How to Setup a Sole Proprietorship in California | 9 steps to start a sole prop business in CA

[@ElizabethPW]

Not sure if you should have a sole prop or an LLC? Here's a vid for that: kzbin.info/www/bejne/a3TPcn2PjLl_iKM

[@lisacoris]

so helpful -thanks!!

[@rachel4241995]

So helpful, thank you :)

[@MiguelCastillo-qb9pv]

Can you make a video about paying quarterly taxes in CA (Franchise Tax Board) as a sole Proprietorship, please?

[@ElizabethPW]

How to do quarterlies is a great idea for a topic -- I'll add to my list

[@CHAPPAJANVISION]

Thank you Elizabeth, valuable information.

[@ElizabethPW]

Welcome!

[@ilovepodcasts248]

Even as a sole prop, it is overwhelming to get all the paperwork started. Same for the business license and seller's permit. I just want to sell things on eBay.

[@FraaracoDX]

Thanks! This video is very helpful and summarize a lot of things. Very complete compared to other videos I saw. Amazing job.

[@ElizabethPW]

Glad it was helpful!

[@GloryBeToGodForever]

Another great video. May *Christ* continue to give you knowledge and bless your business.

[@ElizabethPW]

I appreciate that!

[@sandysavard8030]

Another Great Video very great format!!. Thanks Again

[@ElizabethPW]

Thanks, great to hear!

[@ericvigen]

Very helpful video, Thank You Elizabeth!👋

[@ElizabethPW]

Glad it was helpful!

[@shannonallen1749]

Very helpful, thank you!

[@jamescardoza3582]

Thank you for your help

[@sandysavard8030]

Another Great Video...Thanks Again!

[@LisaNguyen616]

Do you have a video on how to change a Corp to sole proprietorship? If not, can you please create one? Would appreciate it greatly. Thank you

[@ElizabethPW]

Hm I have not done that yet but a good idea, both LLC and Corp to sole prop

[@williambreeze2659]

Thanks for the information 👍.

[@ElizabethPW]

Welcome! 👍

[@KristySBrooks]

Amazing video! Thank you ❤

[@ElizabethPW]

You're so welcome!

[@jalvarez242424]

Thanks for the videos. 😊

[@ElizabethPW]

Welcome!

[@CaseyOrozco]

awesome!!

[@ElizabethPW]

Thanks!

[@LearnGrow82]

@Elizabeth Potts Weinstein: Thank you for the videos. Can you please make a step-by-step video about how to setup sole proprietorship in general, regardless of the state?

[@ElizabethPW]

I'll look at that!

[@LearnGrow82]

@@ElizabethPW Ok.

[@barbaragalloway6190]

Excellent video! I’m starting a Sole Proprietorship and I don’t want my home address to be out there. I know you mentioned a couple alternatives. Which avenue would be the best in this case?

[@ElizabethPW]

For many things you can use a PO Box. But for some things (dba/fbn publication, business licenses) you may need to use a street address. Depends on the state/county/city -- some allow virtual mailboxes or co-working places to "count" as a street address, and some don't (they look up the address).

[@barbaragalloway6190]

@@ElizabethPW Thank you so much for your insight!!!

[@rodrigovelasquez9854]

Hello. Thank you so much for all of these helpful videos. I wouldn't have the slightest clue what to do otherwise. My question is about the DBA. I'm starting a mobile business and therefore got a PO box to use as the address for all my forms. The problem is that the DBA form that I'm filling out says "PO Box or Private Mailbox not allowed" where it asks for the address. Below that it does say "mailing address (if different form above)". Should I put my home address on the top section and my PO box on the bottom. Thank you!

[@ElizabethPW]

Right mailing address is the PO Box and home address is the location/street address (note - both addresses will be in the public record)

[@AbhishekVishwakarma-zu3vo]

Will you please list down the name of the licenses that are required for Consulting & Professional services.

[@ElizabethPW]

It depends on the type of business, what activities it is doing, and where it is located. Look at this video to get some ideas: kzbin.info/www/bejne/bKOpeZijhtaJibM

[@BookProX]

00:42 Forming the legal entity is automatic for a sole proprietorship in California. What does it mean by a legal entity is automatic? Say, if I have used my full name and SSN for a TIN to report any profits from ad revenue, then I don't need to file with the county? Thanks for sharing.

