WE NOW SERVE YOUR BUSINESS AND CORPORATE LEGAL NEEDS

WE NOW SERVE YOUR BUSINESS AND CORPORATE LEGAL NEEDS

We are happy to announce that attorney Liliana Gallelli offers clients' business law representation in our North Bay offices (Santa Rosa, Napa, San Rafael and Ukiah).  Liliana speaks Spanish, French, Italian and Portuguese and has 16 years of experience as a business and immigration attorney.

Here are a few of these services we now offer to our small business clientele:

BUSINESS FORMATION

·       Limited Liability Company (LLC)

·       C Corporation

·       S Corporation

·       Partnership

·       Sole Proprietorship

·       Application for Contractors License (with CLB)

·       Application for Liquor License (ABC)

·       Application for other permits and licenses

CONTRACTS:

·       Agreements for the purchase or sale of businesses

·       Joint venture or partnership agreements

·       Shareholder agreements

·       Confidentiality or Non-disclosure agreements (used to protect confidentiality of intellectual property)

·       Vendor agreements

·       Agreements for sale of products or services

·       Real Estate purchase contracts

·       Investment agreements

EMPLOYMENT DOCUMENTS AND AGREEMENTS:

·       Employment Agreements

·       Independent Contractor agreement (if you will have any independent contractors)

·       Advice regarding employment issues

A GUIDE TO OPENING A BUSINESS, Part 4: Obtaining Necessary Permits

A GUIDE TO OPENING A BUSINESS, Part 4

By Christopher A. Kerosky, Esq.

This is the fourth segment in a series of articles I’ve written on the process of starting and managing a business in California.  This is intended to provide the reader with a step-by step guide through the primary tasks necessary to legally register your business and start operations in this state.

This segment is on obtaining necessary permits to open your business..

Overview.

California requires a host of different permits for those doing business in the state.  Many new business owners are confronted with a vast array of licenses, permits and regulations that can be intimidating and confusing to anyone.  But there are resources available, especially on the internet, to help you through this process.

The most common permit required is a seller’s permit, obtained from the California Board of Equalization (BOE).  This permit allows you to do sales of goods in the state and requires your business to collect sales taxes from customers to cover any sales tax owed to the state.  The taxes are paid annually, quarterly, or monthly, depending on the business sales volume.  If you sell goods to the public, you will need a seller’s permit whether or not those goods will be taxable.  This would include any grocery stores, department stores, gift shops, convenience stores, shops of any kind with products for sale.  It also includes on-line sales located in California. 

On the other hand, services are not taxable in California and therefore businesses that only provide services are not required to obtain a seller’s permit.  This would include most architectural firms, engineers, lawyers, doctors, computer repairmen, etc.  Construction contractors who actually sell products such as custom furniture or windows and doors must charge a sales tax.

One obtains a seller’s permit by submitting the appropriate application to the Board of Equalization.  A sole proprietor or partnership use Form BOE-400-MIP; LLCs and corporations use Form BOE-400-MCO.  You can use one application to obtain a seller’s permit for all of your locations where you sell goods.

Many businesses require additional permits from the state.  For example, the state of California regulates many businesses.  Obviously many service occupations such as doctors, nurses, physical therapists, lawyers, engineers, architects and construction contractors are licensed occupations requiring certain qualifications and usually passing an examination to get a license.  Other examples of businesses which require state permits are bars and nightclubs, auto repair shops, locksmiths and waste management companies.   The federal government requires permits for such things as operating a trucking company, operating a radio or television station, manufacturing food, alcohol or drugs, or making or selling firearms.

Local governments often regulate businesses as well.  City zoning laws dictate which activities are allowed in particular locations.  If your type of business is not consistent with the zoning for the location, you will either need to get a permit known as a conditional use permit, or be granted a variance allowing you to be exempted from the zoning rules.  You should contact your city or county planning department to determine whether your business complies with local zoning.

There is one website in California which provides a comprehensive list of all the government requirements for specific businesses.  This site is a good starting place for any business to determine which permits and licenses are necessary for your type of business.  The website address is www.calgold.ca.gov.

If you are considering starting a business, I advise you to go to this site, enter your business type and location, you will be find a list (often a long list) of the licenses and permits you will need from the federal, state and local government.  The bureaucratic requirements can be somewhat overwhelming, but with some persistence, it can be done. 

