About the guide, updated June 2022
This guide is designed to help you as you set out to launch or expand your business here. It was written by the San Francisco Office of Small Business, the city’s central point of information and assistance for small businesses. Our team is available to assist you.
- Business planning
- Choose a business entity structure
- Registering your business
- Choose a location and protecting your business
- Licenses / Permits
- Business taxes
- Employment and Labor Law
- Accessing Capital
- Government Contracting and Certification
- Business planning
- Choose a business entity structure
- Registering your business
- Choose a location and protecting your business
- Licenses / Permits
- Business taxes
- Employment and Labor Law
- Accessing Capital
- Government Contracting and Certification
For more than 150 years, San Francisco has defined itself as the place to do business. From the Gold Rush of 1849 to the globally transforming technology boom of the1990s, to recent advances and opportunities in bio sciences and green energy technology, to the technology startups of today that have given way to social media, on-demand services, and a shared economy, San Francisco remains at the forefront of business opportunities, innovation and transformation.
San Francisco’s metropolitan setting, world-class cuisines, leading sports teams, cultural activities, breathtaking views and signature tourist attractions lure a record-breaking number of vacationers as well as business and convention travelers from all over the world. The City provides a multitude of business opportunities, resources, and creates an entrepreneurial environment for those embarking on a journey to start a business. Opportunities abound for businesses in all industries.
Today San Francisco continues to provide the perfect setting to do business – a dynamic consumer driven economy, a highly educated workforce, a culturally diverse population with needs ranging from the everyday commonplace to the extraordinarily sophisticated, and a city government ready to help your business start, grow and thrive.
The San Francisco Office of Small Business is here to work with you as you embark on the journey of starting your business in San Francisco. The Office of Small Business is the city’s central point of information and assistance for small businesses. Our team is available to assist you in person, by phone or virtually to provide customized information on the requirements, rules and regulations and other important considerations for doing business in San Francisco. Additionally, the Office of Small Business can provide information on business resources, including technical assistance, legal resources, and financing options to name a few.
Thank you for choosing San Francisco to start or grow your business. We have assembled this guide, to be used complementary to more frequently updated resources online, to help you as you set out to launch or expand your business here.
We look forward to working with you!
For additional information and personalized assistance, contact:
Office of Small Business
City Hall, Room 140 – for general assistance
San Francisco Permit Center, 49 South Van Ness – for permit support
Starting a small business can be scary and risky. There is no way to eliminate all the risk, but you can improve your chances of success by taking time before you start or buy a business to do research, take business classes, and get experience.
The single most important thing you can do to start a business is to be prepared, and the best tool to get prepared is good planning. Before you invest money or quit your day job, you should take the time to develop a business plan. A business plan is an essential roadmap for business success. Writing a business plan will help you clarify your goals, organize priorities, and give direction to your work. It will also give you and potential investors, lenders, landlords, and others you may do business with, a clear vision of your roadmap to success and profitability. The business plan should tell a compelling story about your business and explain who, what, when, where, how, and why. It should be focused and clear, and define specific objectives and goals to guide the organization.
The business plan usually projects 3-5 years into the future and should describe the fundamentals of your business idea and provide financial data to show that you will make money. Business plans can be written to attract investors, or serve as a blueprint for your own use, but most all business plans include the following basic parts: an executive summary or statement of purpose of your business, a detailed business description of how the business will work (including what your product or service is, whether you will have employees, who will supply your goods, and where you will be located), a market analysis detailing who your customers are and an evaluation of your main competitors, a description of your marketing & sales strategy, and lastly detailed financial information, including your best estimates of start-up costs, revenues and expenses, and your ability to make a profit. The last thing you want is to start a business that is not profitable. There are a number of business planning resources to help you create your business plan, including in-person workshops and classes, online information and tools, and one-on-one business counseling.Back to top
Choose a business entity structure
When you start a business, you must decide on a business entity structure. There are several types of business entity structures including sole proprietorship, partnership, corporation, and limited liability company (LLC), among others.
Choosing the right type of entity structure for your business generally depends on the type of business and the risks involved with said business, as well as personal finances. You should select the entity structure that best meets your needs, considering important factors such as risk, liability, taxation, and formalities and expenses to establish and maintain the business entity structure. Some business structures like sole proprietorships and partnerships are easier and cheaper to set up and maintain, while others like corporations are more formal and are separate legal entities owned by shareholders, and thus require additional filings and more formalities.
The following is a review of some of the most common type of business entity structures with basic formation, registration, and taxation information for each. It is best to consult a business attorney and or a tax professional to determine the right business structure for you and your business. There are also workshops and classes on this topic, and a lot more information available online to research. For additional information you may visit the IRS website at www.irs.gov, the Secretary of State website at www.sos.ca.gov, the Franchise Tax Board website at www.ftb.ca.gov, the U.S. Small Business Administration website at www.sba.gov, and the San Francisco Office of Small Business website at sf.gov/osb. For more information, see Part 11: Business Resources for additional resources on this topic, including Legal Resources.
A sole proprietorship is a type of business entity structure that is set up to allow an individual or legally married couple to own and operate a business. Legally, a sole proprietorship is inseparable from its owner – the business and the owner (individual) or married couple, are one and the same. This means the owner of the business is personally liable for any business-related obligations, such as debts or court judgments. Additionally, in a sole proprietorship, the owner reports business income and losses on his or her personal tax return and does not file separate taxes.
Sole proprietorships are usually established at the local city or county level and do not require formation documents at the state or federal level. In San Francisco, a sole proprietorship is established by completing an application for Business Registration and paying the required fee to the Office of the Treasure and Tax Collector. See Part 3 for more information on Registering Your Business.
A partnership is a business structure where two or more people share ownership of a for-profit business. Each partner contributes to the business, including money, property, labor or skill. In return, each partner shares in the profits and losses of the business. Because partnerships entail more than one person in the decision-making process, it’s important to discuss a wide variety of issues up front and develop a legal partnership agreement. This agreement should document how future business decisions will be made, including how the partners will divide profits, resolve disputes, change ownership (bring in new partners or buy out current partners) and how to dissolve the partnership. Although partnership agreements are not legally required, they are strongly recommended and it is considered extremely risky to operate without one.
Partnerships generally must file an “annual information return” to report the income, deductions, gains and losses from the business’s operations, but the business itself does not pay income tax. Instead, the business “passes through” any profits or losses to its partners. Partners include their respective share of the partnership’s income or loss on their personal tax returns. Partnership taxes generally include annual return of income, employment taxes, and excise taxes if applicable. Partners in the partnership are responsible for several additional taxes, including income tax, self-employment tax, and estimated tax.
There are generally four type of partnership arrangements, including:
General partnership (GP)
A general partnership is a business owned by two or more individuals engaged in a business for profit. As in a sole proprietorship, there is no separation between the business and the owners, thus the partners are each personally liable for all legal and financial obligations of the partnership and for all wrongful acts of any partner acting in the ordinary course of partnership business. A GP is not a separately taxed entity, rather, the profit and losses of the partnership flow through to the partners, and the partners pay taxes on their shares of the business income on their personal tax returns. All partners enter into partnership by either oral or written agreement that must cover all terms of the parties’ business relationship. General partnerships are quite flexible; a great variety of control and management structures are available by agreement.
General partnerships do not require formation documents at the state level, however, a Statement of Partnership Authority (GP-1) may be filed with the California Secretary of State at the option of the partners. This document specifies the authority, or limitations on the authority, of some or all of the partners to enter into transactions on behalf of the partnership and any other matter.
General partnerships must obtain a Tax ID Number also referred to as an Employer Identification Number (EIN) or Federal Employer Identification Number (FEIN) from the IRS (Internal Revenue Service) to identify the partnership for tax purposes. General partnerships operating in San Francisco, must be registered locally. See Part 3 for more information on Registering Your Business.
Limited partnership (LP)
Limited partnerships are formed by two or more people carrying on a business for profit. An LP has at least one person acting as the general partner who has management authority and personal liability, and at least one person in the role of limited partner who is a passive investor with no management authority. All partners – both general and limited – must enter into limited partnership by either oral or written agreement. Limited partnerships are managed and controlled by general partners; general partners have authority to bind the partnership and are liable for partnership obligations to the same extent as partners of general partnerships. Limited partners, however, are generally not liable for partnership obligations; their only risk is their agreed capital contribution, or as provided in the partnership agreement. Limited partners normally do not participate in managing the business. However, if limited partners participate in the management of the partnership business, they may lose their protected limited partner status and become liable for all risk. Like the GP, LPs are not a separately taxed entity, rather, the profit and losses of the partnership flow through to the partners. However, unlike the GP, LPs are subject to an annual minimum franchise tax of $800. Limited partnerships are usually not used for retail or service business types, and are typically attractive to investors of short-term projects.
To organize, an LP must complete and file a Certificate of Limited Partnership (Secretary of State Form LP-1) with the California Secretary of State along with the applicable filing fee. Limited Partnerships operating in San Francisco must also register locally, and obtain a Tax ID Number from the IRS. See Part 3 for more information on Registering Your Business.
Limited liability partnership (LLP)
An LLP is a form of ownership in which all the partners receive limited liability protection, yet each partner can take an active role in managing the day-to-day affairs of the business. The LLP form of ownership is limited in the State of California to persons licensed under California laws to engage in the practice of public accountancy, law, or architecture, as well as more recently, engineers and land surveyors. Like the other partnerships, LLPs are not a separately taxed entity, rather, the profit and losses of the partnership flow through to the partners, but like the LP, LLPs are subject to the annual minimum franchise tax of $800. Additionally, LLPs must either a) maintain a malpractice liability insurance policy against claims of at least $100,00 multiplied by the number of licensed practitioners in the LLP, and not less than $500,000; or alternately, b) satisfy this requirement by confirming in writing that as of the most recently completed fiscal year, the LLP had a net worth of at least $10 million for an LLP providing accountancy services, architectural services, engineering services, or land surveying services, and $15 million for an LLP providing legal services. Like a general partnership, all partners have equal rights in the management of an LLP unless otherwise agreed. LLPs are quite flexible; a great variety of control and management structures are available by agreement.
To organize, the LLP must complete and file the Registered Limited Liability Partnership Registration (Secretary of State Form LLP-1) with the California Secretary of State along with the applicable filing fee. In addition, if the LLP chooses to satisfy the malpractice liability requirement by confirming the minimum net worth, the LLP must also complete and file a Limited Liability Partnership Alternative Security Provision transmittal form (Secretary of State Form LLP-3) with the Secretary of State. Upon receipt, the Secretary of State’s Office will review the registration form for statutory compliance. Once the document is filed, the Secretary of State will return a file stamped copy of the LLP-1, plus a Certificate of Registration to the limited liability partnership. LLPs operating in San Francisco must also register locally, and obtain a Tax ID Number from the IRS. See Part 3 for more information on Registering Your Business.
Joint ventures act as general partnerships, but for only a limited period of time or for a single project. Partners in a joint venture can be recognized as an ongoing partnership if they continue the venture, but they must file as such.
Limited Liability Company (LLC)
A limited liability company is a hybrid business entity that blends elements of partnership and corporate structures, providing liability protection to its owners (called members), and the right to participate in the management of the LLC. An LLC may be managed by managers who are not members, if provided for in the Articles of the Organization. However, if the LLC is managed by managers, they alone have authority to bind the LLC to a contract; members and directors have no authority in these matters. Otherwise, the LLC is managed by its members. In this case, every member is an agent of the LLC and has the power to bind the LLC to a contract and the right to vote on merger or dissolution.
