California is the proud home of 4.1 million small businesses comprising the majority of all businesses in the state. Of course, California is also home to some of the biggest businesses in the country—a glance at Silicon Valley is a tour of who’s who in Big Tech. Either way, business prospects are looking up despite a grim economy, with a 21.7% increase in the number of business licenses filed.
But whether you are a two-person store or a Big Tech player, you need to know your way around business law in California.
Here is a quick and easy guide to the basics of business law in California, and a breakdown of what business owners need to know before breaking into business in this great state.
What is Business Law?
Business law is a huge, diverse subset of the law. It covers every aspect of the law related to starting, opening, running, and closing a business. If you hope to start a business in California, business law governs how you do it.
For example, business law dictates how you can organize your company. It governs how you pay your employees. In some cases, it may even set the rules for how you can ship products. Regardless of whether you are a neighborhood Mom-and-Pop or a Fortune 500, you are subject to many of the same business laws.
California’s Basic Business Laws
California business laws are usually shaped by statutes and state courts, though voters have some say. In 2008, for example, California voters voted to approve a high-speed rail project and raise standards for livestock confinement, both of which have major implications for businesses.
For many California businesses, taxes are a major concern (after all, California taxes are notoriously high). Business tax regulations are spelled out by the California Department of Taxes and Fees Administration. In simple terms, if you do business in California, you are subject to California tax laws.
You are viewed as “doing business” in California if:
- You are organized in California
- You are commercially domiciled in California
- You engage in any transaction in California for the purpose of financial gain
- Your California payroll, tax, or property exceed certain yearly amounts
For businesses who only do business in California to solicit the sale of tangible personal property to California customers, Public Law 86-272 applies to you.
Unique Features of California Business Law
For business owners, California is also home to several unique business laws and new changes coming into effect this year. Like the minimum wage hike to $14 per hour, or Senate Bill 1383, which will expand 12-week family leave to include small companies with five or more employees. Of course, since we are still in the era of COVID-19, there is also Assembly Bill 685, which requires employers to notify employees within 24 hours if a colleague tests positive.
Those are just a taste of the many new business laws arriving on the California docket this year. That is on top of the usual business legal issues, like hiring practices that are compliant with state and federal law, choosing a business structure, or protecting valuable intellectual property.
Your Expert Partner in California Law and Local Business Rules
In short? Business law in California is challenging—but you have to navigate it successfully in order to do business in the state.
That is where we can help, with expert business legal advice that allows you to make informed decisions for your best interests. From starting a business to business succession to legal contracts, we know our way around the law.
So if you need an expert attorney to protect your business interests, get in touch today to learn more about how we can help.