[@ElizabethPW]

If you use your full name and your SSN for the business, then you don't need to file something with the state to form the business, and you don't need a DBA. But you need to look at whether you need any business licenses or permits. The "automatic" part is the fact that your sole proprietorship exists automatically vs an LLC or corporation, where you have to file forms with the state to create them.

[@BookProX]

​@@ElizabethPW Thank you. However, I am still a little puzzled. What are the correct basic filing steps for legally obtaining a business license in Santa Clara County? 1. Check for a DBA on the Santa Clara County or City of San Jose website for the fictitious name availability I have chosen in my area/county? 2. Then, fill out the EIN papers on the IRS site, confident the DBA I've chosen is not used by somebody else. If I don't sell anything because I have an Affiliate Marketing income, do I need to fill out any forms with the City of San Jose, like a seller's permit?

[@ElizabethPW]

Yes search the DBA, get the EIN, and then get a San Jose business license (called a tax certificate) www.sanjoseca.gov/your-government/departments/finance/business-tax-registration

[@BookProX]

@@ElizabethPW Thanks. Problem solved! 🙂

[@barbaragalloway6190]

You have been so helpful!!! Where do you need to look to see if you need a sellers permit in your state if selling on Etsy or Amazon? Thank You!

[@ElizabethPW]

I'd start out by looking at Etsy and Amazon, and where they are already doing the sales tax for you (as they are marketplace facilitators). Here's info from etsy help.etsy.com/hc/en-us/articles/360000343968-How-US-State-Sales-Tax-Applies-to-Etsy-Orders?segment=selling and here is amazon www.amazon.com/gp/help/customer/display.html?nodeId=202211260

[@barbaragalloway6190]

@@ElizabethPW Thank You!!!

[@jacquelynalvarado9730]

So helpful thank you! Would I have to file for a DBA first then an EIN? Does the order matter?

[@ElizabethPW]

For DBAs it’s not that important if you get the EIN first or second

[@Shanaflea]

Love d you video. Thank u! I understand for a sole Prop you then do not need to file Articles of Incorporation with Secretary of State. Is that right?

[@ElizabethPW]

Correct, you don’t need to!

[@joshalee]

Hi Elizabeth. Great video from the legal perspective. I have been since January 2024 selling cards, collectibles, toys via Ebay and WhatNot and other app based platforms. Additionally, I have done a number of transactions privately using payment methods that accept CC's. I live in the East Bay (Alameda) and generate shipping labels and package from home, but technically can do it anywhere. I use my last name in the DBA, do I need to get a business license with the city (who requires a county DBA filing even if the last name is used) and seller's permit. I understand app platforms like Ebay cover the taxes, but what about these private transactions via PP or VM credit card? Additionally, I am venturing in providing services like preparation and assement of cards before grading as well as taking sports photography and making physical cards and albums. I'm expecting 1099K forms from the payment providers and the key is completing my Schedule C. Will state, county or local get triggered to ask me to permit?

[@blmmatter2882]

Hi Elizabeth, thank you for the great video , so what other insurance should a new attorney have aside from malpractice insurance ? Business insurance? Thanks!

[@ElizabethPW]

Yes you'd want general business insurance, covering general liability and also business property. You might get "business owner's" insurance which is a package deal that's good for one-owner businesses

[@blmmatter2882]

@@ElizabethPW you are the best! Thank you!!

[@sewing-seeds]

I hope you can help me understrand how to proceed. 🤷I have 2 questions in regards to "timing" and the California Franchise Tax of $800 dollars. As it relates to forming a Professional Corporation for Private Practice Therapists. -We filed with the state in October 2022. And all start up costs have been accruing since then. We qualify for the first year exemption to not pay that $800 dollars. Allso, we are not projected to start making a profit until the beginning of next year due to the credentialing process to get paneled. My question is: Q: When filing our 2022 taxes, which will reflect the remaining 3 months of this year, will are $800 dollar exemption be applied and used for that 3 month tax period? And as a result of that will we not be able to use that for next year when we most need it? Q: Should we be filing our taxes if haven't made any money? And if we should be filing, will we loose out on listing all of our start up deductions that would have gave us the benefit for that year of exemption? I know this is a complex question but I know you can help me understand what to do. I think the "timing" of it all was off by 3 months. I honestly just dont know, I could be wrong . To top it off we had an attorney file this and timing wasn't mentioned. But after learning so much from you, I think we should of waited. Your channel is a huge blessing...Thank you for all you do!! 🙏💗

