How to Start a Small Business in California
A practical guide for small business owners
I pulled the content from a Intuit published “How to Start a Small Business in California 2025 QuickBooks” I distilled 32 pages down 7 pages for a shorter read.
This guide explains the main steps to starting a small business in California in clear, practical language. It is designed to help you understand the process, the common filings, and the decisions you may need to make before you open your doors.
Starting a business can feel like a lot at first, but it becomes easier when you break it into steps. In most cases, you will need to choose your business type, pick a legal structure, register if required, get the right licenses or permits, understand taxes, and set up basic financial records.
Why California can be a good place to start
California has a large customer base, many industries, and a wide range of local markets. That can create opportunities, but it also means higher costs and more rules in some areas. For many owners, success depends on choosing the right location, understanding local requirements, and keeping startup costs under control.
- Choose the type of business you want to run.
- Research your market, customers, and competitors.
- Write a basic business plan.
- Choose a legal structure, such as a sole proprietorship, partnership, corporation, or LLC.
- Decide how you will cover startup costs.
- Choose your business name and decide whether you need a DBA.
- Choose your business location.
- Choose a registered agent if your business type requires one.
- Get an EIN if you need one and set up your tax records.
- Register your business with the state if required.
- Get any licenses and permits you need.
- Get business insurance that fits your risks.
- Learn which taxes apply to your business.
- Open a business bank account and organize your records.
Use official state, county, and federal agency websites when you need current forms, filing instructions, or fee information.
This guide is a starting point. Exact requirements depend on your city, county, industry, and business structure.
Choose your business name and decide whether you need a DBA
Choose a name that is easy to use, fits your business, and is not already taken. Before you print signs, order supplies, or create marketing materials, check whether the name is available through the California Secretary of State for entities that register there. If you operate under a name that is different from your legal business name, you may also need a DBA, also called a Fictitious Business Name.
Reserving a business name
You can reserve certain business names with the California Secretary of State for a limited time before filing. State forms and fees are listed by the [California Secretary of State](), and online filing services are available through [bizfile Online] ().
Filing a DBA
A DBA lets you do business under a name that is different from your legal business name. In California, DBA filings are generally handled at the county level where your business is located.
County rules can vary, but many businesses need to check name availability, file a Fictitious Business Name statement, and complete any required publication steps. Check your county clerk for the exact process.
Choose your business location
Your location affects rent, local taxes, permits, foot traffic, delivery costs, and how easy it is for customers to find you. Some owners start from home to keep costs low, while others need a storefront, office, or warehouse.
Before choosing a location, check local zoning rules, lease terms, parking, signage rules, and permit requirements. If you are opening in a city or county with higher costs, include those costs in your startup budget.
Choose a location that fits your customers, your budget, and the day-to-day needs of your business.
Choose a registered agent if your business needs one
Corporations, LLCs, limited partnerships, and some other registered entities must name a registered agent. This person or company receives legal papers and official state notices for the business.
You may be able to act as your own registered agent if you meet state requirements, but many owners choose a service so important documents are handled reliably during business hours.
Get an EIN and set up tax records
An EIN is a federal tax ID number for your business. You generally need one if you have employees, operate as a partnership, corporation, or LLC, or need it for banking or tax purposes. You can get an EIN for free directly from the [IRS] (), and the agency says legal entities such as LLCs, partnerships, and corporations should be formed with the state before applying.
Register your business if your structure requires it
Not every business needs formal state registration, but corporations, LLCs, and limited partnerships generally do. The [California Secretary of State] () provides entity forms, filing options, and fee information, including online filing through [bizfile Online]().
| Entity | Registration | Notes |
| Sole proprietorship | Usually, no state entity filing | You may still need a DBA, local license, seller’s permit, or tax registration depending on what you do. |
| General partnership | Usually, no state entity filing | A written partnership agreement is strongly recommended, and a DBA may be needed if the business uses a different name. |
| Limited partnership (LP) | Certificate of Limited Partnership required | The [California Secretary of State] () lists LP formation forms and fees. Verify the current filing fee before submitting. |
| Corporation | Articles of Incorporation required | The [California Secretary of State () provides forms, filing methods, and current fees for corporations. |
| Limited liability company (LLC) | Articles of Organization required | The [California Secretary of State] () lists LLC formation at 2470 and the initial Statement of Information at 2420, due within 90 days of registration. |
Get the licenses and permits your business needs
California does not have one general statewide business license for every business, but many cities and counties require a local license or tax certificate. Depending on your business, you may also need state permits or professional licenses. The [Cal Gold] () permit tool can help you identify likely permit requirements by city and business type.
Common examples include local business licenses, seller’s permits for businesses that sell taxable goods, health permits for food businesses, and professional licenses for regulated occupations. The [California Office of the Small Business Advocate] () notes that seller’s permits are generally required for businesses selling or leasing tangible personal property, and the [California Tax Service Center] () says there is no charge for a seller’s permit, although a security deposit may sometimes be required.
Choose insurance that fits your business risks
Insurance helps protect your business from losses caused by accidents, property damage, claims, and other risks. The coverage you need depends on your industry, location, equipment, employees, and contracts.
| Type of insurance | What it generally covers |
| Workers’ compensation insurance | If you have employees, California generally requires workers’ compensation coverage. It helps cover work-related injuries or illnesses. |
| Commercial auto insurance | If your business owns or uses vehicles for business operations, this coverage helps protect against vehicle-related claims and losses. |
| General liability insurance | Help cover claims involving bodily injury, property damage, and some legal costs. Landlords and clients often ask for it. |
| Commercial property insurance | Helps cover damage to business property such as equipment, inventory, furniture, or the building if you own it. |
| Cyber liability insurance | Helps cover certain costs related to data breaches, cyberattacks, and other technology-related losses. |
| Product liability insurance | Help protect against claims that a product you made, sold, or distributed caused injury or damage. |
| Business owner’s policy (BOP) | Often combines general liability and property coverage into one package for eligible small businesses. |
| Professional liability insurance | Help protect service businesses if a client claims your work, advice, or professional service caused a mistake, loss, or problem. |
| Local or contract-specific requirements | Some cities, landlords, lenders, and clients may require certain policies or coverage limits before you can operate or sign a contract. |
Understand your tax responsibilities
Your tax responsibilities depend on your business structure, whether you have employees, what you sell, and where you operate. Common obligations may include federal income taxes, self-employment tax, payroll taxes if you have employees, California income or franchise taxes for certain entities, and sales or use tax if you sell taxable goods. Tax rules change, so verify requirements with the [IRS](), the California tax agencies listed by the [California Office of the Small Business Advocate] (), or a qualified tax professional.
Open a business bank account and organize your records
Keeping business finances separate from personal finances makes bookkeeping, tax filing, and cash-flow tracking much easier. Most banks will ask for documents such as your formation papers, EIN, business license information, or DBA paperwork, depending on your situation.
Choose a bank or credit union that fits your transaction volume, cash needs, and online banking preferences. Review fees, minimum balance requirements, and lending options before you decide.
Keep clear records of income, expenses, payroll, receipts, and tax documents from the start. Good records help you understand how the business is doing and make it easier to work with an accountant or tax preparer.
Use a simple recordkeeping system that you can maintain consistently, whether that is a spreadsheet, bookkeeping software, or support from a professional bookkeeper.
Helpful resources
For official information, start with the [California Secretary of State] () for entity filings, [Cal Gold]() for permits, the [IRS]() for EINs and federal tax guidance, and the [California Office of the Small Business Advocate] () for small business support resources.