Planning to start a business in The Golden State? If so, one of the first things you’ll need to do is come up with a business name. This important first step toward entrepreneurship comes with a few rules. California, like most states, won’t let you pick any name you want and register it with the state. The name you want must be available in California. To find out a name’s availability, you’ll conduct a California business name search.
We’ll explain how a business search works and provide some tidbits and tips to get your LLC off the ground in California.
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How to check business name availability in California
As mentioned, you can’t just pick any name for a California business, it must be unique and available. How do you find out if a certain name is available? Here’s how:
1. Go to the California Secretary of State website
The California Secretary of State website has a simple search tool that you can use to check name availability.
2. Select your search terms
To conduct the search, you’re asked what kind of search to run. You’ll choose between corporation or LLC. You’ll pick the type of business that you plan to set up.
3. Enter keywords
Next, just enter your proposed name in the search bar.
You can refine the search terms by selecting: Keyword, exact, or begins with. If you have a particular name in mind, select ‘exact’ to see if there are businesses with that exact name.
4. Run the search
Next, just click ‘Search.’ The site will return results that have an exact match. If there’s an exact match, the name is not available. If there’s no match, the name is available for you to use.
California law says no two businesses in the state can have the same name, so you should keep searching for names until you find one that’s available.
5. Consider reserving a name
After running a California business name search, you have two options: You can reserve a name or you can register the name. You should reserve the name if you aren’t planning to set up the business immediately.
California allows business owners to reserve a name for 60 days for $20. ($10 fee + a $10 handling fee).
To do so, you’ll fill out a quick form and provide the payment.
Again, you don’t need to reserve a name if you plan to officially set up your business with the state of California, but if you’re just doing some homework and plan to set up your business later, reserve the name now so it’s not taken when you’re ready.
6. Check domain name availability
We created a tool that makes it easy.
How to name your California business
Now that you know a little more about the business landscape in the state, it’s time to start generating a list of names for your business. To do so, follow these steps:
1. Write down basic details about your business
Start by creating a verbal picture of your business. Think about what your business will offer and who it will serve. Will you sell a specific product or service? Who’s going to buy it? Jot down a few details about your company as a starting point.
Next, start creating a list of adjectives that describe your business. Think in terms of keywords. What keywords would your customer use to find the product or service that you offer? Write them down.
2. Stay away from initials and hard-to-say words
There are plenty of businesses that include initials, like A&J Plumbing, but consider upping your game with something a bit more creative and descriptive.
The same goes for names that are hard to say. If your last name is Stackowaski, for example, it’s not conducive to a business name because it’s too hard to pronounce.
3. Don’t pigeon-hole your business
Be careful not to select a name that limits your company’s potential growth. Think about where your business will be in five, ten, even twenty years, and take that into consideration when creating a name.
A company named Bob’s Bargain Books, for example, is a good name, but what if they plan to sell vintage records and cassettes down the road? The name only refers to books, so when vintage music is added people won’t associate it with the store.
4. Consider using a name generator
At this point, you probably have a list of a few ideas. Rather than brainstorm a bunch of different combinations, why not try a name generator? You simply enter a few of the adjectives that you came up with into the search bar and you’ll get a list of possible names.
Name generators can take some of the hassles out of creating a name. Most name generators will only show you available names too, which is helpful.
Check out some of Namechk’s name generators below:
What kind of business structure is right for your California company?
As you research available business names in California, you’ll also want to think about what kind of business you want to establish. There are a handful of options to choose from, but some of the most common are Sole proprietorship and LLC.
- A sole proprietorship is ideal for small businesses with no employees that want to test their business out. There’s virtually no paperwork to set up this kind of business, which is a plus. However, a sole proprietorship is not a separate business entity, which means you’re financially and legally responsible for any problems that might arise.
- An LLC, or limited liability company, provides a certain amount of liability protection. Your personal assets and your business are separate with this business structure, which means if the business is sued or goes bankrupt, you will not be forced to use your personal cash reserves to bail the business out.
