The Comprehensive Guide to Starting Your Business in Los Angeles in 2023

The city of Los Angeles offers one of the most dynamic and productive marketplaces in the world.

Los Angeles is world known for its entertainment industry which has time and again produced stellar motion pictures; however, not as many people are aware of the many upcoming industries in the city which avail mouth-watering opportunities.

Full of entrepreneurs, possibilities, and over seven months of sunshine a year, the LA metropolis is a haven for both work and play.


Why Los Angeles is One of the Best Cities to Start Your Business

Given Los Angeles 830 billion-dollar economy, it makes a lot of sense to set up shop in the metropolis.

It is by no accident that Los Angeles is highly productive as lucrative measures have been put in place to attract entrepreneurs and aspiring business owners.

From legal, environmental, economic and political perspectives, starting a business in LA is easier compared to many other locations.

Below is the comprehensive guide to starting a business in Los Angeles in 2021.

  1. Do Research
  2. Come Up with a Business Name
  3. Choose a Location for Your Business
  4. Purchase Business Premises or Conduct Business Online
  5. Register Your Business with the Secretary of State to Start Your Business in Los Angeles
  6. Build Your Business Network
  7. Prepare for The Challenges
  8. Get an Employer Identification Number (EIN)
  9. Obtain Business Permits and Certificates
  10. Register Your Business with the State Tax Agency
  11. Source for Customers
  12. Source for Service Providers
  13. Hire Employees or Independent Contractors

1. Do Your Research

It goes without say that before making a move as big as starting a business, or a company, you should first of all do proper research.

The main point of research is to identify an opportunity that you can capably take advantage of given your current resources to avoid unnecessary pressures and minimize the risk of business failure.

You should also keep in mind that starting and growing a business is hard work; therefore, go for an industry that you are passionate about.


2. Come Up with a Business Name

For registration purposes, you will have to come up with a business name to be operating under.

Unless you choose to be operating under your Corporation or LLC name, you will have to register your chosen business name as a DBA which is the acronym for ‘doing business as.’ If you do not, your business name will by default be the name of your LLC or Corporation.

The legally recognized business name is going to be captured in all business oriented government and state applications and forms such as certificates and permits.

To file for a DBA in Los Angeles, log on to the Los Angeles County Registrar website and under ‘business filing and registration’ you will be guided into completing the exercise. You will have to pay a fee to complete the process.


3. Choose a Location for Your Business

Choosing a location is easier said than done, but prior research should aid you in this regard.

To determine the best place, familiarize yourself with the local economy, as well as the city’s maps. It is absolutely critical to settle for a befitting location especially if the business you intend to start is going to depend heavily on walk-in customers and first impressions such as an apparel retail store.

Fashion and textile industries are prevalent in the downtown area, while retail stalls are many on the west side of the city because of high demand. Defense businesses, on the other hand, are mainly congregated in the South Bay area. It is not necessary that you conform to the status quo location-wise; you can take a calculated risk and go for an out-of-the-box approach.


4. Purchase Business Premises or Conduct Business Online

The next logical step after identifying your preferred location is, of course, buying your business premises — that is, if you decide to not conduct your entire business online.

At this point, you should initiate contact with a reputable and experienced law firm that will act as your partner and facilitate proper acquisition of all the assets you require to set up shop as per the stipulations of the law.

At Mollaei Law, we are dedicated to solving all your legal business needs to ensure you are up and running as fast as possible.

Due to the price and demand for real estate, business premise acquisition is one of the most harrowing processes of setting up a business in Los Angeles.

It may take some time to identify an ideal location that will best serve your needs as well as your budget. However, once achieved, the rest of the process is not as daunting. If the cost of real estate seems too expensive, you can consider sharing office space with a co-tenant or operating from home.


5. Register Your Business with the Secretary of State to Start Your Business in Los Angeles

Before you start your business, you want to make sure you register your business as a Limited Liability Company (LLC) or Corporation (either regular C Corporation or S Corporation) with the California Secretary of State.

There are a number of different entity types and many factors to consider when determining the right business structure.

The decision to choosing the correct business structure is important because the type of business you create determines the type of applications and forms you will need to file.

There’s also very important personal liability and tax implications for each business type.

A business lawyer can help you choose the right entity by raising all the necessary considerations, and also by relieving the burden of organizing, drafting, and filing the proper documentation with state authorities.

If you decide to settle for an LLC or a corporation, you will have to register your business with the secretary of state. Normally, it is advisable to start a business in your home state, but California makes it easy for both natives and non-natives to start businesses. The process of registering a Corporation or an LLC will call for the hiring of a Registered Agent who is going to be responsible for accepting legal documentation on your behalf.

As pertains to registering with the secretary of state, your lawyer will assist you in properly devising, organizing and establishing your chosen business structure so that your Corporation or LLC can be registered successfully.

You should also have your commercial premise leases and contracts be checked and reviewed by a qualified contract lawyer. You should not trust your landlord or real estate agent who may only be interested in leasing space or getting a commission.

There are many other instances in which you will need a qualified attorney at law such as in the case of partner admission, negotiation, assisting with transactions, trademark registration, business planning, etc.

For all the above legal services in addition to any other form of legal expertise you might need, get in touch with us and ignite a healthy, professional relationship. With a trusted legal partner by your side, you will rest easy knowing that the business you are laboring to set up adheres to all laws and regulations.