Here are a few examples of the permits needed and where to get them in Sonoma County:

Building Inspection and Alteration Permits: Permits for modifying the physical space of your business,  contact County of Sonoma Department of Building Inspection

Business Property Statement: Businesses may be required to report all equipment, fixtures, supplies, and leasehold improvements held for business use based on at cost and/or value,

contact County of Sonoma Assessors Office

Business Tax Registration: All businesses are required to register for a Business Tax Registration Certificate, Contact County of Sonoma Treasurer Tax Collector

Fictitious Business Name: You must file a fictitious business name, unless you use your own personal name for the business: Contact County Clerk's Office, Treasurer-Tax Collector

Fire Department Permit: For public assemblies, garages, storage, service stations, theaters, hazardous chemicals or gases,  contact County of Sonoma Fire Department

Zoning and Planning: Your business location must be checked to determine if it is zoned for your type of business. This also applies to businesses operating from a residence,  contact County of Sonoma Planning and Zoning

Registration Form for Employers: Required to file a registration form within 15 days after paying more than $100.00 in wages to one or more employees. No distinction is made between full-time and part-time or permanent and temporary employees in meeting this requirement,  contact state Employment Development Department Employment Tax Customer Service Office

Wage/Hour Laws: Businesses with employees must comply with laws establishing minimum standards for wages, hours and working conditions,  contact State Department of Industrial Relations Labor Standards Enforcement

Workers' Compensation Information: Businesses with employees must maintain Workers' Compensation Insurance coverage on either a self-insured basis, or provided through a commercial carrier, or the State Workers' Compensation Insurance Fund,  contact State Department of Industrial Relations Division of Workers' Compensation

A GUIDE TO OPENING A BUSINESS, Part 1

By Christopher A. Kerosky, Esq.

The following is a series of articles on the process of starting and managing a business in California.  It is designed for the small business owner who may not be familiar with California law or procedures.  I will attempt to provide the reader with a step-by step guide through the primary tasks necessary to legally register your business and start operations in this state.

First Step: Choosing a Proper Business Form and Registering Your Business.

One of the most important and sometimes most difficult decisions is the proper legal form for your business. There are four basic legal forms, each described below: the sole proprietorship, the partnership, the corporation and the limited liability corporation (LLC).

Generally, the decision should be made with reference to several factors: simplicity and cost of organization; control and decision-making; taxes; and responsibility for the debts and other potential liabilities of the business.  In another article, I deal in depth with the differences between each, but I will describe the basic differences here. 

A sole proprietorship has the advantage of simplicity, requiring less registration and paperwork.  Also, the income of the business is treated as income of individual for tax purposes, which makes tax return preparation a bit easier.  However, there is no protection from personal liability for the owner.  The debts of the business are treated as debts of individual, including liability due to accident or injury.  

A partnership also does not require formal registration or continuous meetings and minutes, as with a corporation.  However, a written agreement between partners is strongly advisable.  Like a sole proprietorship, the income of the partnership are not separately taxed.  But, again, the partners are not shielded from liability.  There are now limited liability partnerships (LLPs) which do provide limited protection for liability, although not as complete as with a corporation or LLC.

Corporations and Limited Liability Corporations are very similar.  Both require corporate documents to be drawn up, usually by a lawyer.   Both require registration with the state described below. 

With corporations, certain legal documents must be kept on an ongoing basis, such as shareholders meeting minutes, records of stock transactions. Formation of an S corporation requires an additional filing with the IRS.  With LLCs, the ongoing paperwork is not as demanding. 

With both LLCs and S corporations (used by most small businesses), income is treated as the  income of its shareholders just like a sole proprietorship.  With larger C corporations, income of business is not treated as  income of individual for the tax purposes. Only dividends paid to shareholders [or salary paid to employees] is treated as income. On the case of payment of dividends, this can subject the company to double taxation under certain circumstances.

One of the principal advantages of LLCs and S corporations is that the debts of the business are not treated as the debts of individual partners. A corporation can go bankrupt even while its shareholders remain solvent.  Most importantly, the shareholders are shielded from the liability of the corporation as long as the corporate formalities are followed.

Once you have decided which business form you will use, it may be necessary to register your business with the state of California.  Corporations or LLCs need to file special registration papers with the California Secretary of State.  For corporations, the necessary papers are called Articles of Organization.  Limited liability partnerships file a Limited Liability Partnership Registration form. 

The Secretary of State must approve all names before they can be registered.   The main criteria that the Secretary of State’s office applies is that they ensure that your proposed name is not already taken by another entity of the same type.  A business entity in California may not use a name that is already registered to another existing business entity of the same type.   Before you file your registration documents with the Secretary of State, it is worth it to check your potential names to see if they are available.  If they are, you can immediately reserve one of them.  You can do so through the Secretary of State’s office in person or at the telephone numbers or websites listed below. 

California Secretary of State Offices

Name check phone number is 916-653-6814

Online at www.ss.ca.gov. 

Sacramento Headquarters

1500 11^th Street

Sacramento, CA 95814

(916) 657-5448

Los Angeles Branch

300 S. Spring Street, Room 12513

Los Angeles, CA 90013

(213) 897-3062

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CHRISTOPHER A. KEROSKY of the law firm of KEROSKY PURVES & BOGUE has practiced law for over 25 years and has been recognized as one of the top lawyers in Northern California for 9 years by San Francisco Magazine “Super Lawyers” edition.   He graduated from University of California, Berkeley Law School and was a former counsel for the U.S. Department of Justice in Washington D.C.  His firm has offices in San Francisco, Los Angeles and 7 other locations in California. 

WARNING: The foregoing is an article discussing legal issues. It is not intended to be a substitute for legal advice. We recommend that you get competent legal advice specific to your case.