A vital preliminary stage of building your business consists of locating and obtaining the series of local, state and federal licenses and permits required by law. The regulations concerning your specific business can vary dramatically from state to state. Visit the local Business Resource pages for your state from the list below for a detailed account of requirements you need to fulfill and step-by-step procedures to carry out to ensure your business remains legally compliant. With all the information you need in one place, you can save your company time and money.
Employer Identification Number (EIN): All employers who have employees, including business partnerships and corporations, must be assigned an Employer Identification Number (EIN) or Employer Tax ID from the United States Internal Revenue Service, sometimes referred to as a Form SS-4.
U.S. Internal Revenue Service Phone: 1-800-829-4933
Guide to the Employer Identification Number
Apply Online
California Tax Registration: Those businesses operating within the state of California are additionally required to register for more specific identification numbers, licenses or permits for different tax purposes. Examples of these include income tax withholding, sellers’ permits for sales and use tax, and unemployment insurance tax. Contact the California Tax Service Center for more specific information regarding business owner tax obligations and registration procedures.
General Business Licenses: The CalGold database provides business-specific information regarding permit, license and registration requirements through an extensive collection of links links and contact information.
The local government in your area, such as that of your city or county, may require specific permits and licenses. Each municipality may have its own unique regulations. Here are some of the most common licenses and permits you may need.
Businesses which operate as corporations, limited liability companies (LLC), a partnership (either limited or limited liability) or who are a non-profit organization need to register with the state. Forms and applications can be found here: Business Entity Registration – Forms and Applications
Businesses which claim sole proprietorship do not need to register with the state. However, in California, sole proprietors wishing to do business under a name which is different from the proprietor’s legal name will have to file a DBA (see Step 5 below).
Filing for a fictitious name allows the creation of a business name which is then separate from your legal name. This is called Doing Business As, or DBA. Sole proprietors wishing to do business under a business or company name which is different from the proprietor’s legal name will have to file a fictitious name with their county registrar at the county clerk’s office. Partnerships, corporations, or LLCs may also choose to file a DBA.
There are several registration requirements for businesses which have employees: Withholding Income Taxes: The IRS requires that records of employment taxes be kept for at least four years. An overview of employer responsibilities regarding the withholding of federal taxes is provided in the IRS Employer’s Tax Guide publication.
Federal Income Tax Withholding (Form W-4): All employees must fill out an exemption certificate for their employer (Form W-4) either on or before their start date of employment. The employer is then responsible for submitting the W-4 to the IRS for verification.
Federal Wage and Tax Statement (Form W-2): Employers must report annually to the IRS the wage and tax information which has been withheld for all employees. This report is filed using Form W-2, Wage and Tax Statement. A W-2 must be completed for each employee by January 31 each year. Copy A of the W-2 Form must be sent to the Social Security Administration (SSA) to report employee wages for the preceding year. Additional Employer W-2 Filing Instructions and Information are provided by the Social
State Taxes: The requirement of state tax withholding varies depending on where employees are located. Visit your state tax agency for further information. California businesses are required to register with the Employment Development Department (EDD) in order to file reports and pay taxes.
Employee Eligibility Verification (I-9 Form): Federal law requires that employers verify work eligibility in all employees hired after November 6, 1986. Proof of eligibility to work in the United States must be completed within three days of hire by completing the Employment Eligibility Verification Form, commonly referred to as an I-9 form. Form I-9 must be completed for both citizens and non-citizens. Instructions for Completing the I-9: Handbook for Employers Download Form I-9 (Employment Eligibility Verification)
New Hire Reporting: Employers are required to declare all newly and re-hired employees within 20 days of hiring. This information should be submitted via the State of California New Hire Reporting Program.
Insurance Requirements: The State of California requires businesses to carry certain kinds of insurance. The Employment Development Department (EDD) administers California’s Unemployment Insurance and State Disability Insurance (including Paid Family Leave), as well as payroll and income tax withholding.
Disability Insurance: Temporary disability insurance benefits provide payment to workers, if needed, due to a non-work related illness or injury. Employers are responsible for deducting this tax from employee wages and reporting taxes to the state. More information regarding various kinds of disability insurance can be found at the State Disability Insurance web page.
Unemployment Insurance Tax: Businesses are required to pay unemployment benefits to eligible employees. More information regarding unemployment benefits can be located on the Unemployment page of the State of California Employment Development Department.
Worker’s Compensation Insurance: A Worker’s Compensation claim can be filed by employees who are injured on job. The California Department of Industrial Relations provides a list of frequently asked questions regarding Workers’ Compensation coverage for employers.
Alaska Business Resource:
http://www.sba.com/alaska/
California Business Resource:
http://www.sba.com/california/
Florida Business Resource:
http://www.sba.com/florida/
New York Business Resource:
http://www.sba.com/new-york/
Oregon Business Resource:
http://www.sba.com/oregon/
Texas Business Resource:
http://www.sba.com/texas/
