Requirements for Setting up a Home-Based Business in California

Last updated on October 6th, 2022 at 03:19 pm


Financial freedom is everyone’s dream, and to achieve this, what better way than to start your own business from the ease of your home?

With the highest economic growth within California, a better connection in venture capital compared to any elsewhere in the country, and a great business climate, starting a new home-based venture in the Golden State is an ideal choice for entrepreneurs.

It is not easy to start a home-based online business in California on your own. There are a few footsteps you need to take. Your best partner in this complex journey will be a good internet connection if you want to start an online business.


You will be able to manage all the necessary online tasks when you have a strong, reliable connection for your home-based online business.

You must have a sufficient internet connection to upload videos and perform other tasks that may be necessary to run your business daily.

Your home-based business needs to be streamlined like any other. Here are some of the steps that you can take to get started with your venture:

Start with an innovative business idea

The First step in setting up your new home-based business in California, Texas, Utah, Colorado, or any state in the United States is deciding on the type of business you want to launch.

Find a business idea that fits your needs and goals, and most importantly, consider your inherent talents. This will allow you to stay focused when times get difficult and greatly increase your chances of success.

Also Read:  10 Factors Startups Must Consider When Choosing Business Location

Draft a Plan

Once you have decided on an idea, think about drafting a company plan to assess your odds of earning a profit. 

You should consider the type of business entity that will provide the kind of protection against liability you are looking for and also the most tax-efficient financial and financing advantages for your business.

Register Your Plan

When you have a plan, you’ll better understand the costs of starting up and your competition, as well as strategies for earning profits.

The lenders and investors will need to examine the business plan before offering the financial assistance you need. 

There are special variants of certain structures to consider, like limited partnerships and S corporations. You could prepare an outline before seeking funding.

Limited Liability Company (LLC)

You may choose sole proprietorship, partnership, or corporation as your legal structure but most home-based businesses go for LLC.

An LLC (Limited Liability Company) is something that, if you are contemplating starting a home-based business, might be the best option. It will be helpful if you get legal security at the initial stages of setting up your home-based business.

To set up the LLC for the home-based business you first need to have a name for the business that will be checked in the current database.

Next, you need to apply for state and local business permits and licenses for it to be recognized. Further, you need to select an LLC organizer and registered agent and finally, you need to apply for Articles of Formation. 

Name your business

You will have that your business name is distinct from the names of other business entities in your file of you.

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You must verify that your name is distinct from those of other business entities already on file California Secretary of State (SOS).

You can look up names that are available by performing a search for the business through the SOS website.

Check Zoning regulations and pick a suitable location

You need to check the zoning requirements of your town even if you are starting a home-based business in any of the 50 states across the U.S.

Also, check if the homeowners association rules if you are renting the house. If you start your venture without making sure no zoning law is being violated, your business can be red-flagged by officials.

See if your SSN is enough or if you require EIN

If your home-based business model is a sole proprietorship, you can get a license under your Social Security Number (SSN).

However, if you plan on hiring people, you need them to be registered with an EIN. An EIN is also called an Employer Identification Number or Federal Tax ID Number. Authorities like the IRS to identify your California Company for tax purposes utilize it.

Obtain the required permits and licenses

Next up is getting your license and business permits. To start a home-based business in California, obtaining a license or permit is mandatory.

In California, for instance, there are primarily two types of licenses one requires.  The General Business License (issued by the city) and Regulated Professions and Industries licensing (only required for specific businesses).


Now, this may be a very important requirement for your business. The California Department of Insurance offers many guidelines related to the type of insurance you’ll require for your business.

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Open a Corporate Bank Account

To get your business running, especially if you’ve created an LLC or corporation through opening a corporate bank account, apply for a business credit card.

Opening a separate business bank account will help track your expenses and income. It will also help in maintaining your liability protection.


Even if you are starting a home-based business, you can’t run everything all on your own. If you are planning to hire yourself or part-time employees for your company, the relevant state agencies may require you to register or obtain Worker’s Compensation or Unemployment Insurance (or both).


Once your business is in place, it is time to promote your business on social media. Also, make a marketing plan for your services and products, which focuses on your ideal customers.


Setting up your own business in the U.S. on your own might not be easy, but your passion is worth a shot.

There are certain requirements you need to fulfil; the above-mentioned guide hopefully helped you understand the requirements for you to progress in the right direction with your entrepreneurial goals.

Author’s Bio

Alex Marshall is a Content Strategist. He has been a content writer for almost a year offering guest posting and blogging services. He has been writing for Localcabeldeal for different internet service providers. He has written a lot of customer-focused content for Centurylink.

Centurylink is one of the greatest Internet service providers in the United States. It offers great internet deals at cost-friendly budgets and sold CenturyLink Internet deals at different places by ranking it on the top using the right keywords.

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By Bich Tran

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