call the agency’s customer care center at (800) 400-7115 (CRS:711).
There is no cost to acquire a seller’s permit in California, but the CDTFA may collect a security deposit to cover unpaid taxes that may be owed if the business closes in the future. The amount charged is assessed at the time of application.
The California Department of Tax and Fee Administration can be contacted at any of its offices, some of their addresses and contact information are as follows:
CDTFA Office Sacramento:
3321 Power Inn Road,
Sacramento, CA 95826-3889
Registration Fax: 1-916-227-2926
CDTFA Office Oakland:
1515 Clay Street
Oakland, CA 94612-1432
CDTFA Office Fresno:
8050 N Palm Ave
Fresno, CA 93711-5510
Step 4: How Much Does it Cost To Start a Business in California?
The Small Business Administration (SBA) estimates that most small businesses will cost between $3,000 to $5,000 to set up. However, the actual amount will vary by the type of business, its structure, location and scale. Per California statutes, all business are expected to pay the following:
- Articles of Registration Filing Fees: This is typically paid after determining the business name and type of business entity being established. The type of entity or business structure chosen will determine the registration filing fee as well as the annual tax of the business.
- California LLC Cost: To file an LLC in California, the business owner will be required to pay $70 to the California Secretary of State
- Cost To Set Up a Partnership: In California, business partners are expected to file a business name statement with the county clerk of the jurisdiction where the business is located. This typically costs $26.
- To Form a Corporation in California: Business owners will be required to pay a $100 filing fee to process the Articles of Incorporation-General Stock Form (ARTS-GS). This form is typically filed with the California Secretary of State. If done by mail, additional costs will be accrued.
- Statement of Information Fee
In California, business owners must file a statement of information report with the Secretary of State within 90 days of registering the business. The amount typically varies with the type of the business entity but is usually between $20-$25.
- Annual Fees and Taxes
Californian businesses are legally required to pay an annual franchise tax or privilege tax in addition to standard income taxes determined by profit margins. For an LLC in California with revenue of under $250,000 the annual franchise tax is $800 while S corporations in the state are required to pay a franchise tax of 1.5% of net income each year. For C corporate businesses and LLCs that opt to be regarded as corporations, the tax rate is 8.84% (flat rate) and report net taxable income (i.e. a profit). On the other hand, General Partnership & Sole Proprietorship businesses are not required to pay any state taxes.
How To Get Business Funding in California
A business owner in California has different funding sources for their business, including:
- Grants (There are no federal grants for establishing a business.)
How To Self Fund a Business in California
Otherwise known as bootstrapping, self funding a business involves financing the venture with the founder or owner’s financial resources rather than relying on external sources. This is typically ideal for small scale businesses requiring minimal start-up capital. To self fund a business, owners must:
- Assess their personal finances to determine whether they have sufficient savings, assets or resources to fund the business
- Seek alternative means to trim start up costs: this includes using free tools and resources like those provided by the SMA and the California Chamber of Commerce
- Consider leveraging personal credit
How To Find Investors in California
Investors are a popular option for accessing business funding in California. In addition to providing capital, an investor can provide various resource opportunities, improve networking prospects and lend their voice to critical decisions in the business.
Before looking for a business investor, build a pitch deck summarizing the business plan and research investors interested in the industry or those with documented experience investing in the sector.
How To Get a Loan To Start a Business in California
Individuals who opt for loans can obtain one from family or friends, or they can consider a small business loan from a lending institution. Family and friend loans fall under internal financing, a type of funding where business owners draw from their existing resources to solve a financial problem. The advantage of a family and friend loan is that one might enjoy a lower interest rate or extended repayment duration. However, it is recommended that the parties define the repayment terms to avoid enmity or a falling-out due to the debt.
Alternatively, a business owner can borrow from a bank or the U.S. Small Business Administration (SBA).
Getting a Loan From a Bank or Credit Union
Many banks and credit unions have small business loan packages that they offer to customers at competitive rates. The application procedures can be obtained from one’s preferred bank. Persons who can provide a business plan, expense sheet, and the company’s financial projections for the subsequent five years often have a better chance of securing a loan.