Types of Businesses That You Can Start in Los Angeles

Below are some of the different forms of businesses that you can start in Los Angeles:

  1. Sole Proprietorship
  2. Partnership
  3. Limited Liability Company (LLC)
  4. Corporation
  5. Non-profit Organization
  6. Professional Corporation


Sole Proprietorship

The most common and the easiest to begin since it requires no special state filing. The downside is that it offers no protection from liability.



If you decide to take in partners, the setup is going to be more complicated, and an agreement depicting each partner’s contributions and responsibilities will have to be drafted by an attorney.


Limited Liability Company (LLC)

It is a company that combines the tax advantages of a sole proprietorship business with the protection from liability offered by a corporation. It is more complicated and calls for legal help and significant resources.



A corporation is treated as a legal entity, and you are personally protected from liability.


Non-profit Organization

If you have a course you are deeply committed to that can give something back to the community, then an NGO offers an exciting prospect.


Professional Corporation

Stipulated in the California Corporation Code, to practice certain professions, you have to form a professional corporation. Attorneys, dentists, physicians, architects, audiologists, pharmacists, nurses, veterinarians, and optometrists have to form a professional company to practice.

If you find it a challenge to choose which kind of business you want to establish, contact me at and I can help you decide.


6. Build Your Business Network

In any undertaking, the importance of a role model is absolute in ascertaining success. The same is so when starting a business, which means that you will have to actively build a network to bolster your chances of setting up a successful enterprise.

Make a point of knowing other professionals in your area of interest so that you can have a source of helpful advice and information. Additionally, go for a caring and understanding Law Firm that will be with you every stage of the way.

7. Prepare for The Challenges

The blue sunny skies and upbeat vibe of Los Angeles residents should not fool you into thinking everything will be smooth sailing.

As it is with setting up a business in any other location, challenges are bound to come up, and you should be mentally prepared to deal with them.

Your network should be your go-to source for solutions regarding navigating legal, entrepreneurial, personal, or any other type of challenge you may face in your chosen line of business.


8. Get an Employer Identification Number (EIN)

An Employer Identification Number (EIN) is a number issued by the Internal Revenue Service (IRS) to identify a business.

Also known as the Federal Tax Identification Number, its role is to identify your business and facilitate the collection of taxes.

Without an EIN, you can neither open a business bank account, apply for a business permit, nor start a business.

If you are in possession of a U.S. Social Security Number (SSN), all you have to do is to log onto the IRS website to get your EIN here.

However, if you do not have a Social Security Number (SSN), you will need to have a business lawyer act as your Third Party Designee to apply for your EIN on your behalf.

If you need an EIN, contact me at

Read more about getting an EIN without SSN here.


9. Obtain Business Permits and Certificates

You will have to obtain the relevant licenses before commencing operations. If you do not have a legal partner at this point, you run the risk of starting business operations without the required legal documentation which may put you on a collision course with the authorities.

Necessary permits may include the federal permit, seller’s permit, a business license, zoning permits, police alarm permit, fire permit, a tax compliance certificate among many other certificates and permits depending on the nature of your business.

The licenses and certificates you have to obtain also rely on location. Even if you are operating a home business, you are still required to obtain a permit to avoid friction with relevant authorities.

You will have to pay license and permit fees to acquire the necessary documentation.


10. Register Your Business with the State Tax Agency

As can be deduced, this step involves registering with the State Tax Agency, and the local agencies to facilitate tax collection such as property tax, sales tax and the like.

You may be required to pay a fee and you will have to describe what your business is all about and give critical personal details such as your social security number.


11. Source for Customers

It is advisable to source for clients before you conclude all activities that will enable you to begin actual business dealings. It is all about being prudent and taking a pro-active approach to increase the chances of your business hitting the ground running.

Focus on marketing and prepare client contracts. It would be great if you managed to get pre-commitments and pre-orders from potential customers.


12. Source for Service Providers

Logically, your premises will require basic amenities to function optimally. Purchase all necessary equipment such as printers, computers, furniture, and office accents and identify reliable electrical, cleaning, and telephone service providers.

Have a cost-conscious mentality so as to save as much as possible without compromising on quality, since you are just starting out.


13. Hire Employees or Independent Contractors

Hiring workers is an intricate process that will require you to first of all draft employee contracts; ideally, with the help of an attorney. The hiring process will have to be expertly handled to avoid any friction with the authorities. You will have to obtain all data regarding compensation insurance, payroll taxes, and all the applicable hiring laws. As is evident, an attorney is absolutely crucial during the hiring process.


Final Thoughts

The recurrent theme in the comprehensive guide to starting a business in Los Angeles in 2021 is how important it is to have a trusted legal partner to assist you navigate all the legal aspects of setting up a thriving business.

We, as Mollaei Law, confidently propose that you choose us as your providers of legal business services. Below is why choosing us is one of the best decisions you can make.


Why Choose Us?

Not only will we offer you quality and professional business-oriented legal solutions; we will also be there with you every step of the way as partners.

With our client-focused approach, any issue you face will be accorded maximum attention. Our reputation is proof enough of our commitment to excellence in service delivery.

Our staff and attorneys are qualified, friendly, and professional. We specialize in all things business law from reviewing contracts to trademark registration and negotiations. Whatever your business legal needs may be, you can trust Mollaei Law to sort you out in a fast, efficient manner. Get into contact with us today for more information.

► Sam Mollaei, Esq., business lawyer, can be reached by email or via phone (818) 925-0002.

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