CA Business Registration:

Starting a Business - What Licenses do I need?

We will begin at the top, with the federal government, move to the state and the county, and finish with the city.

The IRS

1. The federal tax ID is nothing less than a social security number for your business, allowing you to file tax returns for your business seperately from those you file for yourself.

2. The Federal Employer Identification Number is an ID number that establishes with the federal government that you can have empoyees. This allows you to claim some losses as wages paid to employees, and therefore pay your employees without being taxed on that money as if you never lost it in the first place.

The State

3. The State Tax ID serves the same purpose as your Federal Tax ID, but with your states departement of revenue.

4. The Sellers Permit allows for two things. The absolutely necessary charging of sales and use tax and then payment of said tax to the government, but also the very beneficial wholesale, meaning tax free purchase of goods from wholesalers for your business.

5. The State Employer Identification Number does two things. It makes it legal for you to employ other people, which is somewhat important, and it establishes the structures you need to withhold witholding taxes, as well as make payments on them.

6-8

A business does not just exist. It must be made to exist. To do so, you must do one of three things. File for a dba, form an LLC agreement, or file articles of incorporation. The first is with the county and just the county, and the second two are with the state.

• A DBA is the simple registertation of the name of your business for the purpose of opening a bank account, as well as the protection of that name in the county, and its use for advertising.
• The formation of an LLC agreement establishes a parternship that is for all extents and purposes a new person, seperate from you, but in whom you own a stake. The agreement stipulates the rules and bylaws and operating principles of the LLC, and the LLC name is protected like the DBA statewide.
• Filing articles of incorporation provides all the protection of an LLC, with the added protection of rules and regulations defined by the state in which you incorporate, ensuring a degree of accountability of members of the corporation to each other and to shareholder.

9. A business license certifies that your business is legal, preventing you from being shut down arbitrarily without legal recourse, helps you to keep current in your taxes, and ensure you will be elligible and aware of local business incentive and subsidies, which are of no small importance.

 Starting a business means going from the top to the bottom. You start at the federal government with the IRS, go to the state government with the State Internal Revenue Service, and then depending on your next step, stay at the state level or go to the county before heading down to the city and local level.

1. At the federal level your are required to obtain tax ids to identify your business for a fairly simple purpose. The IRS identifies things for tax returns based on numbers. Without those numbers, you will be unable to file the necessary tax returns, nor file them correctly.

2. At the state leve you are required to file for your ids not only for identification, but to open the accounts into which you will pay your taxes, as well as to gain the id numbers necessary to establish business relationships with other business, as well as legally employing your employees.

3. At the local level, you are required to register your business for three reasons. The payment of taxes, the certification that your business as you wish to establish it is legal, and the actual factual registration of your business for police and emergency service needs.

In addition,  INDIVIDUALS / SOLE PROPRIETORS, PARTNERSHIPS & CORPORATIONS OR LLCs using a business name other than their last or legal name need a DBA trade name.

CORPORATIONS & LLCs need a federal tax id.

EMPLOYERS need a federal tax id (EIN), a state tax id (EIN).

RETAILERS OR WHOLESALERS of tangible taxable items / services, need a seller's permit / resale license and a business license.

Note that ALL BUSINESS NEED a business license

-and -

most small business advisors recommend using a federal tax id instead of a social security number to open a business bank account as well as perform a nationwide business name check before your register your dba or corporation.

You can obtain all these permits and more online at www.businessnameusa.com

Simply go online and answer our online questionaire to determine your needs, then fill out our business information form in complete, leaving blank only those fields for which you do not posess the information, finally, complete our payment information form and we will begin processing your order imediately.

www.businessnameusa.com

P.O. Box 14927

Long Beach CA, 90853

310-455-6675

1. The two largest concerns of failing to obtain the tax ids and permits listed is not just audits, fines and penalties, but the very real possiblity of jail time. The IRS is not know for being lenient in these matters when the business concerned has no possibility of repaying the debt, and you likely will not.

2. The largest issues with not obtaining a DBA, LLC, or Corporation are twofold, one relevant to all three, and the othrer just to the second two. The first is the protection of the name and the right to advertise. The second, offered only by the second two, is the legal, financial, and tax liability protection the two filings offer.

3. Without a business license you are vulnerable to a wide variety of misdemeanor charges, fines, penalties, police action, and the posibility of not being able to re-open your business after clearing up everything with the law despite wishing to pursue a license.

Go to this link to determine you fees on a state by state basis:

http://www.businessnameusa.com/services/fees.htm

We have just recently reduced our already bargain basement fees!