Checklist to start a small business in California 2026: legal, tax, and operational steps

If you're planning to launch a small business in California in 2026, this checklist will guide you through the essential legal, tax, and operational steps. From choosing a business structure to securing permits and insurance, each task is tailored to meet state and local regulations. Use this list in Foco to organize your tasks by priority and deadline, ensuring nothing is overlooked.

California has specific requirements, such as registering with the California Department of Tax and Fee Administration (CDTFA) for businesses with taxable sales or obtaining a zoning permit if operating from a physical location. Some counties and cities also require additional licenses, so it’s crucial to verify local requirements before starting operations.

How to use this checklist in Foco

Import this checklist into Foco and assign it a color to keep it separate from other projects. Use the Kanban view to move tasks between columns like 'To Research', 'In Progress', and 'Completed'. Schedule start and due dates for each step, and set reminders for critical deadlines, such as annual license renewals. If you’re working with a lawyer or accountant, invite them as collaborators to the 'Start CA Business 2026' workspace to assign them specific tasks.

• Choose a legal business structure (LLC, corporation, partnership, etc.) and consult with a lawyer or accountant about tax and liability implications
• Register your business name with the California Secretary of State if not using your legal name (check name availability using the state’s business name search tool)
• Obtain an Employer Identification Number (EIN) from the IRS, even if you don’t have employees (required for opening bank accounts and filing taxes)
• Register with the California Department of Tax and Fee Administration (CDTFA) for a seller’s permit if your business sells taxable goods or services
• Check city and county business license requirements where you’ll operate (some industries, like food or construction, require specific licenses)
• Obtain a zoning or land use permit if operating from a physical location (consult your local planning department)
• Register with the California Employment Development Department (EDD) if you plan to hire employees (required for payroll taxes)
• Purchase workers’ compensation insurance if you have employees (mandatory in California, even for a single employee)
• Obtain general liability insurance to protect your business from claims of injury or damage
• Open a separate business bank account to manage finances (requires EIN and business registration documents)
• Set up an accounting system to track income, expenses, and payroll (consider software like QuickBooks or hiring an accountant)
• File initial state and federal tax returns based on your business structure (consult a tax professional for deadlines)
• Renew licenses and permits annually or as required by state or local agencies (schedule reminders in Foco)
• Check if your business requires additional permits, such as health permits for restaurants or environmental permits for regulated industries
• Register for California’s Use Tax program if you purchase out-of-state goods for resale in California
• Consult with a lawyer to draft business contracts, nondisclosure agreements, or terms of service if applicable to your model
• Set up a payroll system if you have employees (consider services like Gusto or ADP to comply with California labor laws)
• Review California labor laws, including the state minimum wage (16 USD/hour in 2026) and requirements for breaks and overtime