Do I need business licenses and permits? Stephen has dedicated his career as a lawyer and author to writing useful, authoritative and recognized guides on tax and business law for small businesses, entrepreneurs, independent contractors and the self-employed. Each guide is designed to support the development and retention of small businesses, from creating business plans to navigating the state's tax code. The cost of licensing will vary greatly depending on the location and, in some cases, the type of business you are running. Most small businesses will not need to obtain any federal license or permit, but depending on the size or activities of your business, you may need to obtain a federal license.
For tax purposes, an LLC is considered a “transfer entity”, meaning that business gains and losses are transferred to the owner to be taxed as personal income, rather than corporate income. Companies operating in California can make more money, but the cost of doing business is also much higher than anywhere else. Your business is still regulated by the county and city in which you operate, so you must obtain the appropriate California business licenses if you operate your business from or in California. An LLC and a business license are not the same thing, although both are often part of creating a new business in a state. This includes the imposition of a corporate income tax that applies to corporations and other entities that are taxed as corporations, and a franchise tax that applies to corporations, LLCs, and many corporations.
If you organize your business as an LLC or a corporation, you will also have to pay the fees associated with filing with the Secretary of State. SCORE offers volunteer business professionals and expert mentors to advise and guide entrepreneurs looking to start or expand their businesses. If at some point in the future you no longer want to conduct business with your LLC, it's important to officially dissolve it. If, on the other hand, you want your company to have a different name than yours, you will need to file a fictitious business name statement. Small businesses represent 99.8% of all businesses within the state and employ 48.8% of the state's workforce, making them an essential part of the Golden State economy.
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