Starting a Business in California: Formation, Filing, and First Steps

Starting a business in California means working through several separate systems, and finishing one does not finish the others. You choose the structure with professional guidance, file with the California Secretary of State when the entity requires formation or registration, and then address federal and California tax accounts, any fictitious business name, city or county registration, zoning, seller's-permit or industry requirements, employment obligations, insurance, and recurring filings. An approved LLC or corporation is not a business license, seller's permit, tax account, professional license, or local approval. Because requirements depend on the entity, location, industry, owners, employees, and activities, verify each step with the responsible agency. 1 5 14

This guide is general educational information, not legal or tax advice. Bring questions that depend on your business to an attorney, qualified tax professional, licensing authority, payroll professional, or other appropriate adviser.

Freshness notice: We checked the sources and time-sensitive figures in this guide on August 31, 2026. Recheck every fee, deadline, threshold, form, filing method, processing date, and frequency with the responsible agency immediately before acting.

The California startup path at a glance

The process commonly includes:

1. Define the business activity and location.
2. Select the entity type with appropriate professional guidance.
3. Check the business name.
4. Settle ownership and management.
5. File with the California Secretary of State when required.
6. Work with qualified counsel to prepare or review governing documents and initial company records.
7. Obtain applicable federal and California tax accounts.
8. Register a fictitious business name if needed.
9. Check local, zoning, license, permit, and professional rules.
10. Address employment, insurance, banking, and bookkeeping.
11. Build an ongoing compliance calendar.

Several state and local agencies administer these requirements, so expect to consult more than one official source.

California agency starting map

Use this table to find the right agency. It will not tell you everything a specific business needs.

Step 1: define the business activity and location

Write down what the business will sell or provide, where the work will happen, whether customers will visit, whether the owner will work from home, whether goods will be sold or leased, whether workers will be hired, and whether the activity is professionally regulated.

That description is your starting point for working out which agencies may regulate the location or activity. The agencies themselves confirm the final requirements.

Check location, licensing, and permit rules before you file. The planned structure or location can create additional requirements, and it is better to learn that first.

Step 2: choose the business structure

California recognizes sole proprietorships, partnerships, limited liability companies, corporations, and other structures. 2

Sole proprietorship

One individual owns a sole proprietorship, and there is no LLC or corporation formation filing with the California Secretary of State. Other state and local requirements may apply. 2

General partnership

California's Secretary of State describes a general partnership as two or more persons engaged in a business for profit and says state-level registration of a general partnership is optional. A qualified attorney should determine whether a partnership exists and explain the ownership, authority, tax, and liability issues. 2

Limited liability company

A California LLC is formed through the applicable Articles of Organization filing. California also requires an operating agreement, which the LLC keeps internally rather than filing with the Secretary of State. Management, ownership, internal records, and agreement terms still require attorney review. 2 5

Corporation

A California corporation is formed through the applicable Articles of Incorporation filing. Internal governance and ownership documents are separate from the formation filing, and qualified counsel should prepare or review them. 2 5

Licensed and professional activity

California may restrict the entity, ownership, naming, supervision, or licensing available for a regulated activity. Confirm the permitted structure with the responsible licensing authority and qualified legal counsel before filing. 15 16

If you are comparing structures, review LLC vs. Corporation vs. Sole Proprietorship: How to Choose.

Step 3: check the business name

An LLC or corporation name must meet current California naming rules. A California business-search result is preliminary rather than a formal name-availability or rights determination. 3

California entity-name availability does not establish trademark rights, and even a federal database search will not reveal every unregistered or common-law right. 3 4 Before investing in the name:

• Check domain and social-account availability.
• Look for businesses using similar names in the same market.
• Ask a qualified trademark attorney whether a formal clearance search is appropriate.
• Confirm restricted-word and naming requirements with the responsible agency or licensing board.

If the public brand differs from the legal owner name, a county fictitious-business-name filing may apply. Confirm the filing and publication rules with the county where the principal place of business is located. 5

Step 4: settle ownership and management

Before filing, identify the owners, expected percentages, contributions, management roles, signing authority, approval rights, owner-pay questions, transfers, and departure plans.

These decisions can affect legal rights, taxes, governance, and financing. A qualified attorney should prepare or review operating agreements, bylaws, shareholder agreements, and ownership records.

We can organize the filing information. We do not decide ownership rights or draft individualized legal agreements.

Step 5: complete the applicable Secretary of State filing

LLCs, corporations, and certain other entities use the California Secretary of State's current forms or online system. The Secretary of State also publishes mail and in-person options for applicable filings. 5 6

An entity formed elsewhere may have a California registration obligation depending on its activities. California's Secretary of State provides separate foreign-corporation and out-of-state LLC registration workflows but directs businesses to counsel for the threshold determination. 5 A qualified California attorney and tax professional should assess the company's activities before it relies on a registration or tax conclusion.