Getting a Loan From the U.S. Small Business Administration (SBA)
Individuals unable to acquire small business loans the conventional way can apply for an SBA-guaranteed loan through an approved lending institution. Compared to traditional loans, SBA-backed loans have lower down payments, and some loans require no collateral to secure, among other benefits.
The SBA offers different loan packages to small businesses and startups, one of which is the microloan program that provides up to $50,000 to help businesses start and grow.
The eligibility requirements for obtaining SBA loans are specific to the type of business (where it operates, how it earns, and the character of its ownership). More commonly, however, the business must have the following characteristics:
- Be able to repay the loan
- Satisfy the SBA’s size standards
- Have a reasonable business purpose
A lender can provide the specific requirements and steps needed to acquire a small business loan backed by the SBA. Individuals can find these approved lenders with the agency’s LenderMatch tool. It may also be useful to consult an accountant or attorney.
How To Find California Business Grants
California business grants can provide valuable financial support for starting or growing a business. The state government operates a variety of grant and funding programs to help support eligible businesses within its jurisdiction. Some of these grants are:
- The California Nonprofit Performing Arts Grant Program
- The California Small and Micro Business COVID-19 Relief Grant Program
- The California Dream Fund
In California, state-funded grants are typically administered by the California Governor’s Office of Business and Economic Development (CALSOBA). The California State Library also operates the California Grants Portal which features grant opportunities within the state, and helpful resources for satisfying the eligibility requirements for accessing these grants.
Local and regional organizations including Small Business Development Centers and Economic Development Corporations also offer business grants and help eligible persons find suitable programs. Grants.ca.gov features a search tool that allows users filter available grants in the state by agency, category, business and disbursement method.
Can I Start a Business With No Money in California?
Technically, no. It costs money to start any business in California. From registering with a government authority to obtaining a license/permit to purchasing business insurance and marking off other items that may be on the start-up checklist, one eventually spends some money to establish a business.
However, some businesses require little upfront capital to start. These are usually service-based businesses, as product-based businesses are capital-intensive. An example is a personal blog, where the entrepreneur only requires a subscription to an internet service, a computer, and their time to start.
Step 5: Choosing a Business Structure in California
Prospective business owners have different business structures they can choose in California. The common types include:
- Sole Proprietorship
- Limited Liability Company (LLC)
- Limited Liability Partnership (LLP)
- Limited Partnership (LP)
- General Partnership (GP)
The business structure a founder chooses affects the following:
- How the business and its participants will be taxed
- How assets and ownership interests will be transferred
- How the business will be operated
- An owner’s ability to obtain funding
- An owner or shareholder’s liability
- Whether it will be necessary to register the business with the Secretary of State’s office
As a result, every founder is advised to consult a tax accountant, attorney, or business consultant when determining which structure fits their business type and the attached legal obligations.
How To Start a Sole Proprietorship in California
To start a sole proprietorship in California, an individual must:
- Choose a business name. This can be the same as the owner’s name, but it is necessary for tax purposes. An entrepreneur whose business name differs from their legal name must file a Fictitious Business Name Statement (also called a “Doing Business As” or “DBA”) with the recorder’s office in the county where the business is located.
DBA requirements may vary by location; thus, one should check with their local recorder’s office before filing.
- Obtain the relevant licenses and permits. The California Governor’s Office of Business and Economic Development (GO-Biz) has a valuable resource for checking the federal and regional licenses or permits a business requires.
In a sole proprietorship structure, the founder (the sole proprietor/owner) has total control over the company and is personally liable for its assets and liabilities. In California, they are exempt from the requirement to register with the Secretary of State.
Sole proprietorships are often excellent choices for low-risk businesses or persons who want to test a business idea.
How To Start a Corporation in California
To start a corporation in California, an owner or their attorney must file Articles of Incorporation with the California Secretary of State (SOS). This can be done online at bizfileonline.sos.ca.gov, but individuals can file in person or by mail. A registration fee may apply depending on the application type. These fees are posted on the Secretary of State’s website and are available in forms. Once the SOS endorses the Articles of Incorporation, the corporation is established and will remain active until its dissolution.
The requirements to form a corporation are different for foreign corporations. In such cases, one must file the following with the SOS:
- A Statement and Designation by Foreign Corporation.