Members and managers of the LLC have the same degree of limited liability as a shareholder of a corporation. Members of an LLC can consist of a single individual, two or more individuals, corporations, or other LLCs. All members must enter into an operating agreement by either oral or written agreement. Although an LLC agreement is not legally required, it is strongly recommended and it is considered extremely risky to operate without one. An LLC may not be formed by certain businesses that provide professional services requiring a state professional license, such as legal or medical.
LLCs can generally be classified as either partnerships or corporations for tax purposes. For California income tax purposes, an LLC will be classified as a partnership if it has more than one owner. In this case, the profit or loss flows through to the owners/members just as in other partnerships. If the LLC is owned by one member (individual), it will be treated as a disregarded entity and all income and expenses will be reported on the member’s tax return as a sole proprietorship. However, an LLC can elect to be treated (taxed) as a corporation and required to pay tax on its net income. LLCs are subject to the annual minimum franchise tax of $800, plus an annual fee based on total income.
To organize, an LLC must complete and file Articles of Organization (Secretary of State Form LLC-1) with the California Secretary of State along with the applicable filing fee. This form identifies the principal executive office, the principal office in California and the agent for service of process. LLCs operating in San Francisco must also register locally, and obtain a Tax ID Number from the IRS. See Part 3 for more information on Registering Your Business.
A corporation is a separate legal entity owned by shareholders who enjoy protection from personal liability. Management structure can be altered by committees of board members and shareholder agreements.
C corporation (C-CORP)
The C corporation (commonly referred to as a C-corp) itself, not the shareholders, is held legally liable for the actions and debts the business incurs. C-corps are more complex than other business types and are generally suggested for larger, established companies with multiple employees. They tend to have costly administrative fees and complex tax and legal requirements, and more formalities than other business structures. For example, C-corps are required to have bylaws, and a board of directors who determines policy and appoints officers to manage the day-to-day affairs. Shareholders do not participate in day-to-day management activities. C-corps are known for double taxation, the corporation is taxed annually on its earnings, and the shareholders pay individual income tax on these earnings when they are distributed as dividends. Additionally, C-corps are subject to the minimum annual franchise tax of $800.
To organize, a C-corp must complete and file Articles of Incorporation with the California Secretary of State along with the applicable filing fee. C-corps must obtain a Tax ID Number from the IRS. C-corps operating in San Francisco must also register locally. See Part 3 for information on Registering Your Business.
S corporation (S-CORP)
An S-corporation (commonly referred to as an S-corp) is a special type of corporation created through an IRS tax election. An S-corp is similar to a C-corp except that the S-corp is not taxed separately from the owners, avoiding the double taxation associated with the C-corp (once to the corporation and again to the shareholders). An S-corp generally offers liability protections to its owners (shareholders) and is a conduit where the profits or losses of the S-corp flow through to the shareholders. S-corps are also very similar to Limited Liability Companies but with more limitations, such as the business is limited to 100 shareholders and can issue only one type of stock. An S-corp does not pay federal income tax, but under California law, the S-corp is subject to a 1.5% tax on its net income. S-corps are subject to the annual $800 minimum franchise tax.
To organize, an S-corp must complete and file Articles of Incorporation with the California Secretary of State along with the applicable filing fee. After you are considered a corporation, all shareholders must sign and file Form 2553 with the IRS to elect your corporation to become an S-corporation. S-corps must obtain a Tax ID Number from the IRS. S-corps operating in San Francisco must also register locally. See Part 3 for information on Registering Your Business.
B corporation (Benefit corporation or B-CORP)
A B corporation (commonly referred to as Benefit Corporation or B-Corp) is a business form that both generates money for its shareholders and benefits society. Directors are required to consider the effect of decisions on shareholders as well as workers, the community, and the environment. Shareholders in a B-corps determine if the company has achieved a material positive impact, which the organization defines beforehand. B*corps can also become Certified B corporations if they meet the requirements of the nonprofit organization B Lab. Shareholders retain all the protections that they have in a traditional corporate model. B-corps can elect to be taxed as a C-corp or as an S-corp, and B-corp status only affects requirements of corporate purpose, accountability, and transparency; everything else regarding corporation laws and tax law remains the same.Back to top
Registering your business
Once you have chosen the business entity structure best suited for your business, the next step is to organize and register the business entity.
San Francisco Business and Tax Regulations Code requires that every person or entity engaging in business within the city regardless of whether such person or entity is subject to taxation, must register with the San Francisco Office of the Treasurer and Tax Collector within 15 days after commencing business within the City. This includes sole proprietorships, general partnerships (GP), limited partnerships (LP), limited liability partnerships (LLP), limited liability companies (LLC), and corporations (C-corps, S- corps, B-corps). With the exception of sole proprietorships and general partnerships, all other type of business entity structures including domestic and foreign (out of state and or out of country) LPs, LLPs, LLCs, and corporations must first organize or file qualification papers with the California Secretary of State prior to registering locally. Additionally, with the exception of sole proprietorships with no employees, all other type of business entity structures must also first obtain a Federal Tax ID Number, also known as an Employer Identification Number (EIN) or Federal Employer Identification Number (FEIN) from the IRS. Below are the steps to organize and register a business entity with contact information for each agency where you can find additional information and download the applicable organization and registration forms.
California Secretary of the State
For LP, LLP, LLC, & Corporation (C-corp, S-corp, & B-corp) Filings
1500 11th Street, 3rd Floor, Sacramento, CA 95814
Limited Partnerships (LPs), Limited Liability Partnerships (LLPs), Limited Liability Companies (LLCs), and Corporations (C-corps, S-corps, and B-corps) doing business in California are required to organize by filing the applicable form to create the specific entity structure with the California Secretary of the State. See Part 2: Selecting a Business Structure for the specific form or visit the California Secretary of State Business Programs, Business Entities Forms website at https://www.sos.ca.gov/business-programs/business-entities/forms to access the specific form or to file online. This requirement also applies to foreign entities, or entities that organized in another state or country, but who will also engage in business in California. The form must be filed with the California Secretary of State along with the applicable filing fee (noted on the form). Be sure to review the instructions for completing the form, which will also instruct you where to send the form and payment.
Please note, when organizing your entity, you will need to officially name the entity. In some cases, there are specific rules that apply when naming your business entity. For example, in the case of an LLC, it must be different from an existing LLC in the state, and it must indicate that it’s an LLC (such as “LLC” or “Limited Liability Company” at the end of the name), and it must not include words restricted by the state (such as “bank” and “insurance”). Or, Corporations for example, must include the corporation designation (such as “Corporation”, “Incorporated”, or “Inc.”) at the end of the name. Given this, it is strongly recommended to conduct a business name search to ensure the name is not already registered by another entity. We recommend using the Business Search available on the California Secretary of State website at https://www.sos.ca.gov/, under Business Programs, Business Entities, Business Search. You should search both under “Corporation Name” and “Limited Liability Company/Limited Partnership Name”. It is also recommended you search other sources, including the U.S. Patent and Trademark Office electronic search system (TESS) at www.uspto.gov, and the County Clerk’s office of your principal place of business at www.criis.com, as well as conduct an internet search. These searches will minimize any potential problems or setbacks with the name, such as having your form rejected, or receiving a letter to cease and desist use of said name in the event it is being used by another entity or business. If you need further assistance selecting a name or filing with the state, you may consider seeking legal assistance. Or, you may contact us at the Office of Small Business for additional assistance.
Additionally, within 90 days of submitting the form to create your entity, you must also file the required annual Statement of Information form with the applicable fee (noted on the form). Furthermore, you will be required to pay the minimum annual state tax of $800, also known as franchise tax. This tax is generally due within four months of forming the entity.
Internal Revenue Service (IRS) San Francisco Office
For Tax ID Number aka EIN and FEIN
450 Golden Gate Avenue, 1st Floor, San Francisco, CA 94102
P: 800-829-4933 / 415-533-8990
The IRS issues Employer Identification Numbers. An Employer Identification Number (EIN) is also known as a Federal Employer Identification Number or Tax ID, and is used to identify a business entity for tax purposes. Generally, businesses need an EIN. The EIN is used for filing federal income and payroll taxes, as well as withholding income taxes for employees (See Part 6: What You Need to Know About Business Taxes).
General Partnerships, Limited Partnerships, Limited Liability Partnerships, Limited Liability Companies, and Corporations need an EIN. Sole Proprietorships that have employees also need an EIN. Sole Proprietorships with no employees and who file no excise or pension tax returns use the individual’s Social Security Number (SSN) (or Individual Taxpayer Identification Number (ITIN) if they do not have an SSN) in place of EIN, but may opt to get an EIN if the individual prefers not to use their SSN in most business transactions. Generally, businesses need a new EIN when the ownership or business entity structure changes.
Businesses may apply for an EIN in various ways, including on-line, by mail, by fax, and by telephone. If applying online, the number will be issued immediately. There is no fee for obtaining an EIN.
San Francisco Treasurer & Tax Collector
For San Francisco Business Registration Filing
City Hall, Room 140
1 Dr. Carlton B. Goodlett Place, San Francisco, CA 94102
Hours 8:00 AM - 5:00 PM, walk-in services only until 4:00 PM
P: 415-701-2311 or 3-1-1
Per Article 12A of the San Francisco Business and Tax Regulations Code, every person or entity engaging in business within the city must register with the San Francisco Office of the Treasurer and Tax Collector within 15 days of commencing business within the City. This includes sole proprietorships, general partnerships (GP), limited partnership (LP), limited liability partnerships (LLP), limited liability companies (LLC), and Corporations (C-corps, S-corps, & B-corps etc.). This code also applies to businesses located outside of San Francisco that perform work in San Francisco generally seven or more days in the fiscal year (July 1 - June 30), as well as home based and online businesses operating from a fixed location within San Francisco.
The Business Registration Certificate is issued for the fiscal year covering July 1st through June 30th and must be conspicuously displayed at the place of business. Registration fees are based on the type of business activities and anticipated annual gross receipts. Check the Treasurer & Tax Collector’s website (https://sftreasurer.org/business/register-business) for the current fee schedule. The registration fee may be prorated if filing after the first quarter, unless subject to one of the minimum amounts, in which case the fee will not be prorated regardless of filing date.
Business Registrations must be renewed each year by May 31st. It is your responsibility to renew on time, otherwise you will be subject to late penalties and administrative fees, which may total more than the original fee. Thus, it is important to ensure your contact information is always up-to-date to ensure you receive renewal and other important notices in a timely manner. You may update your business information online at any time, including mailing address and business location address. However, a change in ownership structure (switching from a sole prop to LLC, for example) requires a new business registration filing and an inactivation / closure of the previous business registration filing / account. Also, if you register your business before properly vetting the business location to ensure it conforms to zoning and land use laws (see Part 4: Choose A Location and Protect Your Business), and the location changes, you will have to update your business registration account information.
