This article provides three key state business startup requirements for self-employed sole proprietors and general partners who run residential house cleaning businesses. Information from the Secretary of State, the California Franchise Tax Board and selected city and county government sources were used to research this article.
Be aware that sole proprietor and general partner startup requirements in this state are always changing. Some requirements even vary from county to county. It is important that you call or visit your local county or city government to find out local requirements for residential house cleaning businesses and home-based businesses. This article is not intended to be exhaustive or a substitute for qualified legal or tax advice.
Business Name Registration
Sole proprietors and general partners who want a business name that does not include the owner(s) full names (for example, Janice Smith’s Cleaning Service or Martha Harris and Tom Graham’s Maid Service) need to find out whether the name they want to use is available in the California county or counties where they plan to do business. Start with a statewide, corporate business name search to avoid legal problems and customer confusion.
Then do an online search for names similar to the one you plan to use. For example, if you want to use the name, Crystal Clean Maid Service, do simple Google searches for “Crystal Clean Maid Service+California” plus Crystal Clean Maid Service+your county” and “Crystal Clean Maid Service+your town or city”. Search beyond the first page of results. Go at least five pages deep into the search results to see if the name you want or similar names are being used in your state, county or city.
In California, a Fictitious Business Name (FBN) or DBA (“doing business as” name) registration is required when:
• the business name does not include the legal last name of the owner(s) or each of the partners.
• what the business does is not clear by the name of the business.
• the business name suggests owners who may not exist.
Sole proprietors and general partners should register a Fictitious Business Name (FBN) or DBA (“doing business as” name) for their business with the California county and city where the business will be based.
For state-wide name registration, consider applying for a California trademark with the Secretary of State. Apply for a Trademark or Service Mark online through the California Secretary of State’s bizfile California portal. Trademark applications can also be made in person at the Sacramento office, or through the mail.
After registering a fictitious name or DBA with the state, county or city, businesses must publish their names once a week for four successive weeks in a local newspaper or legal publication within 30 days of registration.
In the state of California, filing a Fictitious Business Name (FBN) or DBA does not guarantee a business sole rights to the use of that name. Other businesses in the state may also register the same fictitious name. Registered businesses are expected to legally defend their fictitious name.
Business License Registration
Sole proprietors and general partners do not have to apply for a state business license in California. Business licenses are issued by counties and cities where the business is based.
Note: The State of California provides a license and permit website, CalGold, that directs business owners to the appropriate city or county office for licenses, permits and registrations. Simply select your city or county, enter your business type and click on the Search button. The CalGold portal also leads to state and federal links, addresses and phone numbers.
In California, a general partnership is created when two or more owners form an oral or written agreement to start a business together. General partners are not required to file any documents with the Secretary of State. It is advisable for general partners to file a fictitious name or DBA in the county where the business is based plus a state-wide trademark registration. A written partnership agreement drawn up by a lawyer is important for both or all partners. Partnership agreements do not have to be filed with the state.
Sole proprietors and general partners may apply for an Employer Identification Number (EIN) from the IRS even if they do not plan to hire employees. Getting an EIN may make it easier to open a bank account and reduce your risk of identity theft. You can apply for an EIN online. In addition, some business registration forms will require a NAICS business classification number for the house cleaning industry.
Business Tax Registration
Sole proprietors and general partners must register their businesses with the California Franchise Tax Board (FTB).
Residential house cleaning services are not taxable in the state of California. Cleaning services do not have to collect and send sales taxes to the Franchise Tax Board (FTB).
Sole proprietors and general partners pay tax on business income to the state of California through their personal state tax return. Sole proprietors and general partners are responsible for paying estimated self-employment income taxes in California (on Form 540-ES) similar to the way self employment taxes are paid to the federal government. Get more information about estimated tax requirements by calling the Franchise Tax Board at (800) 852-5711.
California general partnerships that file a Federal partnership information Form 1065, may need to file state income tax Form 565. In addition, partnerships are required to withhold and pay taxes on California based income for non-resident partners. Get more information from a CPA or qualified tax preparer to find out if your partnership must file those returns.
Selected California City Licenses
Anaheim Business License: https://www.anaheim.net/616/Business-License-Application
Bakersfield Business License: https://www.bakersfieldcity.us/204/Business-Licenses-Permits-Fees
Chula Vista Business License: https://www.chulavistaca.gov/departments/finance/business-licenses
Fontana Business License: https://www.fontana.org/262/Customer-Services
Fremont Business License: https://www.fremont.gov/536/Businesses
Fresno Business License: https://www.fresno.gov/finance/business-license-tax-certificate/
Glendale Business License: https://www.glendaleca.gov/businesses/starting-a-business-in-glendale
Irvine Business License: https://www.cityofirvine.org/ipd-divisions-bureaus-units/business-licensing
Long Beach Business License: http://www.longbeach.gov/finance/business-info/business-licenses/
Los Angeles Business License: https://latax.lacity.org/oofweb/eappreg/eappreg_criteria.cfm
Modesto Business License: https://www.modestogov.com/2379/Business-License-Applications-and-Agreem
Moreno Valley Business License: http://www.moval.org/departments/financial-mgmt-svcs/svc-biz-license.html
Oakland Business License: https://www.oaklandca.gov/services/apply-for-a-business-license-online
Oxnard Business License: https://www.oxnard.org/city-department/department-billing-licensing/business-license/
Riverside Business License: https://www.riversideca.gov/finance/license.asp
Sacramento Business License: http://www.cityofsacramento.org/Finance/Revenue/Business-Operation-Tax/Apply-for-a-Business-Operation-Tax-Account
San Bernardino Business License: http://www.ci.san-bernardino.ca.us/cityhall/city_clerk/business_registration/default.asp
San Diego Business License: https://www.sandiego.gov/treasurer/taxesfees/btax
San Francisco Business License: https://sftreasurer.transactcentral.com/CCSF/servlet/SmartForm.html?formCode=business-registratio
San Jose Business License: https://www.sanjoseca.gov/business/register-for-a-business-tax-certificate-2
Stockton Business License: http://stocktongov.com/government/departments/adminServices/blic.html