- An original certificate of good standing issued by the country or state where the business was incorporated.
Foreign corporations are also subject to the franchise tax.
Compared to other business types that can be established in California, a corporation is more complex. As a result, it is recommended for already existing large businesses with numerous employees.
In California, corporations are treated as a legal entity that exists independently from its shareholders (the owners). Hence, they can be sued and taxed separately from its owners. Corporations generally protect owners/shareholders from personal liability but do not nullify the owners’ tax liability.
In the matter of taxation, there are two ways that corporations can be taxed: C-Corporation (C-Corp) or S-Corporation (S-Corp). C-Corporations are taxed separately from their owners, while S-Corporations are not. C-Corps are taxed on earnings, and their owners are taxed on this income when it is distributed as payments or an owner sells stock. On the other hand, although S-Corporations are also taxed on earnings, the shareholders are taxed on their share of the corporation’s taxable income, regardless of if payments are disbursed.
How To Start an LLC in California
An LLC (Limited Liability Company) operates on a hybrid business framework. It is a fusion of the corporation and partnership business types. Hence, owners enjoy the benefits of both types of business structures. One or more persons can own an LLC, and the owners are called members.
A Limited Liability Company limits the personal liability of the members regarding business lawsuits or bankruptcy (debts)—just as a corporation does for its owners. That is to say, the owners have limited liability. However, LLCs are not taxed separately from the members.
LLCs must register with the Secretary of State’s office to be established in California. To form an LLC, one should file Articles of Organization (Form LLC–1) online, in person, or by mail with the SOS.
According to the Office of Advocacy, LLCs can be perfect for medium or higher-risk businesses, owners who want to pay a tax rate lower than that imposed on a corporation, and owners who wish to protect many personal assets.
How To Start a Business Partnership in California
The business partnership (or simply partnership) structure comprises two or more owners who run a business together. There are three common partnership types: general partnerships, limited partnerships, and limited liability partnerships.
How To Start a Limited Partnership in California
A limited partnership (LP) has limited partners and at least one general partner. The general partners own and manage the business, and the limited partners are investors having limited liability. A limited partner’s role in the company is constrained to certain responsibilities outlined in the partnership agreement.
A limited liability partnership (LLP) shares similarities with a limited partnership, only that all owners have limited liability. As a result, partners are secured from debts arising from the partnership and are not liable for another partner’s actions. An LLP is usually suitable for attorneys, land surveyors, medical professionals, accountants, and other professional offices.
To start an LP or LLP in California, one must register the business with the Secretary of State’s office. For a limited partnership, an individual must file a Certificate of Limited Partnership. Meanwhile, to establish an LLP, one must file an Application to Register a Limited Liability Partnership (Form LLP–1). Filing can occur online, in person, or by mail, as outlined on the SOS website.
How To Form a General Partnership in California
A general partnership (GP) features two or more individuals who own and manage a business. They are liable for the company’s obligations and debts.
Registering a general partnership with the SOS is optional. General partnerships can record their partnership agreements at the county recorder’s office where the GP is situated. However, those who want to record at the state level can file a Statement of Partnership Authority (Form GP–1).
How To Start a Nonprofit in California
To start a nonprofit in California:
- Develop the mission, goals and bylaws of the organization
This should feature an outline of the organization’s purpose and objectives. It should also outline the rules and procedures of the organization and the operations of its board. These must satisfy California’s nonprofit requirements.
- Develop a fundraising plan and Establish financial systems
Identify and pursue various funding sources including grants, donations, sponsorships and programs or activities. In addition, set up bank accounts, accounting systems and internal controls to aid the transparent and effective management of the organization’s finances.
Nonprofits are also required to obtain an EIN from the IRS in order to open bank accounts and apply for tax-exempt status
- Assemble a board of directors
Per California statutes, nonprofits are required to have a board of directors with at least 3 members.
- File Articles of Incorporation
This requires preparing and filing documents that establish the organization as a non profit with the California Secretary of State. The information required in this case includes the organization’s name, purpose, agent for service of process and a statement of compliance.
- Register with the California Attorney General’s Registry of Charitable Trusts
California requires all charities to register with the State Attorney General within 30 days of receiving any asset. The organization’s representative must complete and submit the registration form CT-1 with other accompanying documents.