To apply for the San Francisco Business Registration, you will need to know your business structure (see Part 2: Choose a Business Entity Structure), Tax ID # (EIN, SSN, or ITIN), start date in San Francisco (this cannot be a future date, and if backdated more than 15 days, you will be assessed penalties and fees for not having registered in a timely manner), ownership information (name, address, EIN/SSN of owners), business name (trade name, Fictitious Business Name, or DBA/“Doing Business As”), business location, mailing address, estimated payroll, estimated gross receipts, and type of business. You can apply online at https://sftreasurer.org/business/register-business. Be sure to read the instructions carefully and ensure you have all the documentation at hand prior to beginning the online application process.
Please note: The Business Registration (aka Business Registration Certificate) is not a permit or a license to operate. Depending on the nature of your business, including business activities and location, additional operational permits and licenses may need to be obtained from local, state, or federal regulatory agencies in order to legally operate. It is your responsibility to research any and all applicable operating requirements and file accordingly. Local operational permits, also referred to as regulatory licenses or just license, and are renewed annually by March 31st by paying the license fee to the Treasurer and Tax Collector. The Office of the Treasurer and Tax Collector has implemented a consolidated billing system for license renewal fees. Annually in March, businesses that are regulated by one of the local regulatory agencies, including but not limited to, the Department of Public Health (“H” license), Fire Department (“D” license), Entertainment Commission, and the Police Department (“P” license), will receive a single bill which will list all the license renewal fees associated to a single ownership based on their current Business Account Number (aka Business Registration Certificate Number) on file. The license certificates look very similar to the registration certificate but are different. Both need to be current for you to legally operate. If you do not receive your annual license bill in the mail by the middle of March, contact Taxpayer Assistance at 415-701-2311 or visit www.sftreasurer.org, for ways to contact the Tax Office. It is your responsibility as a taxpayer to renew any regulatory licenses on time. (See Part 5: Licenses and Permits.)
In addition to the annual Business Registration fee and operating license fees, businesses may also be required to file and pay city business taxes, including Gross Receipts Tax, Property Tax, and Special Third- Party Taxes. For more information on business taxes see the Local section of Part 6: Business Taxes.
Office of the County Clerk
For Fictitious Business Name Statement Filing (FBN, aka assumed name, trade name, or DBA/“Doing Business As”)
City Hall, Room 168
1 Dr. Carlton B. Goodlett Place, San Francisco, CA 94102-4678
Hours: 8:00 AM - 4:00 PM
As required by the Business & Professions Code Section 17910, sole proprietorships, general partnerships (GP), limited partnership (LP), limited liability partnerships (LLP), limited liability companies (LLC), and Corporations (C-corps, S-corps, & B-corps etc.), who regularly transact business in the State of California for profit under a fictitious name, shall file a Fictitious Business Name Statement (FBN) with the Office of the County Clerk. The name should be filed in the county in which the entity has its principal place of business no later than 40 days from the date the entity commences to transact such business. The principal place of business is typically where the business’s books and records are kept and is often where the head of the firm or upper management is located. For businesses having their principle place of business outside of California, statements should be filed with the clerk of Sacramento County. For businesses having their principal place of business in San Francisco, the FBN must be filed with the San Francisco Office of the County Clerk.
A name is said to be fictitious if it does not include the surname of the individuals in the case of sole proprietorships and general partnerships. In the case of LPs, LLPs, LLCs, and Corporations, a name is fictitious if it differs from the name noted on formation forms including Articles of Organization and Articles of Incorporation as filed with the California Secretary of State, including for example, omitting “LLC” and or “Inc.” from the name on business signage and business cards. A name is also considered fictitious if it suggests the existence of additional owners, for example, if it includes such words as “…Company,” “…& Co.,” “…& Son(s)”, “…& Associates”, “…Brothers”, and the like. However, a name is not considered fictitious if it includes words that merely describe the business being conducted. If you are not sure whether the business name you have selected would be considered fictitious, consult with your legal advisor. You can also file an FBN Statement, which is likely less costly than consulting an attorney.
The FBN Statement is valid for 5 years from date of filing and must be renewed every 5 years if still in use, otherwise, it may need to be abandoned.
To file a Fictitious Business Name Statement you will need to complete the Fictitious Business Name Statement form and submit it to the Office of the County Clerk with the applicable processing fee. Before you do this, please be sure to do a business name search similar to the business name search when creating an entity. We recommend searching the following databases: your County Clerk’s database of registered Fictitious Business Names at www.criis.com, the California Secretary of State’s Business Search portal at bizfileonline.sos.ca.gov/search/business, and the U.S. Patent and Trademark Office electronic search system (TESS) at www.uspto.gov. Lastly, an internet search is also recommended. It is important to know if there is another similar type business using the same or similar name in the same or nearby area. If so, it is usually recommended to choose a different name in order to avoid potential future legal actions.
Important Note: The Fictitious Business Name must be noted on the Business Registration application filed with the Office of the Treasurer and Tax Collector in order for the County Clerk’s Office to be able to process the Fictitious Business Name Statement form. You may be required to provide proof of Business Registration with said business name at time of FBN Statement filing. If you didn’t include the name on the registration at the time of filing, you may update your registration anytime online at www.sftreasurer.org.
After filing the FBN Statement with the County Clerk’s Office, you must also have the name published in a legally adjudicated publication. To do this you are required to contact one of the legally adjudicated newspaper companies and inform them of your FBN Statement filing and provide a copy of said filing. The publication must be published one day per week for four consecutive weeks, with the first publication published within 45 days of filing the FBN Statement. Be sure to contact newspaper companies early, as they may not publish immediately. If you pass the 45-day requirement, the statement automatically expires and you will be required to file a new Fictitious Business Name Statement and pay all applicable fees. The law does not allow for any extensions. A list of the newspaper publications is available at the County Clerk’s office or online at https://sf.gov/information/san-francisco-court-approved-newspapers. Within 30 days of the fourth publication, you must submit for filing the original Proof of Publication (provided to you by the newspaper company) along with the applicable filing fee to the Office of the County Clerk. Some newspaper companies will take responsibility to file the Proof of Publication on your behalf. Be sure to inquire if this is included in the fee or whether you will need to file it personally. Please note, if the business name or business address change, a new FBN Statement and publication including fees will be required.Back to top
Choose a location and protecting your business
Businesses that will occupy a physical location in San Francisco must ensure that the proposed business location conforms to the city’s zoning and land use laws, building and fire codes, and accessibility laws.
It is your responsibility to research the requirements to open your business in any given location and ways to protect your business from a disaster and or a lawsuit if the space is not fully accessible. Below is additional information to assist with your research, including information on land use and zoning, building and fire permits, development impact fees, accessibility laws, and disaster preparedness. You should be sure to consider all of the above before choosing a location. It is important to research these considerations prior to deciding on a location and registering in order to avoid tying yourself to a location that may not either permit your proposed use or which requires a lot of work and money to bring it up to code.
Zoning and land use
Planning Information Center
Permit Center, 49 South Van Ness Avenue, San Francisco, CA 94103
Hours M, T, Th, F: 7:30 AM - 4:00 PM; W: 9:00 AM - 4:00 PM
Before you purchase property, sign a lease, or otherwise occupy a space with the intent to conduct your business in it, be sure to check the zoning of the proposed location to determine if the zoning permits your proposed business operations and use. This requirement also applies to home-based businesses and mobile businesses operating on private property. By checking the zoning of the proposed business location, you will learn if your proposed business is allowed to operate there or if you need to look in another zoning district. Your business may be either principally permitted (permitted as of right), not permitted, or conditionally permitted (via Conditional Use Authorization). Conditional Use Authorization, also referred to as CU or CUA, is a special application to the Planning Department requiring public notification and a public hearing before the Planning Commission. Since conditional use is not a principally permitted use, the Commission must determine if the proposed use is necessary and desirable to the neighborhood and weighs neighborhood input. Thus, it is advised that applicants engage with the community if pursuing a CUA in order to know where the community stands and to try to address any concerns in advance. If a CUA is authorized, it may include operational conditions that mitigate neighborhood concerns, such as hours of operation. If the CUA is not authorized, your proposed business will not be able to operate at the location. In this case, it is strongly recommended that there be contingencies in the lease to get out of the lease if necessary. CUAs are entitlements that run with the property, not with the operator. The CUA process can take 6 months or longer so it’s important to plan ahead since you will likely have to pay rent for a space for several months before you are able to operate.
Please note, some businesses may qualify for the Planning Department’s Community Business Priority Processing Program (CB3P). The CB3P streamlines the CUA process for certain small and mid-sized business applications.
Projects that qualify for and enroll in the CB3P are guaranteed a hearing date within 90 days of filing and are placed on the Planning Commission’s consent calendar. Certain types of businesses do not qualify for CB3P, including massage, tobacco, medical cannabis, bar, liquor store, nightclub, certain formula retail businesses and others. For more information and additional restrictions for CB3P eligibility review the CB3P eligibility checklist at sfplanning.org.
To check the zoning of your proposed business location, contact the Planning Department Planning Information Center (PIC) by phone or in person (see contact above), or visit the Find My Zoning page on their website (https://sfplanning.org/resource/find-my-zoning) or the Property Information Map at sfplanninggis.org/pim/. You will need the address of your desired location, and if calling in or visiting the PIC, a detailed description of the proposed business.
The more accurately you can describe your proposed business operations and the activities, the more accurate the zoning information you receive will be.
For instance, if your proposed business is a franchise that will serve food and alcohol and have live entertainment and operates after hours, it is important to state all of this when speaking to a Planner at the PIC. Details like these and more can change how your business is classified and whether it is permitted, not permitted, or requires a CUA. It is also helpful if you know the prior use of the space and the square footage, since these factors can also determine if a change of use will be required. A change of use is generally required anytime a business will occupy a space previously permitted for a different use (different type of business classification). A change of use must be approved by Planning, but is done via a Building Permit Application (BPA). Business classifications and use definitions are found in the Planning Code.
A change of use may also require neighborhood notification but generally not a public hearing. In Neighborhood Commercial Districts (NCDs) among some other zoning districts, neighborhood notification is generally required for all building permit applications for a change of use to a bar, a liquor store, a walk-up facility, other large institution, other small institution, a restaurant, a limited restaurant, a massage establishment, an outdoor activity, an adult or other entertainment use, a fringe financial service use, tobacco paraphernalia establishment, or a formula retail use. Please be advised that certain types of business classifications are not permitted in certain zoning districts. For example, a manufacturing business or a warehouse are generally not permitted in an NCD. Additionally, some zoning districts have special restrictions on certain type of businesses, including formula retail (chain stores), alcohol uses, and check cashing businesses to name a few, thus it is very important to check the zoning before deciding on a location and plan accordingly, including preparing an adequate timeline and budget for your business.
If you have not identified a location yet and need assistance, you may also contact the Office of Small Business (OSB) at sf.gov/osb, or call 415-554-6134.
Department of Building Inspection (DBI)
Permit Center, 49 South Van Ness Avenue, San Francisco, CA 94103
Hours M, T, Th, F: 7:30 AM - 4:00 PM; W: 9:00 AM - 4:00 PM
The Department of Building Inspection (DBI) issues permits for change of use, new construction, remodeling, alterations and repairs, and signage. A building permit is generally required for most work. There are very few things that do not require a building permit, such as interior painting and flooring (except if the flooring is in a bathroom). Generally, most all other work requires a building permit, including a change of use, which is a Planning process administered via Building Permit Application (BPA). Plans are generally required for a change of use, and may also be required for other work requiring a building permit. If so, there will be additional plan check fees on top of permit issuance fees, and the issuance of the permit can take longer. Other city departments may be involved in the permit review process depending on your type of business and what the permit is for, including Planning Department, Fire Department, San Francisco Public Utilities Commission (SFPUC), Department of Public Works, and Department of Public Health. Building permit fees are based on the estimated value of the scope of work (scope of project), and plan submittal (if required). The fee schedule can be found online at sfdbi.org.
