Why Entrepreneurs in California Need a Lawyer

Why Entrepreneurs in California Need a Lawyer

Carrie Pallardy
Carrie Pallardy
 | 
With Silicon Valley and major cities like San Francisco and Los Angeles, business is booming in California. Entrepreneurs are attracted to the state, which is the largest economy in the United States and a massive hub for small businesses. There are approximately 4 million small businesses employing more than seven million people in the Golden State.

While California is ripe with opportunities, pursuing entrepreneurial dreams here is not without challenge. The state has a complex set of regulations and business laws that entrepreneurs need to consider when setting up shop. How can a lawyer help?

Establishing a Business
The first step toward establishing your business in California, or any other state, is forming a business entity. Depending on your business, you may want to form an LLC or a corporation. A lawyer can help you determine the business structure that makes sense for your entrepreneurial venture.

Once you determine the right business structure, you will need to come up with an official name, file paperwork with the California Secretary of State and pay the necessary filing fees. A lawyer can help you find a unique name for your business, establish an operating agreement and file your business’s articles of organization with the state.

Your lawyer can also walk you through the process of applying for and obtaining the proper permits and licenses, which are required for many businesses to operate legally in the state.

Taxes
The cost of living and doing business in California is high. Businesses operating in the state are subject to some of the highest taxes in the country.

Business owners are obligated to pay federal taxes, as well as the state’s taxes. California business income can be subject to corporate taxes, franchise taxes and alternative minimum taxes. Your lawyer can help you understand which taxes, one or all, apply to your business.

Employees
If you intend to hire employees for your business, you have a whole set of complex federal and state laws governing employee hiring, benefits, pay and rights.

Assembly Bill (AB) 5 is one of the more recent employment laws to pass in California, and it is an important one for entrepreneurs to understand.

This legislation is commonly referred to as the “gig worker bill.” It went into effect at the beginning of 2020, and it governs how companies can classify independent contractors and employees.

When hiring for your company, this law will guide who you can treat as an independent contractor and who is an employee with the right to benefits and employee protection. A lawyer can help businesses navigate this legislation and other business laws governing the employer and employee relationship.

A lawyer that specializes in commercial law can help California entrepreneurs understand and keep up with their legal and financial obligations to the state. Compliance helps to keep your business running smoothly.


This article is intended to convey generally useful information only and does not constitute legal advice. Any opinions expressed are solely those of the author, not LawChamps.
 
Carrie Pallardy

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