- Apply for Tax Exempt Status
To become a tax exempt organization, apply for 501(c)(3) status with the IRS by filing Form 1023 (or form 1023-EZ for smaller organizations). At the state level, the organization will need to submit form 3500A to the California Franchise Tax Board.
In addition to the above, the organization will need to obtain the required licenses and permits required for operations in its niche.
Step 6: Choosing a Business Location
In California, the Department of Consumer Affairs (DCA) oversees the operation of businesses from adequate premises. There are also various boards, bureaus and committees within the DCA that regulate specific industries and professions. Hence, it is pertinent to choose a business location that is both favorable to the venture as well as satisfies the state’s legal requirements.
Independent reports suggest that Los Angeles, San Diego and Sacramento are most favorable for starting a business in California. However, across the state, businesses typically operate from:
- A Brick and Mortar Location
- Online: A Website and/or Social Media Page
- A Residential Address (Home Business)
What Kind of Business Can I Run From Home in California?
No specific statute governs the kind of business a California resident can run from home. Each county and city in California establishes its own zoning ordinances or code that affect these matters. These laws (typically codified as the Home Occupation Regulations) exist to reduce the impact a home business may have on its surrounding neighborhood. As a result, while it may be possible to run a business from a residential complex in one region of the state (perhaps under some strict conditions), that same business may be prohibited in another municipality.
To illustrate: One can run a home-based cottage food business in Los Angeles County, but eating and drinking establishments are prohibited home businesses in the City of Santa Barbara. Similarly, beauty parlors are not permitted in the City of Santa Barbara, but the City Of Huntington Beach allows home-based beauty shops under certain conditions. Other general prohibitions include:
- Animal care, sales, and services
- Medical and dental clinics
- Private clubs
- Carpentry businesses
- Ambulance services
- Health salons and gyms
- Welding and machine shops
- Adult business establishments
- Repair shops
Altogether, the best way to know what type of business can be run from a home in California is to determine the kind that cannot be run. To find out, one should review zoning laws or contact their region’s zoning or planning division. An individual should also review their rental agreement or lease.
How Do I Start a Small Business From Home in California
California residents who want to start a home-based business (referred to as a Home Occupation) generally need to submit the following to the city/county in the business location:
- A business license, which includes payment of a business license tax.
- Zoning clearance.
- A Home Occupation Permit.
- A written consent form bearing the property owner’s signature (if the applicant is not the property owner).
A home-based business license form is usually found on a city/county government’s website. Forms are also provided to apply for zoning clearance and the permit. However, additional requirements may apply depending on the business location. For example, businesses located in Business Improvement Areas in the City of Alameda must pay an additional annual assessment. Further, one may need to obtain a seller’s permit or file a fictitious business name with a county recorder’s office.
An individual can contact the governing body in charge of their residential city or county to ensure compliance when starting a home business.
Starting a Business Online in California
An “online business” refers to any business conducted over the internet. Individuals who want to start this type of business in California must comply with the applicable regulations. This includes filing the business with the Secretary of State’s office (if eligible), obtaining the relevant business licenses and permits from an authority, and others outlined in the California Office of the Small Business Advocate’s Online Business Quick-Start Guide.
Besides the legal requirements to establish an online business in California, owners of online businesses must also comply with the applicable federal and state consumer laws. For example, several laws restrict certain goods from being sold online. Examples include recalled products, certain tobacco products, and defective/used products.
Step 7: Legal Requirements for Starting a Business in California
The legal requirements for establishing a business in California are specific to the type and location of the new business. Multiple statutes and ordinances outline these conditions, including the Corporations Code and Business and Professions Code. All the same, a prospective business owner must usually submit documentation (for example, to register a business or acquire a loan), obtain the necessary business licenses and permits (e.g., zoning clearance), and file the appropriate taxes.
How To Get an EIN Number in California
An EIN is a unique nine-digit number assigned by the IRS for tax purposes. It is also known as a Federal Tax Identification Number. To apply for an EIN, the business must be located in the US and the person applying must have a valid Tax Identification number (TIN) such as a Social Security Number or an Individual Taxpayer Identification Number.