Additionally, there are development impact fees that may apply to your project and will be added on to your building permit before issuance. Development impact fees are fees imposed on a development project (not just new construction) as a condition of approval by various departments and agencies of the city to mitigate the impacts of increased demand for public services, facilities or housing caused by the development project.
Development projects include new construction, but also the development of a new business within an existing space not previously occupied or permitted for the new development or use – for example, a new music venue or bowling alley in a former warehouse space, or a self-service laundry mat seeking to operate in a former retail store or office space. There are many different types of development impact fees, some that target specific neighborhoods, while others are citywide. For a list of all the impact fees refer to the San Francisco Citywide Development Impact Fee Register at the Planning Department’s website at: https://sfplanning.org/resource/development-impact-fee-register or through DBI’s website at: https://sfdbi.org/development-impact-fee-collection-process-procedure. The two more common type of impact fees for small businesses are the Water and Wastewater Capacity Charge (SFPUC impact fee), and the Transit Impact Development Fee (TIDF) (SFMTA impact fee). Development impact fees are one-time fees, but can be very costly. For example, TIDF has been upwards of $40K or more on some projects, and Water and Wastewater Capacity Charges for a laundromat going into a former retail or office space for example can be six figures. The type of business, location and size can all impact the development impact fees and cost. Thus, it is important to consider the potential impact fees associated with your project in a given space prior to deciding on the space.
It is strongly recommended that you consult with DBI staff to determine if a building permit will be required and to determine if there will be any development impact fees associated with your project. Staff can also provide an estimate of the associated building permit and development impact fees, inform you if architectural plans will be needed, and provide a rough estimate of the time to obtain the permit. All of this is important for your budget and timeline and should be seriously considered and determined prior to signing a lease or purchasing the property.
Permit Center, 49 South Van Ness Avenue, San Francisco, CA 94103
Hours: M, T, Th, F: 7:30 AM - 4:00 PM; W: 9:00 AM - 4:00 PM
P: 628-652-3260 (Permit Desk); 415-554-8927
The Fire Department, as it relates to building permits, is responsible for ensuring that fire and life safety is provided and maintained in the buildings that fall under its jurisdiction. Some of the building uses that fall under the jurisdiction of the Fire Department Plan Check Section include, among others, assembly occupancies (including restaurants and other gathering places for 50 or more occupants), educational occupancies (including commercial day care facilities), hazardous occupancies (including repair garages, body shops, fuel storage, and emergency generator installations), storage occupancies (where the potential exists for high-pile storage), institutional occupancies, residential occupancies (including hotels, motels, lodging houses, residential care facilities). The Fire Department is one of several departments involved in the plan check and permit review for these and other type of business operations. Aside from checking plans for new construction and remodel projects for these types of businesses, the Fire Department also issues annual operational permits (licenses) to businesses to use or handle materials associated with certain business operations and to install equipment used in connection with certain business operations, including gas stations, parking lots, public assemblies, theaters, hazardous materials/gases, open flames, repair garages, high-pile storage, restaurants and mobile food operators. Applications for Fire Department permits shall be accompanied by plans when required. Depending on the type of fire permit, certain regulated activities require a supplemental application, additional information, site plans, floor layout plans, and proof of insurance. For information on construction inspections, call 415-554-8927. For Fire Plan Review services, call 628-652-3472. For a list of permit types, fees, and to access the application for permits visit sf-fire.org.
As a business owner, you should take measures to protect your business. Businesses often overlook accessibility laws since the business may have been in existence for many years without any complaints. A common misconception is that these businesses are exempt from compliance or “grandfathered”, however, this is not the case. There are several different bodies of law that regulate disability access, including state and federal laws. Being compliant to the regulations of one law does not relieve your responsibilities to be compliant with the other set of laws. The different laws may also contradict each other. For instance, a state law may not require any modifications to a building to bring it up to code unless and until a renovation or major alteration is planned. However, under federal law, places of public accommodation have an ongoing responsibility to remove barriers that are readily achievable even when no alterations or renovations are planned. As a business you need to familiarize yourself with the various accessibility laws in order to comply. Compliance aside, there are many reasons for including accessibility into your business plan, including the fact that it is good for business and will improve your bottom line. Businesses that provide accessible services, goods, websites and applications can expand their customer base and revenue. Below you will find a description of local, state, and federal accessibility laws, information on how to protect your business from a lawsuit, and information on tax credits and incentives for accessibility improvements in your business. It is your responsibility to research the applicable laws to ensure compliance. Contact the Office of Small Business for any questions you may have on this section.
San Francisco Administrative Code, Chapter 38
When entering into a new lease or the renewing of a current lease of a commercial space that is 7,500 square feet or less, the leasing property owner is required to provide a written “Disability Access Obligations Notice” to the lessee to identify that the property may not meet all applicable construction- related accessible standards. In addition to the written notice, the property owner must also provide an “Accessible Information Notice” brochure. The brochure helps the lessee identify what accessible issues may exist and what resources are available to mitigate the issues. The brochure is available on the Office of Small Business website under the “Disability access” section. To learn more, visit: https://codelibrary.amlegal.com/codes/san_francisco/latest/sf_admin/0-0-0-16591
San Francisco Accessible Business Entrance (ABE) Ordinance
San Francisco Building Code, Chapter 11D
San Francisco requires owners of a building with a place of public accommodation to take steps to ensure that primary entries are usable by persons with disabilities. This ordinance also requires the Department of Building Inspection to create a Disability Access Compliance Unit to enforce these provisions, as well as to consult and coordinate with relevant City agencies to assist owners in complying.
It is important for a business that is signing a new lease on a commercial space where the entryway falls under the requirements of this local ordinance, but improvements have not been made, to be prepared for discussion or lease negotiations with the property owner on who will take care of the obligation. When this does arise and there are questions on how to best handle the matter, contact the Office of Small Business. To learn more, visit: sf.gov/ABE and https://codelibrary.amlegal.com/codes/san_francisco/latest/sf_building/0-0-0-92979
California Code of Regulations, Title 24 (California Building Code)
San Francisco’s Department of Building Inspection enforces the State Building Code, Title 24 requirements. Disability access requirements of Title 24 are triggered when a premise is renovated or newly constructed. All construction work must comply with the disability access requirements of Title
24. There are four key requirements for businesses to use in making their place of public accommodation accessible: 1) the building’s main entrance, the primary route to the renovated area; 2) access to goods and services; 3) restrooms; 4) and any other necessary measures. For most small businesses with tenant improvement costs under the “valuation threshold” — a dollar amount that is set annually, their obligation to do such additional access work is capped at 20% of construction costs. A business may be able to meet their access improvement obligations under the 20% rule per the California Building Code, but it may not meet the access obligations under the Federal ADA. It is important to know this as architects generally will work with the California Building Code 20% rule and not the Federal ADA. As a result, many businesses believe they are compliant when they may not be.
A good architect, preferably one that is Certified Access Specialist program (CASp) certified, can best advise you if you are leasing a space that may have access issues with the entryway and restrooms and you may not be able to afford making the space fully compliant. Contact the Office of Small Business for more information if needed.
California Civil Rights Laws
In addition to Title 24, California has civil rights laws — the Unruh Civil Rights Act and the California Disabled Persons Act — that protect the right of individuals with disabilities to the full use and enjoyment of all business establishments. Both laws provide that any violation of the ADA is a violation of state law. Plaintiffs often file lawsuits in state court under the Unruh or Disabled Persons Act rather than the ADA (federal law), because state laws allow plaintiffs to recoup three times their actual damages, and in the event that no actual damages are sustained, plaintiffs may recover statutory damages.
The Construction-Related Accessibility Standards Compliance Act (Senate Bill 1608)
This state law provides those who are sued for accessibility claims a 90-day stay (action taken by a court to temporarily stop a legal proceeding) if the defendant previously obtained either a Certified Access Specialist program (CASp) inspection report or “CASp determination pending” certificate. Additionally, Senate Bill 1608 clarifies that statutory damages are available only where the plaintiff is denied full and equal access on a particular occasion where the plaintiff personally encountered or had actual knowledge of a violation.
If you are sued for accessibility issues and previously had a CASp inspection completed, you must file with the court a copy of the CASp inspection report. The court considers the complaint, the CASp report, and the plaintiff’s allegations to determine whether the case can be settled in whole or in part. The goal behind Senate Bill 1608 was to expedite court procedures to minimize attorneys’ fees and litigation expenses for those who obtain a CASp certificate.
Disability Access Law (Senate Bill 1186)
The main provisions of this law pertain to business that have received a lawsuit. It allows for one of two means for reduction in the statutory damages when the business has received a Certified Access Specialist program (CASp) inspection.
- A business is allowed 60 days to fix an ADA violation and their statutory damages reduced from $4,000 to $1,000 if the business is located in a building built after 2008 or has received a CASp inspection;
- A business with under 26 employees that has not had a CASp inspection has 30 days to fix violation(s) and their statutory damages reduced from $4,000 to $2,000.
The law requires a $4.00 fee collected annually with the business registration fee to help increase CASp inspections. It is with these funds that San Francisco is able to subsidize CASp inspections for businesses. The law also prohibits letters being sent to businesses to include a “demand for money” and requires commercial leases need to state whether the property has received a CASp inspection and/or whether any violations were found.
Americans with Disabilities Act (ADA)
The Americans with Disabilities Act of 1990 (ADA) prohibits discrimination and ensures equal opportunity for persons with disabilities in employment, State and local government services, public accommodations, commercial facilities, and transportation. In addition, the ADA says that a place of public accommodation has a continuing obligation to remove architectural barriers (barrier removal) to make sure the business is accessible, even when construction is not otherwise contemplated. The ADA regulations require that you make access improvements to your business premises, ensuring that entrances, aisles, bathrooms, service counters, dining tables and other features are accessible to and useable by people with disabilities. You need to remove barriers only if removal is “readily achievable”, which means easily accomplishable and able to be carried out without much difficulty or expense. Additional resources and guidelines are located on the federal Department of Justice ADA site including the following publications for small businesses:
- ADA Guide for Small Businesses: www.ada.gov/smbusgd.pdf
- Readily Achievable Checklist for Existing Business Facilities: www.ada.gov/racheck.pdf
How to protect your business from ADA lawsuits
- Hire a Certified Access Specialist (CASp) to survey your premises to identify barriers to access.
- Review the report provided by your CASp which will either certify that you have complied with state and federal disability access laws, or explain the steps necessary to achieve full compliance. The report will also provide a recommended timeline for removal of all readily achievable barriers to access.
- Remove barriers according to the CASp report’s timeline and continue obligations to remove architectural barriers to ensure your business is accessible.
- If you receive a verbal or written complaint, follow up immediately. Delay tends to lead to litigation. Therefore:
- Do not ignore the letter or other complaint sent to you by a person with disability. Letters may be precursors to a lawsuit or complaint filed with the Department of Building Inspection.
