Nearly every business in California is required to obtain a business license before beginning operations. In fact, some types of businesses are required to obtain multiple licenses. In the city of San Diego, a new business owner must submit an application for a “business tax certificate” (which is just another name for a business license) and pay the business tax within 15 days of starting the new business. The process for other cities within San Diego County, and throughout the state, is very similar. If your business operates within multiple cities, you may be required to obtain a business license in each of those cities. Failure to pay the tax within the timeframe set by the city will subject the business to fines and penalties. Many cities in San Diego County, including the city of San Diego, check business listings against the tax records of the Franchise Tax Board, in order to determine whether a business operating within the city limits has applied for a business license and paid the business tax. The consequences for failing to do so can be costly.
At Tailored Legal, we can help you prepare and file your application for a business license in any city in San Diego County, including:
- San Diego
- Del Mar
- La Jolla
- San Marcos
- El Cajon
Why We Need Business Licenses?
In addition to city business licenses, many business owners must obtain additional licenses required by their particular industry or by the government or administrative agency regulating their business. The licensing and application process can be complex and it can take months for the government regulatory agency to approve the application. It is essential to properly complete the application the first time to ensure your business operations are not delayed while you resubmit a previously denied application. At Tailored Legal, we have extensive experience with preparing and securing business licenses and registering businesses in various industries and before many different administrative agencies, including:
- General Contractors;
- Law Corporations;
- Dental Corporations;
- Passenger Carriers;
- Charter Carriers;
- Liquor Licenses;
- Pawnbrokers and Secondhand Dealers;
- Real Estate;
- Insurance Agents.
Administrative and Government Agencies
- State of California Contractors State License Board;
- State Bar of California;
- Dental Board of California;
- California Public Utilities Commission;
- United States Department of Transportation;
- Federal Motor Carrier Safety Administration;
- Department of Alcoholic Beverage Control (ABC);
- Department of Justice;
- Department of Real Estate;
- Department of Insurance.
Tax ID and Classification
Tax liability is one of the most important considerations when starting a new business. No matter which type of business entity you choose (see Incorporation, S-Corporation, LLC or Partnership), it is critical to seek professional advice before choosing a particular tax classification for your business.
When you start your new business, you will need to apply for an Employer Identification Number (EIN), also known as a Tax ID Number. Don’t be fooled by its name. Even if you don’t intend to hire employees in your business, you will need to obtain an EIN from the IRS for your business so that your business and individual tax returns are distinguished.
Different types of business entities provide you with several options for tax classification. An S-Corporation will allow you to reduce your self-employment tax liability but provides less flexibility if you are starting a new business with a partner. If you form a single-member LLC, you may elect to be treated by the IRS as a disregarded entity which may help simplify your annual tax preparation. On the other hand, if your LLC has multiple members, you can select partnership tax classification which will provide you with much flexibility in allocating profits and losses between members.
Electing the wrong tax classification may create unwanted problems for your new business. It can be costly and time consuming to change your tax classification with the IRS and the agency often requires you to wait until the following calendar year before the new tax classification takes effect. This can cost you thousands in tax liabilities that might have otherwise been reduced or avoided if you elected the appropriate tax classification for your business at the time of its formation.
At Tailored Legal, our business attorney can apply for and obtain a new Tax ID number and help you select the most favorable tax classification for your business. We will also utilize our trusted network of financial and accounting advisors to ensure the tax classification you select is appropriate for your type of business. Contact us for an initial consultation today to discuss the right tax classification for your business.