[@ElizabethPW]

So the $800 exemption is not on regular income tax -- it about the minimum "franchise fee" tax for the corporation with the state. Normally the minimum franchise fee is due even if the corporation makes zero profits or even zero revenue, but as of now (2022) there's a first calendar year waiver of that minimum. Yep you get it only for the 3-month-year instated of a calendar year. Sorry that the lawyer didn't tell you about that!! I'd suggest speaking with a tax person who you will use for the S Corp taxes, so they can account for the start-up expenses in the best way for you and for how to handle this no-revenue year on your business tax returns -- the rules change often and sometimes it needs to be amortized over years but other times start-up expenses can be taken as a deduction when you start making revenue -- need to see how it applies to you.

[@sewing-seeds]

@@ElizabethPW You’re the best! Thank you so much for explaining this. You have a gift for teaching... God bless you and your family🙏🏼😁

[@bravomoneysign]

In California, do you need to have the DBA before the EIN? I always figured that you need the DBA first because I thought the FBN would be listed on the EIN or something.

[@ElizabethPW]

You can do it either way -- the DBA/FBN takes a while while the EIN can usually be done online instantly. Yes you'd put the DBA/FBN on the EIN but really that can be added in the next IRS tax filing, too.

[@HyzeFitness]

How do I learn which contracts would be the best fit for my business, The business I am trying to build is a Bubble Inflatable Prop for parties which could be used as a Photo Op Decorative Piece. What I am worried about is if the customer rents my inventory out and they for some reason sue me for slipping, or accidentally tearing my inventory or damaging it. I would love any help on where to find these contracts and what licences/permits I would need if any!

[@ElizabethPW]

here's a video I did on contracts: kzbin.info/www/bejne/hJ2pfImDrc5kmM0

[@fairygurl5448]

I’m trying to change the physical address where my business license form is mailed too. I don’t know if I contact the city or somewhere else? Thanks.

[@ElizabethPW]

For a business license in California, yes you contact the city

[@4n6iscool]

In the future I was thinking about starting a solo landscaping service to make some money during the week and on the weekend a solo hiking/fly fishing guide service. Could I do both of these under one business name?

[@ElizabethPW]

Yes, you can do that. Just be aware that each business is liable for the other business

[@KirstenS-w9t]

Thank you for the very informative video, Elizabeth! If I'm providing an online service (tutoring) and possibly some subscription products that are digital only (virtual games that cannot be downloaded) is any of this considered to be tangible and requiring a Seller's Permit?

[@ElizabethPW]

Currently not in California (but in some other places, yes)

[@KirstenS-w9t]

@@ElizabethPW Thank you so much for replying!

[@paulcarrasco1024]

During my California's seller's permit application, I'm being asked for my Merchant Card Processor Name & Merchant Card Processor Account. Can you please provide clarification or examples of this information. Much appreciated. Thanks

[@ElizabethPW]

The merchant account is how you accept credit cards, like PayPal, Stripe, Square, etc.

[@maryamiqbal341]

Hey Elizabeth, I want to start my business as a sole proprietor however I want to file for my DBA in Delaware, Kent county. I reside in CA however since it's a digital agency and I don't have a location I decided that it would be best for me if I file for DBA in Delaware also considering that if the business goes well the first year, I'll form a LLC in DE. The business consists of online services such as website design and development and paid advertisement on google and facebook. -Can I use a PO box address for my DE DBA application? - Do I require a business license as a sole proprietor in DE? -Would you I have to pay any other taxes in DE or have to do anything tax related there? I would appreciate any guidance you would be able to provide and everything I should be aware of before filing there.