- Respond to the letter or other complaint. You may respond by simply letting the complainant know that you take their concerns seriously and will consult with a professional, such as CASp inspector and/or legal counsel.
- Consult with a CASp inspector if you have not done so already.
- Immediately call an experienced attorney if you are sued.
Disability Tax Incentives
Businesses can take advantage of federal tax incentives available to help cover costs of making access improvements for customers with disabilities:
- Disabled Access Credit
The Disabled Access Credit is a tax credit (IRS Form 8826) for small businesses that incur expenditures for the purpose of providing access to people with disabilities. An eligible small business is one that earned $1 million or less or had no more than 30 full time employees in the previous year. An employee is considered full time if employed at least 30 hours per week for 20 or more calendar weeks in the tax year. Eligible small businesses may take a credit of up to $5,000 (half of eligible expenses up to $10,250, with no credit for the first $250) to offset their costs for access, including barrier removal from their facilities (e.g., widening a doorway, installing a ramp), provision of accessibility services (e.g., large-print, audio, Braille), and provision or modification of equipment.
- Barrier Removal Tax Deduction
The Barrier Removal Tax Deduction is a tax deduction for businesses of any size to remove architectural and transportation barriers for people with disabilities and the elderly. Businesses may claim a deduction of up to $15,000 a year for qualified expenses and may use this deduction together with the Disabled Tax Credit if the expenses meet the requirements of both incentives. Businesses claim the deduction by listing it as a separate expense on their income tax return.
A business that annually incurs eligible expenses to bring itself into compliance with the ADA may use these tax incentives every year. To access tax incentive forms and publications go to the IRS website at: www.irs.gov.
Loans for Disability Improvements
There are both local and state loans available for business not engaged in a lawsuit for disability access improvements. You can find these resources on the Office of Small Business website at sf.gov/OSB in the “Resources” section under “Loans”.
Important Reminders for Small Businesses
Even if you are not engaged in construction, you are subject to federal and state disability rights laws. Compliance with building code requirements does not relieve you of the obligation to comply with civil rights laws, and vice versa. The Department of Building Inspection (DBI) only reviews the California disability access code requirements triggered by the renovation work. When DBI signs off on a building permit certificate of occupancy, DBI does not conduct a general review of the premises to identify disability access code violations. The primary responsibility for compliance with building codes lies with your architect and contractor. Even if DBI approves the building permit or certificate of occupancy, you may still have a disability access code violation. If so, you, not the City, will be responsible for the access violation.
Additional information regarding accessibility requirements:
California Code of Regulations, Title 24 Division of State Architect (DSA)
State Architect of California
1102 Q Street, Suite 5100, Sacramento, CA 95811
American with Disabilities Act Department of Justice ADA Information
California Commission on Disability Access
400 R Street, Suite 310, Sacramento, CA 95811
San Francisco Office of Small Business
City Hall, Room 140, San Francisco, CA 94102 (general business assistance)
Permit Center, 49 South Van Ness, San Francisco, CA 94103 (permit support)
Disaster preparedness can prevent a bad situation from becoming worse. Whether it’s a natural or human-made disaster, advanced planning and being prepared can minimize the financial impact and allow you to reopen your business quickly following an incident. Below are some helpful things to consider.
Businesses should have adequate and proper insurance for floods, fires and other disasters.
Protect your files
Backup and make copies of important business documents and store them at a safe location as well as electronically.
Reduce debris from clogging drains in and around your business, and inspect facilities for potential flooding and leaks. Elevate inventory properly when able to do so in order to minimize damage.
Plan and communicate with staff
Put together a disaster preparedness checklist, gather and identify emergency supplies, develop protocols to protect the business and the employees, provide training, and assess your plans.
Register for citywide emergency alerts and instructions following a natural disaster, major police, fire or health emergencies, or significant transportation disruptions through AlertSF.org.
Resources available following a disaster
File claims when recovering from a disaster, access loans and relief funds, reach out for support and ask for assistance to begin operating your business again.
For more information on disaster preparedness, visit www.sf72.org. Contact the Office of Small Business to find out if disaster relief is available.Back to top
Licenses / Permits
Certain type of businesses will require additional permits and licenses from local, state, and/or federal government agencies.
Additional permits and/or licenses regulate and/or authorize the specific business activity when applicable. These permits and licenses are often referred to as regulatory permits and licenses, and/or operating or operational permits and licenses, permit to operate, or license. The following is a list of the more common local, state, and federal regulatory agencies with a description of the permit/licenses they administer. Depending on your type of business, you may need several licenses from several agencies. It is your responsibility to research the applicable regulations for your business and register and file accordingly.
Department of Public Health
Environmental Health Branch
Permit Center, 49 South Van Ness Avenue, San Francisco, CA 94103
Hours: M, T, Th, F: 7:30 AM - 4:00 PM; W: 9:00 AM – 4:00 PM
The San Francisco Department of Public Health (DPH) regulates a number of different type of businesses and issues operating or regulatory permits, also referred to as a license, for these businesses. Businesses regulated by DPH include the following: food and beverage businesses (grocery store, deli, coffee shop, café, restaurant, bar), laundries (dry cleaners), pet shops, pet hospitals (containing live animals), massage practitioner and massage establishment, tattoo and body piercing, permanent cosmetic application, medical cannabis dispensary, tobacco sales, hazardous material storage, swimming pool and spa, weight and measuring equipment (including taximeter), point of sale systems, and more. Businesses must apply for the license prior to operating, and must pay a filing fee (a one-time application fee) at time of filing to DPH, as well as an annual license fee to the Office of the Treasurer and Tax Collector after the application is approved by a Health Inspector. DPH licenses are renewed annually by March 31st. Depending on when you file, the annual license may be prorated. Application/filing fees often include additional fees for a Fire Department Referral and a Zoning Referral to the Planning Department. Additionally, some type of businesses will require a Plan Check Deposit fee. A Plan Check Deposit fee is a fee collected by DPH to review plans if required to be submitted. New food facilities commonly will be required to pay the Plan Check deposit fee, as well as existing food facilities that will be remodeling for example. DPH will charge an hourly rate to review the plans and charge it against the deposit. If there is money left over in the Plan Check Deposit, you will receive a refund. Please refer to the Fee Schedule online at sf.gov/DPH for current fee information, including application fee, referral fees, plan check fee, and annual license fees. It is important to apply for Health permits well in advance of your proposed opening, usually at least 6-8 weeks in advance or longer for more complex projects where there is extensive remodel or new construction involved. In these cases, please note that DPH will be part of the Department of Building Inspection’s Building Permit Application and review process.
San Francisco Public Works
Bureau of Street Use and Mapping (BSM)
Permit Center, 49 South Van Ness Avenue, San Francisco, CA 94103
Hours: M, T, Th, F: 7:30 AM - 4:00 PM; W: 9:00 AM - 4:00 PM
San Francisco Public Works’ Bureau of Street Use and Mapping (BSM) ensures that city sidewalks and streets are safe and accessible by permitting and inspecting the use of the public right of way. BSM issues permits for café tables and chairs, mobile food facilities (including a food cart on the street and a food truck or trailer in the parking lane), display merchandise (produce display in front of market), free sample merchandise, fixed pedestal news racks, parklets and more. These permits typically require site plans showing how you will occupy the sidewalk and the dimensions of the sidewalk width and the objects that will occupy the sidewalk etc. Public notification is often required, and a public hearing to determine whether to approve the use of the public right-of-way, approve with conditions, or not approve may be necessary. After receiving your application with site plan, BSM staff will inspect the site to ensure compliance with city codes. If notification is required, they will ask you to submit a notification packet, including a list of property owners, residents, and businesses to be notified, mailing labels for these individuals, and postage. In some cases, if a member of the public opposes your permit, a public hearing is scheduled and a determination is made.
To apply for one of these permits, it is strongly advised to visit the permit section at sfpublicworks.org and review the requirements by permit type. Permit fees vary by permit type. You should refer to the fee schedule noted under each permit type for more information on these fees. These permits must typically be renewed every year. You may also visit the BSM counter for a quick overview and to ask specific questions about the permit, or you may contact the Office of Small Business for additional assistance and information.
Permit Center, 49 South Van Ness Avenue, San Francisco, CA 94103
Hours: 10:00 AM - 4:00 PM
The Entertainment Commission regulates, promotes and enhances entertainment and nightlife in the city. Most temporary and fixed-place entertainment-related places and events must be approved by the Entertainment Commission. The Entertainment Commission issues permits for place of entertainment venues, limited live performances within a business, one-night dances, extended hours, itinerant shows, loudspeakers, mechanical amusement devices (11 or more), and more. For additional information on permits issued by the Entertainment Commission and to access the applications visit their website at sf.gov/EntertainmentCommission. It is important to submit all of the information required on the application to better assist the Entertainment Commission to process your application. It is recommended that you contact the Entertainment Commission office at 628-652-6030 to set up an appointment for detailed assistance including permit process and fee information.
850 Bryant Street, Room 505, San Francisco, CA 94103
Hours: 9:00 AM - 12:00 PM and 1:00 PM - 4:00 PM
The San Francisco Police Department regulates certain types of businesses and issues permits to operate, including parking lot operators, bingo and other games of chance, antique dealers, pawn brokers, tow car operators, auto rentals, escort services, firearms dealers, fortune tellers, junk dealers, tour guide operators and tour guides, valet parking, street photographer, and more. All permit applications must be submitted in person by the applicant. There is an application fee, which generally includes a fee for fingerprints, and a surcharge. Fees are not refundable. One or more city departments may be involved in the permit process, including among others, Fire Department, Planning Department, Health Department, Building Department, and the San Francisco Municipal Transportation Agency (SFMTA). All Police permits are considered at a public hearing. For additional information on applying for a Police permit including fee information and to access the application visit www.sanfranciscopolice.org or contact the Police Permit Bureau directly at 415-553-1115. Police permits are generally renewed annually in March via payment to the Treasurer & Tax Collector’s Office.
San Francisco Public Utilities Commission (SFPUC)
49 South Van Ness Avenue, San Francisco, CA 94103
The San Francisco Public Utilities Commission (SFPUC) assesses a Water and Wastewater Capacity Charge to recover the costs associated with providing additional water capacity and additional wastewater facility capacity to new users and existing users requiring additional capacity. These charges are assessed with the building permit for new construction, remodel, alterations, or repairs. For more information on Capacity Charges see the FAQ sheets at sfpuc.org/accounts-services/service-installations/capacity-charges and at the Building Department at 49 South Van Ness Avenue, or call SFPUC staff at 628-652-6040. Staff should be able to provide you an estimate of the Water and Wastewater Capacity Charge for your specific project based on information you provide about the proposed project. Additionally, the SFPUC permits other business activities for waste-water discharge, including laundries, food processors, hospitals, restaurants, dental offices, and mobile washers.
San Francisco Arts Commission
Art Vendor Program
401 Van Ness Ave., Suite 325, San Francisco, CA 94102
The San Francisco Arts Commission Art Vendor Program certifies artists to sell their own handcrafted items in designated spaces in some of the city’s most popular destinations, including Justin Herman Plaza across the street from the Ferry Building, near Fisherman’s Wharf, and along Market Street. After submitting an application to the program, artists must demonstrate to a screening committee that they make the artwork they sell. In return, artists receive certificates licensing them to sell their work in the spaces designated by the Board of Supervisors. Applications may be submitted online at: www.sfartscommission.org/find-opportunities/art-vendor-programs. Once approved by the screening committee, the artist can either choose to purchase a quarterly certificate or an annual certificate. For additional information, including a list of screening categories, what to prepare for the screening, a map of the designated locations, fee information, and other requirements, visit the Art Vendor Program page at: www.sfartscommission.org. If you have questions about whether or not your art qualifies, you may also contact Art Vendor Program office at email@example.com.
