SETTING UP BUSINESS IN CALIFORNIA: A GUIDE FOR INVESTORS

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<ul><li><p>8/14/2019 SETTING UP BUSINESS IN CALIFORNIA: A GUIDE FOR INVESTORS</p><p> 1/65</p><p>SSEETTTTIINNGG UUPP BBUUSSIINNEESSSS IINN CCAALLIIFFOORRNNIIAA::AA GGUUIIDDEE FFOORR IINNVVEESSTTOORRSS</p><p>A publication of:</p><p>California Labor &amp; Workforce Development Agency</p><p>September 2008</p></li><li><p>8/14/2019 SETTING UP BUSINESS IN CALIFORNIA: A GUIDE FOR INVESTORS</p><p> 2/65</p><p>Setting Up Business in California: A Guide for Investors</p><p>Page 2</p><p>Contents</p><p>INTRODUCTION.............................................................................................................. 4</p><p>CALIFORNIA BUSINESS INVESTMENT SERVICES .........................................5</p><p>PART 1: INFORMATION FOR FOREIGN INVESTORS........................................... 6</p><p>OBTAINING A VISA.............................................................................................6Nonimmigrant Visas ..................................................................................................7Immigrant Visas ........................................................................................................9</p><p>PART 2: REGISTERING A BUSINESS IN CALIFORNIA ...................................... 10</p><p>DEFINING AND REGISTERING BUSINESS ENTITIES....................................10</p><p>Sole Proprietorship..................................................................................................11General Partnership ................................................................................................11Limited Partnership ................................................................................................. 12Limited Liability Partnership (LLP) ..........................................................................14Limited Liability Company (LLC) .............................................................................16Corporation .............................................................................................................18</p><p>REGISTERING A FICTITIOUS BUSINESS NAME............................................21FILING FOR LOCAL LICENSES AND PERMITS..............................................22REGISTERING A COMPANYS TRADEMARK AND SERVICE MARK............22REGISTERING FOR BUSINESS TAXES ..........................................................23</p><p>PART 3: OPERATING A BUSINESS ........................................................................ 27</p><p>GETTING LOANS AND FINANCIAL ASSISTANCE .........................................27Commercial Financial Institutions............................................................................27Venture Capital .......................................................................................................27Government Sources ..............................................................................................27</p><p>OPENING A BANK ACCOUNT..........................................................................28SELLING MERCHANDISE.................................................................................30</p><p>Sellers Permit .........................................................................................................31</p><p>MANUFACTURING PRODUCTS.......................................................................32Permits ....................................................................................................................32</p><p>PART 4: ADMINISTERING EMPLOYEES ................................................................ 33</p><p>COMPLYING WITH EQUAL EMPLOYMENT OPPORTUNITY LAWS ..............33Employee Rights.....................................................................................................33At-Will Employment and Wrongful Termination....................................................... 35Employee Safety and Health Protection.................................................................. 36</p><p>PROVIDING EMPLOYEE BENEFITS ................................................................38Vacation ..................................................................................................................39Holiday ....................................................................................................................39Personal Days And/Or Floating Holidays................................................................40Sick Leave...............................................................................................................40</p></li><li><p>8/14/2019 SETTING UP BUSINESS IN CALIFORNIA: A GUIDE FOR INVESTORS</p><p> 3/65</p><p>Setting Up Business in California: A Guide for Investors</p><p>Page 3</p><p>Paid Time Off ..........................................................................................................40Medical, Dental And Vision .....................................................................................41Retirement...............................................................................................................41</p><p>ESTABLISHING WAGES AND HOURS ............................................................42Sources Of California Labor Law ............................................................................42Sources Of Federal Labor Law ...............................................................................42</p><p>Fair Labor Standards Act ........................................................................................42Wage Rates ............................................................................................................44</p><p>FILING EMPLOYMENT TAXES.........................................................................45State Of California...................................................................................................45</p><p>U.S. FEDERAL GOVERNMENT ........................................................................50Income Tax .............................................................................................................50</p><p>OBTAINING WORKERS COMPENSATION INSURANCE...............................52FINDING EMPLOYEES......................................................................................55</p><p>CalJOBSSM..............................................................................................................56Listing Job Openings...............................................................................................56California's One-Stop Career Centers.....................................................................57</p><p>HTTP://WWW.EDD.CA.GOV/ONE-STOP/PIC.HTM. .............................................. 57</p><p>PART 5: PHYSICALLY SETTING UP AN OFFICE OR FACILITY....................... 58</p><p>LOCATING AN OFFICE OR FACILITY .............................................................58ACQUIRING OFFICE MANUFACTURING EQUIPMENT ..................................59OBTAINING OFFICE/FACILITY INSURANCE ..................................................59MAKING USE OF GOVERNMENT INCENTIVES..............................................59</p><p>OTHER RESOURCES .................................................................................................. 60</p><p>AGENCIES AND ORGANIZATIONS .................................................................60State........................................................................................................................ 60</p><p>Federal and National...............................................................................................60PUBLICATIONS.................................................................................................62Business Start- Up Kits ...........................................................................................62Taxes ......................................................................................................................62Product Classification.............................................................................................. 63</p><p>APPENDIX I: CALIFORNIA INVESTMENT GUIDE ................................................ 65</p></li><li><p>8/14/2019 SETTING UP BUSINESS IN CALIFORNIA: A GUIDE FOR INVESTORS</p><p> 4/65</p><p>Setting Up Business in California: A Guide for Investors</p><p>Introduction Page 4</p><p>Introduction</p><p>SETTING UP BUSINESS IN CALIFORNIA: A GUIDE FOR INVESTORSwasprepared especially to:</p><p> Outline and briefly describe the general procedures for establishing abusiness in California;</p><p> Provide links to forms that may need to be filed to legally set up andoperate a business in California; and,</p><p> Serve as a resource guide to the several government and affiliatedagencies and organizations that a business may contact in theestablishment process.</p><p>California has numerous government agencies, boards and offices with which abusiness must interact. The number of government entities, along with their ownregistration and filing requirements, may seem overwhelming at first. The goal ofthis booklet, therefore, is to present an orderly, functional approach to theservices offered and/or filings required by the government entities and theirrelationship to the business investor.</p><p>This booklet was compiled and produced by the California Labor &amp; WorkforceDevelopment Agency, and is replete with information contributed from manyCalifornia and United States agencies, offices, and other organizations. Thesegroups made every effort to provide the most current information and instructionstailored to the needs of business investors.</p><p>The result is this collection of resources and information that aims to assist theinvestor in understanding business practices, registration requirements and filingprocedures necessary to successfully register and operate a business inCalifornia. Sources should be contacted directly or through the Internet beforeaction is taken to file or register, as fee amounts, forms and registrationrequirements may change.</p></li><li><p>8/14/2019 SETTING UP BUSINESS IN CALIFORNIA: A GUIDE FOR INVESTORS</p><p> 5/65</p><p>Setting Up Business in California: A Guide for Investors</p><p>California Business Investment Services Page 5</p><p>California Business Investment Services</p><p>California Business Investment Services (CalBIS), in the California Labor &amp;Workforce Development Agency, serves as the principal state office responsiblefor promoting and advancing domestic and foreign investment in California.