The information on this website is not intended to be legal advice, nor is it intended to be a solicitation for the formation of an attorney-client relationship. An attorney-client relationship can only be formed when both the attorney and the client intend for one to be formed. If you choose to send information to The Chevalier Law Firm from this website, do not include confidential or sensitive information. Information you send from this website might not be considered confidential, and its content might be disclosed to others.

2019 © The Chevalier Law Firm

DISCLAIMER     TERMS OF USE     PRIVACY

Annual requirements for Calif. businesses

June 11, 2017

If you run a business in California, you will need to do several things each year (or sometimes every two years) in order to avoid running afoul of the law. Some of those requirements are discussed below.*

 

* Note that this article does not address income tax issues, which is a lengthy enough topic on its own.

 

With the California Secretary of State

 

Statement of Information. The filing requirements for a Statement of Information vary depending on the type of business entity. Sole proprietorships and partnerships do not need to file Statements of Information.

 

   (i) Calif. corporations must file a Statement of Information within the first 90 days of formation, and then yearly.

 

   (ii) Calif. nonprofit corporations must file a Statement of Information within the first 90 days of formation, and then every two years.

 

   (iii) Foreign corporations must file a Statement of Information within the first 90 days of registering in Calif., and then yearly.

 

   (iv) Limited liability companies must file a Statement of Information within the first 90 days of formation, and then every two years.

 

   (v) Regardless of the above filing schedules, a new Statement of Information should be filed whenever there is an "informational change" with the business entity.

 

A failure to file a Statement of Information could result in the Calif. Secretary of State imposing a financial penalty of up to $250 or suspending or forfeiting the entity's status.

 

With cities or counties

 

Business licenses. Most cities and counties require a business to obtain a business license before conducting business. These rules apply to every type of business entity of every size, including sole proprietorships. More than one business license might be needed. Consider the example of a catering company that has an office in Rocklin: 

 

   (i) The catering company will need a business license from the city of Rocklin because its office is there. An initial license will be needed, and it will need to be renewed yearly. More information can be found here.

 

   (ii) If the catering company will do any amount of physical business (such as delivering food) in any other city in Placer County (such as Roseville or Lincoln), it will need a business license from that city. As above, an initial license will be needed, and it will need to be renewed yearly.

 

   (iii) If the catering company will do any amount of physical business (such as delivering food) in any of the unincorporated areas of Placer County in California, it will need a business license from the county. As above, an initial license will be needed, and it will need to be renewed yearly. More information can be found here.

 

   (iv) If the catering company does any amount of physical business outside of Placer County, a business license might be needed from those other areas as well. The general rule is that if you plan to do business within a particular city or county, you will need a business license from that city or county.

 

With the California Franchise Tax Board

 

Franchise Tax. Except for LLCs classified as corporations, every LLC formed in, registered in, or that does business in Calif. must pay a franchise tax of $800 every year. Calif. LLCs must pay their first-year tax by the 15th day of the fourth month after formation. Foreign LLCs must pay the yearly tax when they register in Calif. or when they start doing business in Calif., whichever comes first.

 

LLC Fee. Every LLC that earns income from any source derived from or attributable to California must pay an annual LLC fee. The LLC fee is based on income, with the range being between $900 for LLCs earning under $0.5M, and $11,790 for LLCs earning $5M or more. An LLC must estimate its LLC fee and make estimated payments on it during the current tax year. If the LLC underestimates its fee amount, it will be assessed a penalty of 10% of the underestimation.

 

 

 

Please reload

Recent Posts

January 9, 2018

June 13, 2017

June 10, 2017

Please reload

Archive
Please reload