Alcohol Beverage Control (ABC)
33 New Montgomery Street, Suite 1230, San Francisco, CA 94105
The Alcohol Beverage Control Agency (ABC) licenses, enforces and regulates the manufacture and sale of alcoholic beverages in the state of California. There are many license types, including on-sale and off-sale. On-sale licenses allow for the on-site consumption of alcoholic beverages and are for restaurants or bars, for example, while off-sale licenses are generally for liquor stores, grocery stores and markets where the alcohol will be taken out and consumed off-site. Some of the most common license types are Type 20 (off-sale beer and wine), Type 21 (off-sale general), Type 41 (on-sale beer and wine-eating place), Type 42 (on-sale beer and wine-public premises), Type 47 (on-sale general-eating place), and Type 48 (on-sale general-public premises). Some license types, such as Types 21, 47 and 48 are no longer available directly from the ABC. In these cases, you would need to purchase these licenses from the secondary market (an existing licensee who is selling their license). As a result, you will pay market rate, which can be quite expensive ranging from $50K for the Type 21 to over $200K for the Type 47. Furthermore, you would also need to apply to ABC to have the license transferred to you and your location. There are some restrictions with transferring of licenses. You should consult with an ABC representative to ensure the license can transfer prior to purchasing it from the secondary market. Additionally, prior to purchasing or applying for an alcohol license, you must ensure that the zoning permits the alcohol use. To do this contact the Public Information Center at the Planning Department at 628-652-7600. There are alcohol restricted use districts in some parts of the city that may prohibit new alcohol uses in those areas.
Any person wishing to obtain an ABC License or transfer an existing one should apply at the nearest ABC office in person. All parties concerned including applicants for new license, transferors (present license holder), and transferees (applicant for a transfer license) should be present when applying. Applicants will need to provide considerable detailed personal information, and fingerprints will be required of all individual applicants, managers and managing officers of applicant corporations. An ABC employee will advise all applicants in person of pertinent laws, rules and regulations and help answer any questions. Other city departments, including the Police Department, will be notified of your application and may get to weigh in on the approval process. Generally, the Police Department is concerned with the concentration of alcohol licenses and public safety issues in the proposed area. It is recommended you consult with the Police Department Alcohol Licensing Unit (ALU) at 415-837-7269 in advance to determine if there may be any potential issues with the approval of your application to ABC. Furthermore, a Public Convenience and Necessity resolution from the San Francisco Board of Supervisors is also typically required for most ABC license types.
CA Department of Tax & Fee Administration (CDTFA)
1515 Clay Street, Suite 303, Oakland, CA 94612
P: 415-356-6600, 800-400-7115
The California Department of Tax & Fee Administration (CDTFA) collects California state sales and use tax, as well as fuel, alcohol, and tobacco taxes and fees by issuing a seller’s permit and resale license, and establishing a use tax account for businesses. Anyone engaging in business in California who intends to sell or lease tangible personal property that would ordinarily be subject to sales tax if sold at retail must obtain a seller’s permit. The requirement to obtain a seller’s permit applies to individuals as well as corporations, partnerships, and limited liability companies. Both wholesalers and retailers must apply for and obtain a permit. There is also a temporary seller’s permit which is normally issued to selling operations lasting no longer than 90 days at one location. The temporary seller’s permit is ideal for Christmas tree lots, and pumpkin patch operations. Businesses are required to collect the sales tax on the items they sell and report and pay the tax to the state. By obtaining a seller’s permit you essentially are creating an account with the state and will be required to report and pay the tax usually quarterly. You may register for the seller’s permit in person at the local office, or online. The seller’s permit is free to obtain although in some cases, a deposit may be required at the time of setting up your account. If you have any questions about the seller’s permit or how to apply the tax, contact the CDTFA local office listed above.
Department of Consumer Affairs (DCA)
1625 North Market Blvd., Suite N 112, Sacramento, CA 95834
The Department of Consumer Affairs (DCA) protects consumers and professionals by issuing licenses in 250 business and professional categories, including doctors, dentists, optometrist, contractors, barbers, cosmetologists, accountants, architects, acupuncturists, automotive repair, manicurist, psychologist, private & postsecondary education, and more. DCA includes 40 regulatory entities. These entities establish minimum qualifications for licensure. They also license, register, or certify practitioners, investigate complaints and discipline violators. If your business consists of any of the above business types you will need to contact the specific licensing bureau to get licensed, certified, or registered. This is in addition to structuring your business and registering locally. This is a regulatory license from the state for the type of business you do. If you are not sure if your business requires a license from the state, contact the DCA or visit their website for a full list of boards and bureaus under their jurisdiction.
California Department of Motor Vehicles (DMV)
1377 Fell Street, San Francisco, CA 94117
P: 800-777-0133 / 916-229-3126
The Department of Motor Vehicles (DMV) Occupational Licensing Section is responsible for issuing permits for auto dealers, salespersons, lessor-retailers, distributors, dismantlers, traffic violator schools, driver’s education curriculum, driving schools and more. The DMV’s Registration Operations Division issues Motor Carrier Permits (MCP) to persons and entities that are paid to transport property in their motor vehicle regardless of vehicle size, type, or weight, except household movers and passenger carriers licensed under Household Goods & Services and the California Public Utilities Commission, respectively. For more information on all DMV permits issued to businesses and or to find out if your business needs a DMV permit, contact the DMV directly or visit the website and search for Occupational Licensing and Registration Operations Division.
California Department of Social Services
Community Care Licensing Division (CCLD)
851 Traeger Avenue, Suite 360, MS 29-16, San Bruno, CA 94066
851 Traeger Avenue, Suite 360, MS 29-24, San Bruno, CA 94066
Adult Care (non-medical)
851 Traeger Avenue, Suite 360, MS 29-16, San Bruno, CA 94066
P: (650) 266-8800
The Community Care Licensing Division of the Department of Social Services is responsible for licensing non-medical senior and adult residential care, and child care facilities. For more information on each, contact the respective office listed above and visit the website where you will find detailed permitting information for each.
California Public Utilities Commission (CPUC)
505 Van Ness Avenue, Room 2104, San Francisco, CA 94102
The California Public Utilities Commission (CPUC) is responsible for regulating and permitting transportation companies, including passenger carriers such as limousines, airport shuttles, charter and scheduled bus operators, tour buses, transportation network companies, and more. For more transportation company licensing information and to access the applications visit the CPUC website.
California Contractors State License Board (CSLB)
9821 Business Park Drive, Sacramento, CA 95827
The Contractors State License Board (CSLB) protects consumers by licensing and regulating California’s construction industry. There are over 40 different license classifications, including general building contractor, subcontractors, and specialty contractors. Generally, anyone who constructs or alters any building, highway, road, parking facility, railroad, excavation, or other structure in California must be licensed by the CSLB if the total price (combined labor and material costs) of one or more project contracts is $500 or more. For a list of all the classifications or to inquire if your business is regulated by the CSLB visit the CSLB website where you can download the application and learn about exam information and other important industry information.
Department of Industrial Relations
Division of Labor Standards Enforcement (DLSE)
455 Golden Gate Avenue, San Francisco, CA 94102
The Department of Industrial Relations Division of Labor Standards Enforcement (DLSE) is responsible for ensuring minimum labor standards, providing information on California labor codes (including worksite postings), and issues licenses, registers or certifies talent agents, transporters and supervisors of minors involved in door-to-door sales, garment manufacturers, studio teachers, car washing and polishing firms, janitorial suppliers, service, and contractors, minors aged 15 days to 18 years employed in the entertainment industry, and more. To find out if your business should be licensed by DLSE, visit the website.
Department of Public Health Food & Drug Branch
1500 Capitol Avenue. MS. 7602, Sacramento, CA 95899-7435 (courier services)
P.O. Box 997435, Sacramento, CA 95899-7435 (non-courier services)
The Food and Drug Branch (FDB) of the California Department of Public Health (CDPH) regulates the manufacture, processing, storage and distribution of food products in the state, more specifically, when these products are offered for wholesale as opposed to retail which is handled by the local San Francisco Public Health Department. California law requires that wholesale food businesses obtain an FDB license, certificate or registration for these activities. Processors of general food commodities (e.g. baked goods, noodles, processed fresh vegetables, seafood, snack foods, dietary supplements, etc.) must obtain a Processed Food Registration (PFR) from FDB. The PFR allows firms to manufacture products not specifically covered by another FDB license. The FDB is also responsible for Medical Device Safety, Drug Safety, and Cosmetic Safety, and more. For additional information, visit the CDPH website.
Office of the Attorney General
California Department of Justice
455 Golden Gate Avenue, Suite 11000, San Francisco, CA 94102
The California Department of Justice protects consumers by registering certain industries and organizations, including check cashing businesses, seller of travel businesses, charities and raffles, foreclosure consultants, credit service organizations, gambling activities, international student exchange placement organizations, seller-assisted marketing plans, telephonic sellers, and tobacco product manufacturers, and more. For additional information on registering one of these types of businesses or to inquire if your particular business is regulated by the DOJ contact the Office of the Attorney General or visit their website.
Customs and Border Protection (CBP)
555 Battery Street, Room 319, San Francisco, CA 94105
To avoid potential problems in the clearance of your merchandise, U.S. Customs and Border Protection (CBP) strongly recommends that you familiarize yourself with CBP policies and procedures prior to importing/exporting your goods. You should also be aware of any entry requirements specific to the particular commodity you are importing/exporting, including those of other federal agencies. To assist you, CBP offers the following tips for new importers and exporters on their website at: https://www.cbp.gov/trade/basic-import-export/importer-exporter-tips.
Department of Commerce
International Trade Administration, U.S. Commercial Service
San Francisco U.S. Export Assistance Center
75 Hawthorne Street, 2nd Floor Suite 2500, San Francisco, CA 94105
P: 415-705-2300 E: firstname.lastname@example.org
The U.S. Commercial Service is the lead trade promotion agency of the U.S. Government and help U.S. companies get started in exporting or increase sales to new global markets. The San Francisco U.S. Export Assistance Center is dedicated to helping small-to-medium sized companies develop international markets. The experienced staff of International Trade Specialists will help you to identify and evaluate international partners, navigate international documentation challenges, and create market entry strategies.
Food and Drug Administration (FDA)
10903 New Hampshire Ave, Silver Spring, MD 20993-0002
P: 888-INFO-FDA (888-463-6332)
P: 888-SAFEFOOD (888-723-3366) for food-specific information
The Food and Drug Administration (FDA) is charged with protecting the public health by assuring that foods (except for meat from livestock, poultry and some egg products which are regulated by the U.S. Department of Agriculture) are safe, wholesome, sanitary and properly labeled; ensuring that human and veterinary drugs, and vaccines and other biological products and medical devices intended for human use are safe and effective; protecting the public from electronic product radiation; and assuring cosmetics and dietary supplements are safe and properly labeled. For more information on specific programs under the FDA, including regulations and import/export information for these industries, visit the FDA website or call the numbers listed above.