EIN applications can be completed online using the IRS EIN assistant, or may be done via fax or mail. In all cases, the applicant must download and complete the Form SS-4. Fax and mail applications may be submitted to:
(For US applications)
Internal Revenue Service
ATTN: FIN Operation
Cincinnati, OH 45999
(For applicants with no legal residence or place of business in the US)
Internal Revenue Service
Attn: EIN International Operation
Cincinnati, OH 45999
Fax: 855-215-1627 (within the U.S.)
Fax: 304-707-9471 (outside the U.S.)
How To Get a California Registered Agent
A California registered agent is an individual or business entity tasked with receiving legal documents and notices on behalf of a company. Per state statute, every corporation, limited liability company (LLC) and limited partnership (LP) is required to have a registered agent.
The provisions for the operations of a registered agent are outlined in the California Corporations Code (Sections 1502, 1702, and 17701.13). Businesses are required to appoint an individual as their registered agent or hire a professional service considering factors like availability, reliability and cost. In California, the typical registered agent service will cost between $100 and $300 per year. Self-representation is also allowed.
Patents, Trademarks and Copyrights in California
A patent is a legal right granted by the government, allowing an inventor to exclude people from making, using,selling or importing their invention for a specific number of years from the date of filing — usually, 20 years. They cover inventions, processes, designs and certain plants. In California, the U.S. Patent and Trademark office grants and manages patents under the Patent Act which is Title 35 of the US Code.
On the other hand, a copyright is a legal protection granting the author of a creative work exclusive rights to reproduce, distribute, perform, display and create derivative works of the work throughout the life of the author (plus 70 years). The California Copyright Act (Cal. Civil Code §§ 980-989), which provides additional protections to authors beyond those granted by the federal Copyright Act (Title 17 of the United States Code).
Similarly, trademarks are words, phrases or symbols and designs that identify and distinguish the source of goods or services. They protect brand names, logos, slogans and can be renewed indefinitely. The Model State Trademark Law (Cal. Business & Professions Code §§ 14200-14272) governs trademarks and service marks in California.
Requests for patents and trademarks are processed by the United States Patent and Trademark Office. Inventors or applicants interested in getting a patent or trademark may determine the patent type, conduct a patent/trademark search on the USPTO database to ensure the invention hasn’t been patented already and fill out the required application on the USPTO’s Electronic Filing System. The cost of obtaining a patent varies depending on the type of patent and applicant status (large entity, small entity, or micro entity). However, fees usually range from a few hundred to several thousand dollars. On the other hand, a trademark can cost between $250 and $350 per class.
California Business Tax
The California Department of Tax and Fee Administration is the primary agency responsible for administering state taxes in California. They operate in conjunction with the California Employment Development Department and the California Franchise Tax Board.
The specific tax a business owner can expect to pay will vary with the type of business entity as well as the nature and location of the business. However, in most cases, California business owners will pay:
- Corporate Income Tax or Franchise Tax: Corporate taxes apply to C corps and are generally 8.84% of the net income with a $800 minimum per year. However, franchise tax apply to S corps, LLCs, LPs, LLPs and while the minimum is also $800 per year, additional taxes may apply based on income
- Sale and Use Tax: This applies to businesses selling and/or using tangible personal property in the state. The base rate is 7.25% but can be increased because of local sales taxes
- Employment taxes: Including unemployment insurance, employment training tax, state disability insurance and California personal income tax withholding. It is the responsibility of employers to collect and remit these taxes on their employees behalf
- Property taxes, where the businesses owns and/or leases property as well as excise taxes for specific goods and services like fuel, alcohol and tobacco.
Are Business Records Public in California
Yes, business records are releasable to the public under the California Public Records Act (CPRA).
Business records in California are subject to the CPRA because they are received and maintained by government agencies, employees, or officials while executing their official duties. In other words, they pertain to the “conduct of the people’s business.” Thus, these records are available for public viewing or copying unless a specific statute restricts disclosure.
Business information that qualifies for redaction or removal under the state’s public records law includes:
- Social security numbers
- Credit card information
- Banking information
- Driver’s license numbers
- Shareholders, owners, and employees’ contact information (email addresses and phone numbers)