[@ElizabethPW]

I'm not a lawyer in Delaware. But generally DBAs are based on where someone is doing business, and PO Boxes are not a location -- they typically want an actual location address. If someone says (in the DBA application you are swearing under penalty of purjery) that they are doing business in a state at a location, then typically they'd also need to get business licenses for that location.You'd need to talk to a tax person about the tax question. Note - I have never set up a sole proprietor DBA in a different state then someone's actual location -- if someone wants the business to be located in another state, we create an LLC or corporation

[@sniperfox0108]

First of all, thank you for this awesome video. I totally understand what a sole proprietorship is but I have one question about it. I am currently 17 years old and want to start a business in California. But I am underage, meaning I would have to use one of my parents information. If I am going to control all the business stuff, can I have it as a sole proprietorship but just under one of my parents names? Or would it have to be a partnership.

[@sniperfox0108]

Just a follow up about this question

[@ElizabethPW]

So if you are underage, yes an adult has to co-sign. They don't need to co-own it.

[@paulm.8613]

Hi Elizabeth, your video was very helpful. Question- I currently live outside California as an overseas expat wanted to choose a FBN to start a sole proprietorship that will be based in California when I return. Do I need a California maiiling address just to set up an FBN, because we are not there now and our house is rented? And second, if I have an FBN in Californian, can I take income in under that fictitious name and use the bank account set up for that purpose while I am outside of California as long as I pay the taxes due to all of the relevant jurisdictions? thanks!!

[@ElizabethPW]

You need a location address for the FBN filing, yes. You can set up a bank account but you'll probably need to use somewhere like www.mercury.com/ that doesn't require you coming there in person

[@hannahmaggio9357]

Hi Elizabeth! Thank you for creating these super helpful videos! I am looking for privacy policy and contract help. I see you have termageddon as the link for the privacy policy but it looks like I'll have to pay and it doesn't say how much. Is there another credible site that provides legal documents like contracts and privacy policies for free or for a small fee?

[@ElizabethPW]

They charge $12/month or $112 a year, which is probably the least expensive (that includes privacy policy, terms & conditions, disclaimers, etc.). Another option is www.uslegalforms.com/

[@Lucky223]

What if you want to do a sole proprietorship but rent and dont want the landlord or hoa involved? How can you avoid this? It would also be a service type business. Like would I need to rent an office or storage unit or something? I don't want to use a rental address as a business address

[@ElizabethPW]

You can get a PMB address (virtual mailbox) for most things. Check this out - kzbin.info/www/bejne/i4rMqWyCo5qdgcU

[@Lucky223]

Thank you

[@kera559]

What if I work in other people's home for my buisness? And on computer via telecofrence? (For reference, it's private dog training.)

[@ElizabethPW]

I'd form an LLC for dog training, and also have insurance & a good contract w/ liability waivers

[@dg5175]

1:30 So I'm filing for a DBA/FBN. I rent a small studio where I conduct business. Should I list my home address or business address? I don't want my home address to be available to the public, but I can't have things mailed to the place I'm conducting business so would my home address be what I list the business under?

[@ElizabethPW]

For the DBA/FBN, they are wanting you to list your actual street location, where someone can find you in person, doing the business. In some counties they also have a place for you to list a mailing address.

[@dg5175]

@@ElizabethPW What if I got a P.O. Box or a mail box from UPS? Could I use that instead or is it just better to list the address of the place of business?

[@ElizabethPW]

The DBA/FBN will get rejected if you use a PO Box. Sometimes they won't catch a virtual mailbox but technically it is supposed to be a street address.

[@TraceyCheung-tl7qd]

Thank you so much for creating these videos! I started an Etsy store August 2022 and am now looking at formalizing with an EIN, DBA and Business Registration. On my forms, should I backdate the start date to August 2022? or can I mark a date of Jan 1, 2023 for tax filing timing? my store did not generate much revenue.

[@ElizabethPW]

For your sole proprietorship, the start date was when you started (Aug 2022). You'd only pick a different date if you have a different entity, like an LLC or corporation.

