3 Top Questions Answered about Starting a Business in Los Angeles

The business Economy in Los Angeles is as diverse as expected of a second most populous city. The city’s diverse economy provides many great opportunities, but not without a few challenges. There are lots of questions that entrepreneurs have to ask themselves before starting a business; this is what would come to mind while thinking about Los Angeles.

Los Angeles, being a city in the state of California, is a popular city for LLC and Incorporation formation in the US. The business ecosystem is diverse with a gross metropolitan product of $831 billion in 2008, and still at a rise, placing it as the third largest economic center in the world. Therefore before venturing into the business scene, one would have to be armed with the knowledge of what industries are thriving in the city.

L.A's entertainment industry is big; music, television, gaming and movies. This city has claimed its place in the world of fame, and is arguably its most prominent industry. L.A is also home to a rising technology industry, although this hasn’t always been the case. So you want to start a business in L.A? The three top questions asked by most entrepreneurs will be answered in this post.


Question #1 How do I reserve my company name in Los Angeles?

The organization of the business or company that you plan to start has to be done at the Secretary of State of California in Sacramento; this has to be done in person. The formation date of the business will be recorded as when the document will be received and accepted by the secretary of state.

 It is possible for the company to hire a messenger located in Sacramento in case the founders are not able to go there in person. The fee for the messenger is $20, in addition to the company organization fees that will be charged.

It is important to note that the name of the liability company may not contain the words:

•    Trustee

•    Bank

•    Incorporated

•    Trust

•    Corporation

•    Insurance Company


Any other words that suggest that it is in the business of issuing policies or insurance and assuming insurance risks should not be used.

There is a special handling fee or a preclearance. Expedited filing services are not applicable to documents that are submitted via mail. However, in addition to the time frames that have been specified in the previous year report, the secretary of state will offer a 4-hour expedited filing service for additional $500 to individuals who pre-cleared their documents. These are the individuals who submitted their documents for review in advance and then paid a special fee.


Question #2 How do I apply for a Federal Employer Identification number in L.A?

Get a lawyer to assist you in the process of obtaining this number for your business. Your business will have to apply for the FEIN that will be used for the tax and employer purposes. The founders will have to file an IRS (Internal Revenue Service) Form SS-4 that is available at the US IRS.

This process can also be done immediately if processed online or via telephone, and will take four business days if sent via fax, by mail the time frame for this process is 4 weeks.


Question #3 How do I Register for California State Sales Tax and Obtain a Sellers’s permit?

Businesses that are:

•    Engaged in business in California

•    Will make sales for a temporary period that will usually last no longer than 90 days at one or more locations e.g. a garage, or Christmas tree lots, must make sure that they register for a seller permit from the Board of Equalization.

•    Businesses that intend to sell or lease tangible personal property that would originally be subject to tax in case it was sold in retail.


A business may also make their registration online at the BOE website or in person at the BOE field offices. After registration, the BOE will assign a filing frequency based on the reported sales tax that might be quarterly or yearly.

Make sure you seek the help of a lawyer or attorney before pursuing any of the above processes. It is vital to get the best advice and ensure that all the legal proceedings have been followed to avoid legal complications in future.


Mollaei Law is a law firm specializing in business law serving businesses and entrepreneurs. We provide legal expertise in all stages of business development by drafting and reviewing contracts and agreements, assisting transactions and negotiating, forming LLC's and Corporations, registering trademarks and copyrights, business planning, and answering any legal questions you may have about your business.

Sam Mollaei, Esq., business lawyer, can be reached by email sam@mollaeilaw.com or via phone (818) 925-0002.