Question by curiouscale: Which State should I apply for a Business License?
I am starting an online business where staff rate their agencies… In the long run I may provide staffing services where I help staff find jobs. As of now, the site will be low-key. Is there a state you can recommend that I would save money in? I currently reside in CA. Do I have to apply for a business license in CA if its an online business?
Answer by jerry-the-bookkeeper
Because California drives the economy of the western United States and has what many feel are excessively high taxes on out of state business operations within the state of California (a situation which will probably get worse due to the state’s financial crisis) I believe your best alternative is to license your business in California.
Something to be aware of is California’s minimum tax on Limited Liability Companies (I understand it is currently $ 800 per year) which may make it more desirable to operate as either a sole proprietorship or an S-corporation.
Given that you want to keep costs down and the nature of your business I think you would be best off operating as a sole proprietorship with you as the proprietor DBA your company name. That way when you get big enough you can “sell” your company to your LLC or Corporation and continue doing business with a minimum of disruption.
Good luck in your new enterprise
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