[@karadanas8627]

Thank you for this wonderful video, Elizabeth! Qu for you: Are you able to use a "virtual address" service as a Sole Proprietor, and are you able to file a Trademark with the USPTO as a Sole Proprietor using that virtual address as the domicile address listed? I'm trying to file a TM asap with the USPTO as a Sole Prop, but I do not want my home address listed. I know as an LLC this is possible, but I wanted to check to see if it can be as a Sole Prop (Im not at LLC level yet). Thank you! :)

[@ElizabethPW]

For the trademark you can list a virtual address as your mailing address, but your "domicile" must be a real street address. They look up the virtual address so they will know if it is virtual. The good thing is that only your mailing address is in the public record -- the domicile is just in internal USPTO records.

[@melodybrown986]

Elizabeth, how do you get around the county req't for wet signature on the DBA application? I was at DBA STORE and almost went through wit $95 purchase fee but it would not allow me to sign this....Can you please explain how this site gets around that?

[@ElizabethPW]

We don't get around it, we sign it and mail it in

[@melodybrown986]

@@ElizabethPW I called and asked but was going crazy over the wknd. The site only mentions print and sign then return by mail on your confirmation page after paying. Would be great info upfront. Used the service and just like you said, easy and straightforward...just that detail bothered me though!

[@momentumiot_iot]

Great video! What if your nickname is in your company name? Would you still have to register that?

[@ElizabethPW]

In California, if the company name is your nickname and not your legal name, then you'd need to register the DBA/FBN.

[@dragonking8817]

How do I start up a po box for my sole proprietorship if the business hasn't been registered?

[@ElizabethPW]

Ah if you want the po box to be under your business name, you'd probably need to first get a DBA/FBN for that business name

[@dragonking8817]

@@ElizabethPW I found if I use an agent registry I can use their address instead of my personal address. I had no idea as I set up for sole proprietor

[@mrpink5290]

Hey Elizabeth, would you have to get multiple business licenses in separate counties if your virtual business address is not in the same city as your house? For context, want to start a remote online business that provides services as a sole proprietorship utilizing a fbn, problem being that my city does not have any virtual business addresses available. So I would like to use my virtual business address but it is not in the same city where I live. Any help would be much appreciated.

[@ElizabethPW]

Each city has their own rules, but generally it is more about where you are actually operating as your business

[@mrpink5290]

@@ElizabethPW Thank you Elizabeth, I actually received a response from my county about this, so thank you. I left another comment/question on your “which fbn/dba website to use” video. Thank you for your help

[@Inso-10]

Hey Elizabeth. Amazing video. Im startimg my own medical courier business and I know a DBA and EIN would be best for a Sole Proprietorship in Fresno County in CA. In your expertise, besides those 2 things, do I need any other licenses/permits or no? I apologize for bothering you. Thank you

[@ElizabethPW]

Well you need to look at your county / town to see if you need a business license (not sure if you are in an unincorporated area or a town) -- go on their website and look for stuff related to business or starting a business.

[@Inso-10]

@ElizabethPW Got it. Will do. Thank you so much. I appreciate your help.

[@ellelamere6298]

What if you had a dissolved LLC and are selling product after 2 years as a sole proprietorship?

[@ElizabethPW]

Assuming you shut down the LLC correctly / completely, then setting up the sole prop is the mostly the same. Some filings you tell them that you had a prior business but changed the entity (such as seller's permit)

[@CertifiedGameDev]

I am planning to sell independent video games online. I would like to use a separate name and bank account etc. Sole proprietorship with a DBA seems to be the right way. Was wondering if anyone had any other suggestions or ways to go about it. Thanks

[@ElizabethPW]

Yep that's the most simple and least expensive way. You could form an LLC if you are worried about liability/risk issues, but it would be more money and complexity

[@JMICTHEBRAND.]

So I am a sole proprietor, and I have a candle business named something other than my name so I thought I was supposed to file a fictitious business name with the California Secretary of State and my county and I did but now I’m getting information from people that I didn’t need to do that and that I don’t need an EIN for my sole proprietor ship business? But my bank required an EIN to open a business bank account same with proof of a fictitious business name, so what is correct here? Did I not need to register with the Secretary of State if I am a sole proprietor?