</p><p>CalBIS provides confidential consultation to employers, corporate real estateexecutives, and site location consultants considering California for new businessinvestment and expansion.</p><p>CalBIS professional project managers provide tailored site selection servicesfree of charge.</p><p>Contact CalBIS at:</p><p>CalBIS801 K Street, Suite 2100Sacramento, CA 95814Tel: (916) 322-0000Fax: (916) 322-0614e-mail: CalBIS@labor.ca.govWebsite: http://www.labor.ca.gov/CalBIS</p></li><li><p>8/14/2019 SETTING UP BUSINESS IN CALIFORNIA: A GUIDE FOR INVESTORS</p><p> 6/65</p><p>Setting Up Business in California: A Guide for Investors</p><p>Part 1: Information for Foreign Investors Page 6</p><p>Part 1: Information for Foreign Investors</p><p>OBTAINING A VISA</p><p>In preparing for a journey to California, the foreign investor will need to obtain aUnited States visa. U.S. visa considerations require careful planning well inadvance of travel because processing times can be lengthy. The State ofCalifornia is not involved in the issuance of visas. Necessary forms and filingprocedures are supplied by the in-country U.S. Embassy. Address and contactinformation for U.S. Embassies around the world can be found on the Internet atthe website: http://travel.state.gov/travel/tips/embassies/embassies_1214.html.</p><p>It is highly recommended that a California-based immigration attorney beconsulted to clarify which type of visa may be most appropriate for the individual</p><p>and the company. The immigration attorney should be one located in the samecounty where the foreign investor will reside. Immigration attorneys are generallylisted in the Yellow Pages of the local telephone directory under attorneys,immigration. Another resource is:</p><p>American Immigration Lawyers Association918 F Street, NWWashington, DC 20004-1400Tel: (202) 216-2400Fax: (202) 783-7853Website: http://www.aila.org</p><p>The threshold question for employees to be transferred to the United States iswhether they are classified as nonimmigrantsor immigrants. Nonimmigrantscome to the United States temporarily to carry on activities in accordance withthe terms of a nonimmigrant visa. Immigrants enter the United States under animmigrant visa and reside here indefinitely in lawful permanent resident status(evidenced by a green card). Information regarding the different visa types isavailable online from the U.S. Department of State at:http://travel.state.gov/visa/temp/types/types_1286.html.</p><p>Changes introduced shortly after September 11, 2001, involve extensive andongoing review of visa issuing practices as they relate to our national security.Visa applications are now subject to a greater degree of scrutiny than in the past.It is important to apply for your visa well in advance of your travel departure date.</p><p>The following is a summary of the requirements of certain nonimmigrant andimmigrant visas. Depending on the persons involved and the length of theirprojected stay in the United States, visa requirements vary.</p></li><li><p>8/14/2019 SETTING UP BUSINESS IN CALIFORNIA: A GUIDE FOR INVESTORS</p><p> 7/65</p><p>Setting Up Business in California: A Guide for Investors</p><p>Part 1: Information for Foreign Investors Page 7</p><p>NONIMMIGRANT VISAS</p><p>Temporary Visitor for Business (B-1)</p><p>B-1business visas are available to persons coming to the United Statestemporarily to conduct business on behalf of their foreign employer. They may</p><p>not engage in local labor for hire, must be compensated by their foreign employer(expenses are permitted) and must maintain a permanent residence overseaswhich they have no intention of abandoning.</p><p>B-1visa holders may be admitted for an initial period of up to one year, and maybe granted extensions in six-month increments. Under a special program fornationals of certain countries, the Visa Waiver Program allows business visitorsto apply for admission to the United States without a visa for up to 90 days, withcertain restrictions applied. Visit the Visa Waiver Program to learn more, and findout if you meet the visa waiver requirements.</p><p>The federal government has established a Business Visa Center, athttp://travel.state.gov/visa/temp/types/types_2664.html, to assist with obtainingB-1 visas.</p><p>NOTE: Representatives of the foreign press, radio, film, journalists or otherinformation media, engaging in that vocation while in the U.S., require anonimmigrant Media (I) visa and cannot travel to the U.S. using a visitor visa andcannot travel on the visa waiver program, seeking admission by the DHSimmigration inspector, at the U.S. at the port of entry. Visit the Visa WaiverProgram to learn more.</p><p>Treaty Trader and Treaty Investor (E-1/E-2)</p><p>Treaties between the United States and many countries allow foreign nationals tocome to the United States to conduct trade or to manage substantial investments(no fixed dollar amount). Those qualifying for the E-1(Trader) or E-2(Investor)visas can pursue long-term business objectiv...</p></li></ul>