3. Registering for a Domain Name
Some entrepreneurs find that searching for an expiring domain name makes sense. This search can help with SEO efforts. Expired or expired domain names are still searched for and registered, which can help with Google searches. However, only do this if:
- The name makes sense for your business
- The name ranks well in Google searches
- The name may increase in value due to the demand
4. A Physical Address
All businesses in Los Angeles need a physical address: a home, office, or something else. In addition, entrepreneurs should remember that they may be subject to specific zoning and licensing requirements based on their company’s physical location.
5. Select a Business Structure
Along with the business name, the structure of a new business presents a unique choice. Entrepreneurs will weigh several factors when deciding which business structure will suit their new Los Angeles company best. Advice can also be sought from a professional business attorney.
Sole proprietorship
Sole Proprietorships make sense for individuals who do not want to run their companies as separate entities. Sole Proprietorships are easy to set up, inexpensive to start, and no business maintenance exists. While these are significant advantages, a disadvantage to choosing this structure is that business owners assume personal liability for claims against the company.
General Partnership
A general partnership is similar to a sole proprietorship because it does not necessitate corporate formalities. Instead, general partnerships feature two or more owners, and each owner shares unrestricted personal liability. When considering general partnerships, entrepreneurs should be cautious and consult an attorney for advice.
Limited partnership
In limited partnerships, two different types of partners are permitted to exist. General partners have unlimited liability, and limited partners are only liable for their company investments. In addition, limited partnerships are required to be registered with the California Secretary of State; this limits liability for the partners.
Limited Liability Company (LLC)
LLCs are a popular option that provides limited liability to the company’s owners without requiring corporate formalities. Part of the popularity of LLCs stems from the fact that owners are only liable for the amount of their investment in the company. However, LLCs are not permitted in some industries, such as lawyers, dentists, accountants, physicians, and more.
S Corporation
In S corps, profits and losses pass through the owners. However, the owners are still afforded protection from being held personally liable for all of the entity’s debts. Also, LLCs can elect to be treated as S corps to receive both the lenient formalities of an LLC and the tax advantages of an S Corp.
C Corporation
Like S corps, C corps protect shareholders from personal liability if the company meets the required corporate formalities. One disadvantage of running a C Corp is that the company is subject to double taxation.
Corporation
Corporations provide owners with limited liability. One disadvantage to corporations is that owners must follow yearly corporate formalities. Corporations are treated as C corps by the internal revenue service but may also decide to be treated as S corps for tax advantages.
A corporation is an entity that offers its owners limited liability. One drawback of a corporation is that it requires the owners (shareholders) to follow annual corporate formalities.
Professional Corporation
Specific industries such as doctors, dentists, attorneys, and others must form a professional corporation instead of a more traditional entity. Again, speaking with a licensed business lawyer can prove helpful in helping entrepreneurs navigate this process.
6. After Choosing a Business Structure
After reviewing the options, entrepreneurs must register the business with the California Secretary of State. A partnership agreement, bylaws, and an operating agreement may be needed depending on the entity’s structure. This is reliant on the specific entity. For example, LLCs require that the company owners draft an operating agreement, but LLCs do not require bylaws. If a corporation is formed, bylaws are necessary to outline how the company will be operated and display legitimacy to investors and third parties.
7. Get an EIN and Bank Accounts
Tax Identification Numbers, or EINs, are required so that companies can set up proper bank accounts. The Internal Revenue Service’s website is helpful for this process. EINs also help owners of sole proprietorships avoid using their social security numbers to set up accounts. EINs are recommended for all new companies and owners and are relatively easy to procure.
8. Licensing for the Business
Lastly, all businesses in Los Angeles should apply for the necessary federal, local, and state licenses and permits. Owners, locations, and business names will all be required for the registration process. Registered agents are recommended for corporations, LLCs, LLPs, or other registered entities, and checking in with Los Angeles County can help answer additional permitting and licensing questions.
Contact Nakase Wade to Start a New Los Angeles Business
Our experienced business lawyers and corporate attorneys have helped many entrepreneurs navigate the startup process. We encourage you to contact us for a free consultation, and we wish you luck with your new company.