[@ElizabethPW]

No, sole props do not register with the sec of state in California. You can get a DBA (called an FBN - fictitious business name) with your *county* registrar's office. For the bank, really they make their own rules, and there is nothing wrong with having an EIN for a sole prop.

[@rawsunnata829]

I did not understand one thing. If I want to start my business , but I am married and my husband files our taxes then I must include his name in my new business?

[@ElizabethPW]

No you don't have to include his name in your business. However, in some states he may have rights about it (such as in community property states)

[@rawsunnata829]

@@ElizabethPW I live in California. Is this a community property state?

[@elainegabriel6932]

Hi! New subscriber here! Im a sole proprietor here in ID. I am in the process of getting a DBA for my online selling business. I have EIN and sellers permit. When applying for DBA, do i need to get a virtual address? I’m not sure if I should provide my one home address for my business. If I do get another business address, what website do you recommend to use? Can i use a PO box from post office? Thanks so much!!!

[@ElizabethPW]

The DBA is supposed to be on a physical location so you could just use your home address, yes

[@ulisesp1338]

Hello, I was wondering if I am able to use my location even if I am not the home owner. I rent, so would I need the approval of the home owner?

[@ElizabethPW]

It depends, some cities require the property owner to sign off on the biz license application, and some don't care

[@joem551]

Thank you for the great video. I'm debating between starting sole proprietorship and llc. My situation is that I don't have any assets and I'm single too, so no worries for spousal assets. I'm planning on moving out of California to the East coast permanently in a year or two. I already have an online side business(no website) where I sell both new and used items. I buy from wholesalers to sell for retail too. My side business brought me close to 10k revenue last year, but I want to put more time into it this year and scale it up. Should I get an LLC in California or just register for sole proprietorship with DBA/FBN, EIN etc, and wait until I generate more revenue and/or move to the East coast before registering for llc? What do you think? Thanks!

[@ElizabethPW]

Hm moving an LLC to another state is a bit of a hassle and tends to take a few months for all the paperwork to go through. I think it depends on how long until the move and how likely it will be. If someone knows they will move in the same calendar year, I may just have them set it up in the new state and start the LLC then. But if it is still a maybe and is more than a year, it may make sense to just set it up and switch it later. Now, for an LLC set up in the next few months in CA there's no franchise fee ($800) for 2023, so that does help make it easier, but would not help if the LLC is in CA for anytime of 2024 (would still owe the $800 for that year). It's not a clear answer either way, but hope that helps to get you started!

[@dajonay6792]

I'm going to be selling cosmetics, would I need any types of special licenses?

[@ElizabethPW]

Well it depends if you are just selling them or if you are also making them. There's government oversight on the safe manufacturing of cosmetics (and even more if they are "medical" cosmetics). For example, check out www.cdph.ca.gov/Programs/CEH/DFDCS/Pages/FDBPrograms/CosmeticSafetyProgram.aspx

[@macatherinehersheygarcia7375]

Hi! If I get an EIN for sole proprietorship, and the business eventually closed. Will I be able to get another EIN if I start a new one? Thank you soo much!!

[@ElizabethPW]

If you still remember the EIN for your sole prop, then yes my understanding is that you can use it for another sole prop in the future

[@ThatPartOfKristy]

If my business name only uses my first name but not my last, does this also mean I don’t need to file a fictitious business name? I assume it has to be a last name? Or…?

[@ElizabethPW]

Right it has to include the last name of the owner

[@YourNameHere1000]

Just to clarify... if I want to start a massage business that's just myself doing house call massages. I am automatically a sole proprietorship, but I may still need to get a business license depending on where I am in California?

[@ElizabethPW]

Right you may need a business license depending on the location, from the city or county

[@warclassics]

Hi Elizabeth, do you know if I need a business license if I open an Etsy shop in California and it's my only source of income? I don't need one in my city but I'm unsure if I'm required to have one from the state. I don't sell in person and only online.

[@ElizabethPW]

There's no state business license in CA

[@warclassics]

@@ElizabethPW Thank you! I've been going crazy about this for weeks because I thought there was a city as well as state business license. Needless to say, I feel silly but a weight has been lifted. As an Etsy seller I still have to file a sales tax report though right? Do you know where/how I can do that? Thank you so much for your help and great video.