Adventures in Business Land

    “Or, How I Learned to Stop Fearing the Man and Start Selling Stuff.” That’s the subtitle of this post.

    This post about how hard and complex it is to do business in the United States, in California, in Costa Mesa. It’s a step-by-step process, a “How to form an LLC in California that is Legally Allowed to Sell Stuff.”

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    Step 1: Come up with a name that no one else has. Since LLCs are formed in the state you live in, there’s significantly less competition than there would be if it was the entire world.

    I already competed with the entire world when I registered the URL www.brandxindustries.com, so the hard work was already done. I check all URL availability at www.netsol.com, which is where Mark Zuckerberg registered Facebook.

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    Step 2: Once you have your URL, you can also check to see if your business name is available with the Secretary of State’s via their website. This site is also how the bank will verify that you’re actually a business, when you set up your business account.

    On the aforementioned link, you’ll see another link to a .pdf for form LLC-1. The cool thing about this form is that you can click in the spaces in the .pdf and fill them out. That goes for everything but the signature. Fill out that form and send it to the address on the form, along with a $70 fee.

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    Step 3: Register the business with the Department of Treasury. If that sounds like the den of a dragon, it’s because it is. You know this department by it’s more infamous name, the IRS. To do money stuff, receive funds, pay taxes, etc., you’ll need an EIN (Employer Identification Number). You get this via the IRS website.

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    Step 4: Once your business shows up on the SoS’s website, you have to go to a bank and set up a business account. According to the Security and Exchange Commission (SEC, if you’re into acronyms) it is illegal to do business banking from a personal account.

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    Step 5: When you get a reply from Step 2, which will be you filling out form LLC-1, it will come in the mail. It will also come with another form you have to fill out and return. That’s right. This form is paper and has to be sent via mail, like Form LLC-1. This form is LLC-12, which confirms your information with the Secretary of State: Statement of Information Unit. This form costs $20 and has to be filled out every 2 years.

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    Step 6: I registered my Brand X Industries LLC in California, since that’s where I do business. This means I’m subject to the Franchise Tax Board and their annual minimum fee of $800. If you’re doing business during a calendar year, you owe the minimum fee for that year, which is, yep, you guessed it, $800. It doesn’t matter if you only do business for a single day that year. The fee applies for that year. If you’re not like me and instead prefer planning ahead, start doing business January 1, and avoid paying extra.

    The only real good thing about the Franchise Tax Board is that they require you to pay 4 months and 15 days after the start of your business year. Ever wonder why everyone’s so concerned about April 15? Read it numerically, 04/15/year. It’s because of this.

    The Franchise Tax Board form that they need filled out is Form 3522 which is for the annual fee. You’ll need to fill this out each year, and pay the fee each year (see above paragraph). Form 3556 is pretty useful since it contains most of what you need to know. It seems a little repetitive, but I guess they’re really thorough about that kind of thing.

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    Step 7: In order to do business with the City of Costa Mesa, I had to fill out their Business License Application. Unless you live in Costa Mesa, like I do, you’ll have to fill out the local equivalent. It was easy and free and the city sent me my business license in 2 days (individual wait-time may vary).

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    Step 8: Since I work out of my apartment, Costa Mesa insisted I fill out a Request for Home Occupation Permit (which sounds suspiciously colonial, but I don’t make up the language here).

    That permit has a list of things you have to agree to, which, if you frame in it in your mind as if they’re things you’re neighbor has to do to run her business from her home, you’ll fully understand each point. Also, there’s a $50 non-refundable fee for Home Occupation Permit.

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    There might be more. The laws might have changed since I started my business. But this is what I found. I haven’t gotten arrested or investigated for fraud or any business-related wrongdoings yet, and I don’t suspect I will. That’s the whole list.

    There is one other part that’s pretty key to your business. Make and sell stuff people want. Otherwise, the Franchise Tax Board’s minimum annual fee will slowly bankrupt you.