As checked August 31, 2026, the Secretary of State lists a $70 filing fee for domestic LLC Articles of Organization, $100 for general-stock Articles of Incorporation, and $30 for the common domestic nonprofit Articles of Incorporation forms. The correct filing and total cost depend on the entity, filing, attachments, and any service option, so recheck the live entity-specific page before submitting. 7 8

Processing varies by filing type, submission method, receipt date, and workload. The Secretary of State's processing page reports the dates currently being reviewed; it is not a guaranteed turnaround time. Check it immediately before planning a launch around an approval. 9

Review every entry and save the receipt and approved document. Verify official-looking mailers with the responsible agency before paying; the Secretary of State warns that private solicitations may resemble government forms. 5

Before submitting the California filing

Once you and your advisers have selected the entity type and settled ownership and management, we can help organize the information the California formation filing needs.

Use the Choose Your Business Type funnel to choose the matching LLC, California corporation, or nonprofit formation service currently offered.

Legal rights, tax treatment, professional licensing, and foreign-registration questions belong with the appropriate professional or agency.

Step 6: complete internal records with counsel

State approval does not finish the internal governance work. Work with qualified counsel to prepare or review the operating agreement, bylaws, ownership records, initial approvals, officer appointments, and other documents that apply.

Keep formation documents, governing agreements, ownership records, written actions, agent information, tax notices, licenses, insurance, contracts, and filing confirmations. California's Secretary of State confirms that bylaws and operating agreements are maintained by the entity rather than filed with that office. 5

Step 7: obtain the appropriate EIN

The IRS currently instructs a person creating an LLC or other legal entity to complete state registration before applying for an EIN and to use the approved legal name. Apply directly through the IRS without charge. 10

EIN requirements depend on entity classification, employees, and federal tax obligations. An entity that does not need an EIN for federal tax purposes may still request one for banking or state tax purposes. Confirm current IRS rules for the business and obtain qualified tax advice when classification or responsibility is unclear. 10

Step 8: address California tax obligations

Secretary of State formation and Franchise Tax Board compliance are separate.

California tax rules can differ from federal rules. The applicable return, payment, rate, minimum tax, fee, election treatment, and due date depend on the entity, classification, tax year, income, and activities. We checked the following figures on August 31, 2026; recheck them before you rely on them:

• LLC: FTB states that an LLC organized or doing business in California generally owes an $800 annual tax, may owe an additional fee when total California income exceeds $250,000, and generally files Form 568. The annual-tax timing, fee calculation, classification, cancellation rules, and exceptions need qualified tax review. 11
• C corporation: FTB states that a California C corporation generally files Form 100, is taxed at 8.84 percent unless another category applies, and is generally subject to an $800 minimum franchise tax. Current first-year and short-year exceptions may apply. 12
• S corporation: An S election requires IRS approval. FTB states that a California S corporation generally files Form 100S, is subject to a 1.5 percent California tax, and is generally subject to an $800 minimum franchise tax. Current first-year and short-year exceptions may apply. 13

Treat these figures as baselines. Confirm the current FTB instructions and due dates for the entity's actual year and obtain qualified tax review before choosing an election, calculating a payment, or filing a return.

Step 9: determine whether CDTFA registration applies

CDTFA states that a seller's permit is generally required when a person is engaged in business in California and intends to sell or lease tangible personal property that would ordinarily be subject to sales tax at retail. The requirement can apply to individuals, corporations, partnerships, and LLCs, including wholesalers and retailers. Temporary and multi-location activity can involve additional rules. 14

As checked August 31, 2026, CDTFA charges no application fee for a seller's permit, although it may require security in some cases. A seller's permit is not the same as a city or county business license. Confirm the business's products, transactions, locations, and sales channels directly with CDTFA or a qualified tax professional. 14

Step 10: check city, county, zoning, and FBN rules

Start with the city for a location inside an incorporated city and with the county for an unincorporated location. City, county, special-district, and state requirements can overlap, so ask each agency you contact whether another approval is needed.

Check local business registration, zoning, home-occupation, building, fire, health, signage, fictitious-name, and industry requirements with the responsible agencies.

CalGOLD can identify potential agencies, but it does not issue permits or licenses and warns that its results may be incomplete. The responsible agency makes the final determination. 15

Formation establishes or registers the entity. Separate local approvals may govern whether, where, and how the business can operate. 1 5 15

Step 11: check professional licensing

California licenses many occupations, professions, and industries. Use the Department of Consumer Affairs, CalGOLD, and the responsible board, bureau, department, or local agency to identify the rules for the planned activity. 15 16

Before forming the entity, confirm the permitted structure with the responsible licensing authority and qualified legal counsel. Questions may include ownership, naming, individual and business licenses, supervision, insurance, bonding, location, and advertising.

