Getting Your Small Business Started as a Sole Proprietorship (DBA)

Written by: Andrew Gale - Orange County - Small Business Attorney

Legal advice for starting a sole proprietorship in California

If you’ve decided to start a business, you may not be aware of all the legal requirements. The state, county, and city all make laws affecting businesses, no matter how large or small. Even if you choose to open a small business, the regulations can be daunting. You may not know what to do first or how to get started.

If you’re thinking about starting a business as a sole proprietor, or DBA, there are four basic steps you can take to get your company started on solid ground. Following these steps will help you avoid problems and additional costs that might arise if you skip them. So what are the steps?

1. File for a fictitious business name.

A fictitious business name is a business name that doesn’t include your surname. So if you’d rather not use your surname in your business name, you must file a fictitious business name statement. File it in the county in which you plan to run your business.

Your fictitious business name must be published in a newspaper of general circulation. The newspaper you choose will provide proof of the published name.

2. Get a Federal Tax ID number from the IRS.

While a Federal Tax ID is not a legal requirement, it’s highly recommended. Without one, you’ll need to use your Social Security number for documents related to your business.

3. Open a bank account from a bank that specializes in business.

Opt for a business bank instead of the bank you use for your personal checking or savings account. A business bank offers services that make them the key to your success.

4. Get a business license from the city where you run your business.

This is the last step, but it’s an important one. Without the required licenses or permits from the city, you could face stiff fines or penalties.

Many entrepreneurs start out as sole proprietors. As their companies grow, however, they find that incorporating their small business becomes a necessity. A corporation offers tax advantages and personal liability protection that sole proprietorships don’t provide. Talk to a California business attorney to learn more.  A corporate attorney can answer any questions you may have and provide guidance specific to your business.

Visit How to Start a Sole Proprietorship in Orange County to learn more about the steps required to get your small business headed in the right direction.