How to Start a Business in Los Angeles?

Planning to start your business in L.A. but don’t know how and where to proceed? It can be an exhausting procedure unless you have a deep knowledge of this. This article will guide you with stepwise explanations of how to start a business in Los Angeles. So, without wasting any time, let’s begin! 

Steps and Legal Requirements to Start a Business in L.A.

Setup business in Los Angeles USA

Step 1 – Settle for a unique business name 

The first step towards your start-up in L.A. is to first decide on a name for your business. While you already have a name decided for your startup, you need to consider certain things while finalizing it. Here are a few things to take into account:

  1. Make sure that your decided business name is quite catchy and unique
  2. Conduct close observation towards the fact that your chosen business name is not violating the rights of others’ intellectual property or trademark.
  3. Be thorough with the federal, state, and local regulations to confirm that your business name is compliant and available to be used.
  4. Be careful about using any typical terminology which might affect your business in the form of credit risk.

Step 2 – File a Fictitious Business Name for your business in L.A.

Though it is always not necessary to file an FBN while starting a business in L.A., the idea is not bad either. It just better describes the nature of your startup. Here is how you can search and file for an FBN. 

  1. Conducting a search for your business.
  2. Personally file for an FBN by mail 
  3. Publish the FBN.

According to California Law (B&P Code 17917), you must publish an NOI (notice of intent) within 30 days of registering your FBN, to be able to use it (business name) for 4 weeks.

Consider securing your FBN, if it is a unique one. 

Note: Search for a domain name that is about to expire. If your startup business relates to any domain, such as lifestyle, handicrafts, etc., you could leg up your SEO knowledge by purchasing an already existing/registered domain name that is close to expiry. Using such expiring domain names, boost your SEO efforts if that site has already existed for years now (Google confides in older sites more than the freshly registered ones). But make sure it is a domain name that: 

  • Is related to your startup business venture and can be useful to it
  • Can boost your SEO “juice” — search for the older sites that are already well-ranking in Google searches
  • Has the possibility to have increased demand in the near future

Step 3 – Set your business address

Remember that no matter whether your business will be conducted online, through the office or home, you must determine a physical address for your business. You will be subjected to certain licensing requirements depending on your mentioned business location.

Step 4 – Choose a business entity 

Every business has different business entities. There are no two businesses following the same business structure. However, remember that your selection of a business entity will be determined by certain factors. Some such factors include Tax treatments, capital raising ability, ease of formation, etc.

It will be a smarter decision to reach out to an experienced business consultant or attorney to discuss how to choose a business entity. Here are some of the ways of structuring your new business:

  • Limited Liability Company
  • Corporation
  • Non-profit
  • Limited Liability Partnership
  • Professional corporation
  • General partnership
  • Sole proprietorship

Step 5 – Register the Business with State Secretary 

After you are done selecting your business entity, register your business with the State Secretary. It is highly suggested to consult with an experienced business law attorney in Los Angeles to take care of these matters with accuracy.

Step 6 – Prepare a preliminary document of your partnership and operating agreements, or bylaws

As discussed above, based on the structure of your business entity, a draft of a partnership agreement, operating agreement, and bylaws may be demanded. For a Limited Liability Company, you need to draft an operating agreement but no need for bylaws.

However, for a corporation, bylaws are required to be drafted on how the business operation is conducted and establish legality to third parties and outside investors.

Step 7 – Acquire an Employer Identification Number

In order to set up a business in L.A., you will need a Tax Identification Number (also called EIN) to create a bank account. You can easily accomplish this via the IRS’ (International Revenue Service) website. An EIN is even recommended for the entrepreneurs (who go for sole proprietorship) to avoid using their social security numbers instead.

Step 8 – Apply for permits and licenses to begin your business operation

You are almost done! The final move is to apply for local, state, and federal permits and licenses to legally start your business in L.A. This registration includes the business owners, locations, and other details used for the business.

Contact a registered agent if your business entity is an LLP, LLC, a corporation, or any other entity. Confirm with L.A. county whether any license or permit is required or not. 

Benefits of Business in L.A.

Los Angeles California USA

Strong Tech Community and Chances to Connect with Network of Opportunities

Los Angeles has a strong technology community. The frequent company meetups, events, and other industry conferences are great scopes for entrepreneurs and businessmen to connect with a wider network of industries.

This is very important for any startup firm to stay connected with the current marketplace, for fresh talent acquisition and to find some compatible business owners to partner with. 

Offers Excellent International Business Scopes

It is an excellent spot to start up your export-import business, in case you are planning for one. Other than that, the county has not less than 224 different languages speaking people. Imagine how much that contributes to customer discovery. Plus, one of the busiest international airports is located in L.A. serving people from all corners of the Middle East, Europe, and Asia.

Lastly, the seaport handles about half of the port traffic of the U.S. So, no doubt that this county has an ocean full of business local cum international opportunities.

Hope it helps!

After working 5 years as a Software Analyst in reputed MNC, Rebecca decided to settle down and work from home. Having an expertise in business & being a life motivator, she loves to share similar stuff on our website by the means of her articles.