How To Register as A Sole Prop in California

A Step-by-Step Guide to Getting Your Business Officially Set Up

Starting a business as a sole proprietor is one of the simplest ways to get up and running in California. It’s ideal for freelancers, consultants, and small business owners who want full control with minimal paperwork. Here’s a clear, step-by-step guide with direct links to help you register properly — and avoid common mistakes along the way.

Step 1: Choose a Business Name

By default, a sole proprietorship operates under your legal name (for example, John Smith Photography).
But, if you’d like to operate under a different name, you will need to file a Fictitious Business Name (FBN) — also called a Doing Business As (DBA) — with your County Clerk’s office in the county where your business operates. After filing, California law requires you to publish your DBA in a local newspaper for four consecutive weeks within 30 days of filing.

👉 Find your local County Clerk’s office here
👉 Learn about Fictitious Business Name requirements (CA Secretary of State)

💰 Typical Cost: $75–$150, depending on the county.

Step 2: Get a Business License

Most cities and counties in California require a Business License (sometimes called a Business Tax Certificate). Check with your city hall or county government for the specific requirements in your area — some allow online applications.

👉 Search for your city or county business license office (California Governor’s Office of Business and Economic Development – CalGold)

💰 Typical Cost: $50–$150 per year.
⏱ Processing Time: Usually 3–10 business days.

Step 3: Register for a Seller’s Permit (If Selling Products)

If your business sells tangible goods — including clothing, crafts, or physical items — you must have a Seller’s Permit from the California Department of Tax and Fee Administration (CDTFA). This allows you to collect and remit sales tax.

👉 Register for a Seller’s Permit (CDTFA official site)

💰 Cost: Free
🕒 Processing Time: Instant or within 24–48 hours

Step 4: Get an Employer Identification Number (EIN) (OPTIONAL)

While sole proprietors can technically use their Social Security Number (SSN) for tax purposes, getting an EIN (Employer Identification Number) is recommended for privacy and future growth.

You’ll need an EIN if you:

  • Hire employees

  • Open a business bank account

  • File certain business tax forms

👉 Apply for an EIN online (IRS official site) — free and instant approval.

Step 5: Open a Business Bank Account

Separate your personal and business finances to simplify tax filing and bookkeeping. Most banks require:

  • Your EIN or SSN

  • Business License

  • Fictitious Business Name Certificate (if applicable)

Keeping accounts separate also helps protect your credibility and makes tracking business income and deductions much easier.

Step 6: Understand and Plan for Taxes

As a sole proprietor, you are considered self-employed — which means no taxes are withheld from your business income. You’re responsible for:

  • Self-Employment Tax: 15.3% (covers Social Security & Medicare)

  • Estimated Quarterly Taxes: due April 15, June 15, September 15, and January 15

👉 Pay estimated taxes to the IRS (Direct Pay)
👉 Pay estimated taxes to the California Franchise Tax Board (Web Pay)

💡 Tip: If you expect to owe more than $1,000 in taxes, you’re required to make quarterly payments to avoid penalties.

Step 7: Get Business Insurance (Optional)

Even though sole proprietors don’t have limited liability protection, you can protect yourself with business insurance. Common options include:

  • General Liability Insurance – Covers accidents, property damage, and lawsuits

  • Professional Liability Insurance – Covers negligence or missed deadlines

  • Business Property Insurance – Protects equipment or inventory

👉 Compare small business insurance policies (California Dept. of Insurance)

Step 8: Track Your Business Finances

Keep clear, accurate records of all income and expenses for tax deductions and compliance.
Recommended tools include QuickBooks, Wave, or even Google Sheets for startups.

💡 Tip: Create a simple system for tracking receipts and mileage to save hundreds at tax time.

In Summary

Registering as a sole proprietor in California is straightforward — but skipping a step (like your business license or seller’s permit) can cost you time, fines, or missed tax deductions later.

Here’s your quick checklist:
✅ Choose a name and file a DBA (if needed)
✅ Get your local business license
✅ Register for a seller’s permit (if selling goods)
✅ Apply for an EIN
✅ Open a business bank account
✅ Understand your tax obligations
✅ Get insured and track your finances

Need help registering your business? We can do that for you, get a quote by contacting us at hello@pomco.co!

Business Consulting BlogsPomegranate CompanyComment