U.S. Department of Agriculture
Food Safety and Inspection Services (FSIS)
USDA Meat and Poultry Hotline
(888) MPHotline (888-674-6854)
Small Plant Help Desk
P: 877-FSIS-HELP (877-374-7435)
The U.S. Department of Agriculture’s (USDA) Food Safety and Inspection Service (FSIS) is the public health agency responsible for ensuring that the nation’s commercial supply of meat, poultry, and egg products is safe, wholesome, and correctly labeled and packaged. FSIS provides compliance assistance, food safety education, and information on importing and exporting meat, poultry and egg products.Back to top
Now that you have your own business, you have different tax requirements. This section contains information on city, state and federal tax requirements.
Generally, businesses pay federal and state taxes on their income, employment taxes if they have employees, state sales and use tax if they sell tangible goods, and local city taxes if applicable. Taxes are complex and subject to change. Included below is some information on city, state and federal tax requirements. Because of the complex nature of business taxes, it is strongly recommended that a business consult with or retain the services of a tax professional. Remember, your Employer Identification Number (EIN) is used for filing federal income and payroll taxes, as well as withholding in-
come taxes for employees. (Note: Non-U.S. Citizens that do not have a Social Security Number may obtain a Tax ID Number from the Internal Revenue Service (IRS). Visit the IRS website for more information at www.irs.gov.)
In addition to the annual Business Registration fee, some businesses may be subject to San Francisco business taxes and fees. San Francisco annual business taxes include the Gross Receipts Tax, Administrative Office Tax, Early Care and Education Commercial Rents Tax, and Homelessness Gross Receipts Tax, among others. There are also special industry taxes. Certain businesses are required to report and pay annual taxes if applicable. Below is a brief description of a few business taxes. For a complete list of San Francisco business taxes and current tax rates, visit sftreasurer.org.
Gross Receipts Tax
Gross receipts refers to the total amount of money received from doing business in San Francisco and includes amounts derived from sales, services, dealings in property, interest, rent, royalties, dividends, licensing fees, other fees, commissions and distributed amounts from other business entities. Those who must file the Gross Receipts Tax as part of the Annual Business Tax Return include persons (other than lessors of residential real estate) who in the tax year they were engaged in business in San Francisco and were not otherwise exempt had more than $2,000,000 in combined taxable San Francisco gross receipts.
Taxpayers that do not meet the minimum filing amounts stated above are not required to file a Return. For businesses that do meet the filing requirement, the current tax rates for the Gross Receipts Tax, Payroll Expense Tax, and Administrative Office Tax can be found on the San Francisco Treasurer and Tax Collector’s website at sftreasurer.org.
Business Personal Property Tax
Businesses in the City & County of San Francisco are required by California state law to annually file the Business Personal Property Tax using the Business Property Statement (Form 571-L). Business Personal Property includes items like machinery, equipment, fixtures, and leasehold improvement held or used in connection with a trade or business. Unlike real property, Business Personal Property taxes are based on information provided to the Office of the Assessor-Recorder on an annual basis and is reassessed annually because businesses may have acquired new or disposed of existing personal property during the year. For more information, visit the Office of the Assessor-Recorder’s website at www.sfassessor.org/property-information/business-owners.
Transient Occupancy Tax
San Francisco imposes a 14% transient occupancy tax on the rental of accommodations for stays of less than 30 days. The transient occupancy tax is also known as the Hotel Tax. The tax is collected by hotel operators and short-term rental hosts/sites and remitted to the City. For more information on the Transient Occupancy Tax visit: sftreasurer.org/business/taxes-fees/transient-occupancy-tax-tot.
San Francisco currently imposes a 25% tax on total parking charges for all off-street parking throughout the city. Parking Operators file and pay taxes monthly and have additional requirements, including a Certificate of Authority, a Parking Bond, and Revenue Control Equipment fees. If an operator receives $40,000 or less per year in parking revenue per location and less than $250,000 across all locations, the location may qualify for designation as a Small Operator. Small Operators do not need a Certificate of Authority or parking bond, and file and pay parking taxes annually by January 31st.
For more information on the Parking Tax visit: sftreasurer.org/business/taxes-fees/parking-tax.
Cannabis Business Tax
The Cannabis Business Tax was approved by San Francisco voters on November 6, 2018, effective January 1, 2023. In addition to the existing Gross Receipts Tax, the Cannabis Business Tax imposes a gross receipts tax of 1% to 5% on the gross receipts from Cannabis Business Activities attributable to the city. For more information on the Cannabis Business Tax visit: sftreasurer.org/business/taxes-fees/cannabis-business-tax-cb.
Sugary Drinks Tax
San Francisco imposes a one cent per fluid ounce excise tax on the initial distribution within San Francisco of sugar-sweetened beverages, syrups, and powders. This tax may apply to some retailers. For more information on the Sugary Drinks Tax visit:
Cigarette Litter Abatement Fee
Every cigarette retailer in the City and County of San Francisco is responsible for paying a Cigarette Litter Abatement Fee per pack of cigarettes sold. Filing and fee payment are due on a quarterly basis. For more information visit: sftreasurer.org/business/taxes-fees/cigarette-litter-abatement-fee-cig.
A business operating in California must pay taxes based on its annual income. Such taxes are paid to the Franchise Tax Board (FTB). A business that registers with the Secretary of State has completed the necessary procedure to register for purposes of annual taxes payable to the FTB. The Secretary of State communicates the registration of the business with the Franchise Tax Board, which in turn sends the company the appropriate forms to file annual taxes. Your business structure determines which taxes apply to your business and how you pay them. Below are additional details on state income taxes, employment taxes, and sales and use tax.
Corporate Income Tax
California’s corporate income tax of 8.84% applies to corporations and is based on income earned in California. Income from “pass-through” entities like S corporations, limited liability companies (LLCs), partnerships, and sole proprietorships, is subject to the state’s tax on personal income.
California’s franchise tax applies to S corporations, standard limited liability companies (LLCs), limited partnerships (LPs), and limited liability partnerships (LLPs), as well as traditional corporations (C corporations). The corporations and LLCs that are subject to the corporate income tax are not subject to the franchise tax. With the exception of S corporations, the franchise tax is a flat fee of $800 in most cases.
Alternative Minimum Tax
California has an alternative minimum tax (AMT) that is similar to the Federal AMT. It is calculated in parallel with your regular taxes and generally targets corporations with Alternative Minimum Taxable Income (AMTI) over $40,000.
As a sole proprietor, income from your business is distributed to you directly. You will pay taxes on that income on your personal tax return and attach a Profit or Loss Statement Business form (Schedule C) to your state and federal returns.
In a general partnership, the partners receive income from the business directly. They pay tax on that income on their personal federal and state tax returns. The partners must also file a Partnership Return of Income (California Form 565).
Limited Liability Company (LLC)
Standard California limited liability companies (LLC) are required to pay the minimum franchise tax of $800. If your LLC will make more than $250,000, you will also pay the LLC fee, which is a flat fee based on income and ranges from $0 to $11,790. As in a General Partnership, members of an LLC are taxed at the member level and pay taxes on their personal federal and state tax returns.
Limited Liability Partnership (LLP) and Limited Partnership (LP)
Limited liability partnerships (LLP) and Limited Partnerships (LP) pay the Limited Partnership Annual Tax of $800. As with General Partnerships, the partners must also file the Partnership Return of Income (California Form 565).
Corporations doing business in California are required to prepay their annual franchise tax. Payments for the first taxable year are made to the Secretary of State which in turn transmits the amount to the FTB. Subsequent annual payments of franchise tax are made to the FTB directly. The amount of tax payable
to the FTB is measured by the income of the preceding income year derived from business done in California, with an $800 minimum payment.
C corporations are taxed as separate entities from their owners. Tax is based on the C corporation’s net income. There are two levels of tax for C corporations. A C corporation pays tax on net income, and shareholders pay tax on dividends. The annual tax for C corporations is the greater of 8.84% of the corporation’s net income or $800.
The annual tax for S corporations is currently the greater of the S corporation’s net income or $800. S corporation shareholders will owe taxes to the state on their share of the company’s income.
The FTB offers information on required taxes for each type of business structure. See helpful FTB publications including:
- Form 565 Booklet – Partnerships
- Form 568 Booklet – Limited liability companies
- Form 100 Booklet –Corporations
- Form 100S Booklet – S Corporations
- Publication 1060 – Guide for Corporations Starting Business in CA For more information:
Franchise Tax Board
P: 800-852-5711 or 916-845-6500
State employment tax
State law requires employers to register with the California Employment Development Department (EDD) for state income tax withholding and employment taxes. Employers must register with EDD within 15 days after paying more than $100 in total wages to one or more employees during a calendar quarter, or whenever a change in ownership occurs.
You may register online, by mail or by phone. When you register, you must provide EDD with your Federal Employer Identification Number (EIN or FEIN). The EDD will assign you a State employer account number, which will be preprinted on all your EDD reports to identify your business to the state. You should provide this number to any bank or payroll service that may prepare your business tax forms.
You must report and pay the following employment taxes to the EDD:
State Income Tax (employee pays; employer withholds)
State income tax is the responsibility of the employee; however, the employer withholds the tax and pays it to the California Franchise Tax Board on behalf of the employee. State income tax is based on the “adjusted gross income” reported — the income amount remaining after various deductions are taken, determined according to individual circumstances. State income taxes are assessed at graduated rates on the “adjusted gross income.”
State Disability Insurance (employee pays; employer withholds)
The State Disability Insurance (SDI) program provides benefits to eligible workers experiencing a loss of wages when they are unable to perform their regular or customary work due to a non-occupational illness or injury, or disability resulting from pregnancy or childbirth. SDI is funded entirely by employees through withheld wages and paid to either the SDI fund or a voluntary plan for disability insurance.
State Unemployment Insurance (employer pays)
The purpose of the State Unemployment Insurance (SUI) program is to provide financial assistance to people who are temporarily out of work through no fault of their own. In California, this program is financed entirely by employers through a payroll tax based on the first $7,000 in wages paid to each employee in a calendar year. Employers are required to pay their accumulated SUI taxes four times a year. Rates are adjusted according to the employer’s experience of unemployment claims. Generally, the more there is employee turnover, the higher the employer’s unemployment insurance rate will be.
Employment Training Tax (employer pays)
In 1982, the California State Legislature created the Employment Training Panel (ETP) as a cooperative business labor program to provide employers with skilled workers and provide workers with good, long-term jobs. The Legislature also established the Employment Training Tax (ETT). All tax-rated employers, including new employers, are subject to ETT which is used to fund the ETP’s program and training contracts. All employers are assessed a small percent of the first $7,000 of each employee’s wages.
For more information:
Employment Development Department
P: 888-745-3886 (Taxpayer Assistance Center) W: www.edd.ca.gov
(Note: Check the website for information about office locations and services offered)
Publications for small business include:
- Publication 334 – Tax Guide for Small Business
- Publication 583 – Taxpayers Starting a Business & Keeping Records
- Publication 552 – Record-keeping for Individuals and a list of Tax Publications
- Publication 509 – Tax Calendar
- Publication 1518A – Tax Calendar Options for Small Businesses and Self-Employed
State sales tax
If your business sells merchandise (for example, clothing, furniture, toys, hot food products, office equipment, etc.) within the State of California, California law requires you to register with the California Department of Tax and Fee Administration (CDTFA). You must get a seller’s permit for each location in the state. You must report and pay sales tax on your taxable sales, and pay any use tax due on items purchased to help you run your business. If a business changes ownership or business location, it must obtain a new permit.