Steps to register your California business
Ready to set up your business in CA? Here’s what you do:
1. File your Articles of Organization
Visit the California Secretary of State website and fill out the Articles of Organization. To fill this out, you’ll need to have an available business name, address, and contact information.
2. Name a registered agent
You’ll also need to name a registered agent. A registered agent is the point-person for your company who will receive important documents like tax notices or legal documents.
A registered agent must be trustworthy and be available during regular business hours when documents are delivered. The business owner can serve as the registered agent in California, or another person or company can be named.
You might decide to name your accountant or co-founder, for example. You can also hire a registered agent service to serve in this role. Northwest Registered Agent, ZenBusiness, and Bizee are a few examples. These companies will receive documents on your behalf and notify you of their arrival.
3. Pay the filing fee
Every state charges a filing fee to file LLC formation documents with the government. In California, the cost is $70.
4. Wait for approval
California will review your application and typically provides approvals within five business days. Once approved, your business is officially set up.
Our picks of the best registered agent services
California small business facts
Before you start considering business name availability in California, take a look at these small business statistics from the U.S. Business Administration:
- California is home to 41 million small businesses, which employs 7.2 million people, or 48.5% of the state’s workforce.
- Firms with fewer than 20 employees have the largest share of small business employment.
- In April 2020, the unemployment rate was 15.5%, up from 4.2% in April 2019. This was above the April 2020 national unemployment rate of 14.7%.
- The top five industries with the highest employment are: Accommodation and Food Services, Health Care and Social Assistance Professional, Scientific and Technical Services, Construction, and Retail Trade.
FAQs
To further help entrepreneurs, check out these frequently asked questions about starting a business in California:
Why is it so important to check on business name availability?
California will not allow two businesses in the state to have the same name. There are many reasons for this, but at its core, it’s to avoid any confusion. For example, if someone plans to sue Bob’s Fruit Stand and there are two of these companies in the state, things can get complicated quickly.
All businesses must have a unique name. And, you can’t just add a hyphen to a name to make it different. Each name must be “distinguishingly different.”
Does California have an annual LLC tax?
Yes. California charges all LLC owners an $800 annual tax. The state requires all businesses to pay the annual franchise tax by the 15th day of the fourth month of each taxable year.
However, the state’s governor just signed legislation that waives this fee for any business that is established between 2021-2024. This effort is meant to encourage people to start a business amid tough economic times brought on by COVID-19.
The tax is only waived for the first year. After that, the tax is due annually.
Does California require an operating agreement?
No. California does not require you to submit an operating agreement to set up a company in the state. However, just about every business expert will tell you it’s a good idea to create one. An operating agreement, as the name suggests, explains how the company will work. It provides an in-depth look at its daily operations, who’s in charge, and how profits and losses are managed.
An operating agreement is usually created during the infant stages of a business and updated as the business grows.
While the document isn’t something you have to submit to the California state government, it’s not something you should skip. A lawyer can help you draw an agreement up or you can always find a template online to get started.
Are there financial assistance programs for startups in CA?
Yes. Like many states, California has put several funding streams in place to help new entrepreneurs. Check out this list of financing options, which includes financing for businesses in rural areas, companies that focus on energy reduction, and assistance for those in the healthcare industry.
You might also consider looking at federal loans or grants. You can search for opportunities on USA.gov. Although, be aware that the application process can be lengthy and the competition is fierce.
How do you dissolve a business in California?
While you’re focused on starting a business, it’s still a good idea to know what the process is to dissolve a business – just in case things happen.
To dissolve a business in The Golden State, it’s a multi-step, multi-agency process. The business must pay all past tax debts, file a final tax return with the state, and notify certain agencies of the closure. The State of California Franchise Tax Board has step-by-step information on its site that owners should reference.
Why is it so important to notify the state? One of the biggest reasons is to stop paying the annual $800 LLC tax. If that state doesn’t know that your company isn’t in existence anymore, you’re still responsible for that annual fee.
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