, How to Start a Business in Los Angeles

How to Start a Business in LA/How to Start a Business in Los Angeles

Starting a business is something many Americans dream about. You may have a great idea, but getting started can be difficult, especially if you’ve never started your own business before. Follow these tips to help you start a business in Los Angeles

Start a Business in Los Angeles

An idea is great, but you need to make sure that the path to it is solid. Think of what makes your product or service original, so that you people can appreciate the value of your services and choose you over the competition.

You will also have to decide on a business name. Always make sure that the name is catchy, something that people will remember. Also, check that the business name you choose is not in violation of any trademark or intellectual property rights.

Lastly, you will need to look at local, state, and federal regulations to make sure that the name is available. 

How to Open a Business in Los Angeles

Businesses are built through planning. You will need to analyze your plan, including:

  • Product Development: Make sure your product or service solves a problem. 
  • Sales and Marketing: Know how to market your business effectively.
  • People: Consider the roles you will need to hire. 
  • Finances: Get an idea of how many customers or sales you will need to break even, and how you will get funding. 

Register Your Business

You should register your company as a California business entity, like an LLC or Corporation. Once registered, you will gain increased credibility and protection from personal liability.  Here are your options:

Sole Proprietorship

Businesses that are sole proprietorships typically do not want to spend money running the business as a separate entity. This business entity, however, does mean that owners will be personally liable for claims against the business.

General Partnership

A General Partnership has two or more owners, and each shares unlimited personal liability.

Limited Partnership

In a Limited Partnership, there are two different types of partners. One is a general partner who bears unlimited liability, while the limited partner is only liable for what they have invested.

Limited Liability Company (LLC)

Most new business owners find this entity the most appealing because it provides limited liability for the owners. Each owner is only liable for their investment. The downside is that some industries are not permitted to use an LLC for their business. These include:

  • Attorneys
  • Accountants
  • Dentists
  • Physicians
  • Veterinarians


A corporation offers limited liability to all owners. However, it does require the shareholders to follow annual corporate formalities.

S Corporation

In an S Corporation, the profits and losses flow through the shareholders, but they are still protected from being personally liable for debts.

C Corporation

A C Corporation protects shareholders from personal liability as long as the corporate formalities are met. This entity is subject to double taxation.

Professional Corporation

Certain industries in California require a professional corporation. These include, doctors, lawyers, and dentists.

When it comes to registering your business, it is advised to work with an experienced business attorney who can help you understand the different types of entities, their benefits, and their disadvantages.

Register for Taxes

Most businesses will require an Employer Identification Number (EIN). This Tax ID Number is used to identify a business during tax season. Without an EIN, you cannot open a business bank account or hire employees. 

Obtain Permits and Licenses

To operate your business, you will have to comply with federal, state, and local regulations. This most likely involves obtaining business permits and licenses.