Step 12: prepare for workers

Hiring can trigger registration, payroll-tax, wage-reporting, new-hire, notice, workers' compensation, classification, and workplace duties. As checked August 31, 2026, a California business generally must register for an EDD payroll tax account within 15 days after paying more than $100 in wages in a calendar quarter. EDD also says new employees generally must be reported within 20 calendar days of their first day of work. Employer type, worker status, household employment, and other facts can change the rule, so confirm the live guidance with payroll and employment professionals. 17 18

Worker classification depends on the applicable current legal test and the facts, not only a label, written agreement, or Form 1099. California's Labor Commissioner explains that the ABC test applies in many circumstances but that statutory and occupational exceptions can require another standard. Use current agency guidance and employment counsel when classification is uncertain. 19

California employers generally must carry workers' compensation insurance even if they have only one employee. Confirm the business's obligations and coverage with the Division of Workers' Compensation and a licensed insurance professional. 20

Step 13: establish banking and bookkeeping

A financial institution may request formation documents, EIN confirmation, governing documents, ownership information, identification, or licenses, but requirements vary by institution, account, entity, and ownership.

Keep accurate records of income, expenses, owner contributions, reimbursements, payroll, loans, and distributions.

Step 14: review insurance

Coverage needs depend on the work, employees, vehicles, property, data, professional services, contracts, leases, and licensing rules.

A licensed insurance professional can evaluate relevant coverage and any insurance required by California law, a professional license, a lease, a lender, or a contract. The one-employee workers' compensation rule above is only one example of coverage California requires, not a full insurance recommendation. 20

Step 15: build the compliance calendar

Add applicable Secretary of State filings, FTB returns and payments, IRS filings, CDTFA obligations, EDD obligations, local renewals, FBN renewals, professional licenses, agent updates, insurance, and ownership changes.

Private reminder services are a convenience; the deadline itself comes from the responsible agency. Build and update the calendar using current guidance from the responsible agency and qualified advisers.

As checked August 31, 2026, California's Secretary of State lists these Statement of Information baselines:

• Domestic and qualified out-of-state stock corporations: an initial statement within 90 days and a statement every year thereafter; the listed fee is $25. 5 22
• California nonprofit corporations: an initial statement within 90 days and a statement every two years thereafter; the listed fee is $20. 5 22
• California and qualified out-of-state LLCs: an initial statement within 90 days and a statement every two years thereafter; the listed fee is $20. 5 23

The applicable filing period depends on the entity's type, jurisdiction, and registration date. File an updated statement when required information changes, and recheck the live form, fee, and filing access requirements before filing. 5

As of August 31, 2026, FinCEN states that entities created in the United States are exempt from federal beneficial-ownership information reporting under its final rule effective August 14, 2026. Certain entities formed under foreign law and registered to do business in the United States may remain reporting companies. Recheck FinCEN immediately before publication or filing, and obtain legal advice for foreign-entity or unusual facts. 21

A practical note on getting organized

In our experience, a filing goes more smoothly when the founder arrives with the entity type, owners, management choice, legal name, agent information, business activity, location, and target launch date already settled. If the planned activity is regulated, identify licensing and local-permit questions before filing. None of this changes how the agency reviews a filing or how fast it processes one; it saves rework on your end.

Common California startup mistakes

• Treating formation as a license or permit
• Filing before checking professional rules
• Forming elsewhere without California registration and tax review
• Treating entity-name availability as trademark clearance
• Missing a county FBN filing
• Forgetting that the Secretary of State and FTB serve different functions
• Committing to a location before zoning and permit review
• Hiring before payroll and employment systems are ready
• Paying an official-looking private solicitation without verification

California founder checklist

Plan:

• Define the activity and location
• Select the entity with appropriate advice
• Check professional restrictions
• Settle ownership and management
• Verify the legal and public names

Form and document:

• Use the current California filing system
• Confirm the agent and addresses
• Save the approval and receipt
• Work with qualified counsel to prepare or review governing and ownership records

Register and operate:

• Obtain the appropriate EIN
• Review FTB obligations
• Determine CDTFA registration
• File any required FBN
• Check local registration, zoning, licenses, and permits
• Prepare for payroll if hiring
• Establish banking, bookkeeping, insurance, records, and a compliance calendar

Ready to begin the California formation filing?

If the entity has been selected and the ownership and management plan is settled, use the Choose Your Business Type funnel.

If the entity has been selected and you need help organizing the filing information, schedule a free consultation through Calendly. We can explain our formation services, identify the information needed to begin, and point legal, tax, licensing, or permit questions to the appropriate professional or agency.

Executive On The Go provides formation support and educational guidance. It does not provide legal or tax advice.

Frequently asked questions

Where do I register a new business in California?

It depends on the structure and activity. LLCs, corporations, and certain other entities file with the California Secretary of State. Sole proprietors generally do not file entity-formation documents there, but tax, FBN, license, permit, and local requirements may apply. 1 2 5

Is a California LLC approval the same as a business license?

No. LLC formation creates the entity. Local registration, zoning, seller's permits, professional licenses, and industry permits are separate. 5 14 15

Do I need a fictitious business name in California?

It depends on the legal owner, public name, location, and county rules. Confirm with the responsible county. 5

Do I need a seller's permit in California?

CDTFA registration depends on the business's products, transactions, locations, and sales channels. Confirm the requirement directly with CDTFA or a qualified tax professional. 14

Does Executive On The Go provide licenses and tax advice?

No. Executive On The Go provides formation support and educational guidance. Licensing decisions come from responsible agencies, and individualized legal or tax questions belong with qualified professionals.