Whether selling at retail or wholesale, you can apply for a seller’s permit online at www.cdtfa.ca.gov.
The requirement to obtain a seller’s permit applies to individuals, partnerships, husband and wife co-ownership, LLPs, corporations, LLCs and organizations.
You must obtain a seller’s permit if you:
Are engaged in business in California and intend to sell or lease tangible personal property that would ordinarily be subject to sales tax if sold at retail
Will make sales for a temporary period, normally lasting no longer than 90 days at one or more locations (e.g. Christmas tree lots, and garage sales)
Are a wholesaler (selling to other retailers) or a retailer (selling to consumers)
To apply for a seller’s permit, you will be asked to provide:
- Your Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) (corporate officers excluded)
- A form of identification, either driver license number, state ID number, or other ID (e.g., passport, military ID, San Francisco ID) to ensure the accuracy of the information provided, and to protect against fraudulent use of your identification numbers
- Incorporation date, corporate number, and Federal Employer Identification Number (FEIN) number (corporations and LLCs only)
- The name and location of a bank where you have an account and account number
- Names of suppliers
- Name of person maintaining your account
- Names and addresses of personal references
- Anticipated average monthly sales and the amount of those sales, which are not taxable
Additional information may be required: If you have a business partner, or if the business is managed by corporate officers or limited liability company managers, members or officers, those persons will also be asked to provide some of the information listed above. CDTFA offers free tax education resources – check their website under the “Tax Resources” section for classes, workshops and more.
It is a misdemeanor to engage in business as a seller without a seller’s permit. If the CDTFA discovers you are operating without a permit, you will pay penalties and any back taxes owed.
State Use Tax
You generally owe California Use Tax when you use, consume, give away or store tangible personal property in California that you purchased from an out-of-state vendor (i.e. products you can see, weigh, feel or touch, such as clothing, books, computers, DVDs or CDs). If the out-of-state vendor does not collect the California tax on your purchase, you must pay the tax to the CDTFA. If you are required to hold a seller’s permit, you must report any use tax on your regular sales tax return. If you are not required to hold a seller’s permit, you may report the use tax on your California income tax return or on a use tax return.
For more information on the State Use Tax:
- Visit: www.cdtfa.ca.gov
- Call CDTFA 800-400-7115 or the CDTFA’s San Francisco office at 415-356-6600
- Email: SanFranciscoInquiries@cdtfa.ca.gov
You should also check with the CDTFA for other tax programs they may administer, as well as with other state, federal, and local taxing and licensing agencies to inquire if they have additional registration requirements. For example, you may have to pay Excise Tax if you produce or sell certain products, such as, chemicals, alcoholic beverages, tobacco, or guns. See also California’s Tax Information Center at www.taxes.ca.gov. (Note: Be sure to discuss the Use Tax and any other tax issues with your professional tax advisor)
For additional information and to file:
California Department of Tax and Fee Administration
P: 415-356-6600 or 800-400-7115
Every type of business operating in the United States is subject to business income tax. The types of federal taxes you pay depend on your business structure, the kinds of products or services you offer, and whether or not you have employees. Check with the Internal Revenue Service (IRS) to determine the appropriate tax forms for your business and filing instructions.
Sole proprietorship: Pays taxes on business income on the individual’s personal tax return.
Partnership: Must file an annual information return to report the income, deductions, gains, losses, etc., from its operations, but it does not pay income tax. Instead, it “passes through” any profits or losses to its partners. Each partner includes his or her share of the partnership’s income or loss on his or her tax return. Partners are not employees and should not be issued a Form W-2.
Limited Liability Company (LLC): LLCs are not recognized as a classification for federal tax purposes by the federal government. It is a pass-through entity and must file as a corporation, partnership or sole proprietorship.
Corporation: Profit is taxed to the corporation when earned, and then is taxed to the shareholders when distributed as dividends. This creates a double tax. The corporation does not get a tax deduction when it distributes dividends to shareholders. Shareholders cannot deduct any loss of the corporation.
Every corporation that incorporates or qualifies to do business in California on or after January 1, 2000 is exempt from the:
- Prepaid minimum franchise tax which would be paid to the Secretary of State, and
- Minimum franchise tax for its first return
This exemption from the minimum franchise tax is not applicable to any corporation that reorganizes solely for the purpose of avoiding payment of its minimum franchise tax. Additionally, this exemption applies only to corporations, and not any other form of business.
S corporations are corporations that elect to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes. Shareholders of S corporations report the flow-through of income and losses on their personal tax returns and are assessed tax at their individual income tax rates. This allows S corporations to avoid double taxation on the corporate income. S corporations are responsible for tax on certain built-in gains and passive income at the entity level.
Several publications on specific IRS tax topics for businesses and corporations can be found on the Internet at:
When an employer registers with the IRS for an Employer Identification Number (EIN), this informs the federal government that the business may have employees. According to the IRS, an employee is defined as “anyone who performs services that can be controlled by an employer.” It is important to properly classify people who work for you as employees or independent contractors. For more information see: IRS Publication 15-A, Employers Supplemental Tax Guide at www.irs.gov/publications/p15a.
Federal law requires an employer to withhold, report, and pay over to the federal government certain deductions from their employees’ wages, including federal income tax, unemployment tax, social security tax, and Medicare.
The filing schedule varies, depending on the composition of the business and the amount of tax liability. If you are self-employed, certain tax obligations are made through the Self-Employment Tax. For more information visit the IRS website at www.irs.gov.
The following is a list of federal taxes that the employer must withhold:
Federal Income Tax (employer withholds; employee pays)
Although payment of federal income tax is the responsibility of the employee, the employer withholds the tax and submits it to the IRS on behalf of the employee. Federal income tax is based on “adjusted gross income” – the income amount remaining after various deductions are taken, determined
according to individual circumstances. Federal income taxes are assessed at graduated rates on the “adjusted gross income.” Tax liabilities are published on IRS tax tables available online.
Federal Unemployment Tax Act (employer pays)
The Federal Unemployment Tax Act (FUTA), along with the state unemployment systems, provides for payments of unemployment compensation to workers who have lost their jobs. Only the employer pays FUTA tax; it is not deducted from the employee’s wages.
Federal Insurance Contributions Act (employer withholds and employer matches)
The Federal Insurance Contributions Act (FICA) consists of both Social Security (retirement) payroll tax and Medicare (hospital insurance) tax. Employers withhold the Social Security and Medicare taxes for the employee; employers also make matching tax payments of the same amounts to the IRS. Social Security tax applies to wages up to a maximum wage base; Medicare tax applies to all wages with no maximum wage base.
Federal tax rates and taxable wage limits are subject to change each year. For current rates or other information about withholding federal income tax or paying payroll taxes, visit the IRS website.
IRS Workshops: www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Small-Business-Tax-Workshops-and-Webinars
IRS Publications: www.irs.gov/forms-instructions
For more information:
IRS (San Francisco Office)
450 Golden Gate Avenue, San Francisco, CA 94102
Employment and Labor Law
Businesses with employees are subject to a whole new area of compliance known as employment and labor law.
Employment and labor laws cover everything from preventing discrimination and harassment in the workplace, workplace poster requirements, employee benefits, wage and hour laws, and workplace safety, and more. If you will hire employees you need to know your requirements as an employer under these laws to ensure compliance. It is your responsibility to research all the applicable employment and labor laws and ensure you comply. We strongly recommend that you consult with an attorney specializing in employment law or a human resource professional before hiring employees.
Below is a guide for new employers of some of the federal, state, and local agencies that oversee employment and labor laws. It is critical that you correctly classify individuals providing services for you. Generally, they are either classified as employee or independent contractor. How you classify someone is not a matter of choice, but rather is dependent on the working and behavioral relationship between you and the person(s) doing work for you. For more information on employee vs. independent contractor visit the IRS website at www.irs.gov.
Office of Labor Standards Enforcement (OLSE)
The Office of Labor Standards Enforcement (OLSE) enforces labor laws adopted by San Francisco voters and the San Francisco Board of Supervisors. OLSE enforces labor laws of general application, including the San Francisco Minimum Wage Ordinance, Paid Sick Leave Ordinance, Health Care Security Ordinance, Family Friendly Workplace Ordinance, Fair Chance Ordinance, Paid Parental Leave Ordinance, Formula Retail Employee Rights Ordinances, and more. The Minimum Wage and Paid Sick Leave Ordinances apply to almost all employers, while the others generally apply to employers with 20 or more employees.
All employees who work in San Francisco more than two hours per week, including part-time and temporary workers, are entitled to the San Francisco minimum wage. All employers must post an OLSE provided notice, translated into six languages, informing employees of their rights. Employers must document all hours worked by employees and keep records for a minimum of four years. It is unlawful to discriminate in any manner or take adverse action against any person in retaliation for exercising rights protected under this law. The current minimum wage rate is available at sfgov.org/olse/mwo.
Paid Sick Leave
All employees who work in San Francisco are entitled to paid time off from work when they are sick or need medical care, and to care for their family members or designated person when those persons are sick or need medical care. For every 30 hours worked, an employee accrues one hour of paid sick leave, and may have up to 40* or 72 hours of paid sick leave saved at any time (*40 hours for employers with fewer than 10 employees, 72 hours for employers with 10 or more employees). If employees don’t use the sick time they’ve earned, the saved sick time carries over from year to year. Employers may require a doctor’s note or other verification after an employee’s use of paid sick leave for more than three consecutive work days. All employers must post an OLSE provided notice, translated into six languages informing employees of their rights. Employers must document hours worked and paid sick leave taken by employees and keep those records for a minimum of four years. It is unlawful to discriminate in any manner or take adverse action against any person in retaliation for exercising rights protected under this law. Employers are responsible for allowing employees without a spouse or registered domestic partner to select a designated person. For employees working for an employer on or before February 5, 2007, paid sick leave began to accrue on that date. For employees hired by an employer after February 5, 2007, paid sick leave begins to accrue 90 calendar days after the employee’s first day of work. For more information, visit: sfgov.org/olse/paid-sick-leave-ordinance-pslo.
Health Care Security Ordinance
The Health Care Security Ordinance (HCSO) requires employers with 20 or more employees and non-profit employers with 50 or more employees to spend a minimum amount of money (set by law) on health care for their employees. With some exceptions, employees who have been employed for at least 90 calendar days and perform at least 8 hours of work in San Francisco per week are covered employees under this law. Employers can choose how to make the health care expenditures (e.g. purchase health insurance, participate in the City Option, or set up health spending accounts). As of January 1, 2017, employers may no longer make revocable Health Care Expenditures to comply with the spending requirement of the HCSO. The minimum Employer Spending Requirement is calculated by multiplying the number of hours paid to each covered employee during the quarter by the applicable Health Care Expenditure Rate. Your minimum spending requirement on employee health care must be fulfilled within 30 days after the end of each quarter. As an employer, you must track and report annually on your health care expenditures, and keep all relevant records for a minimum of four years. It is unlawful to discriminate in any manner or take adverse action against any person in retaliation for exercising rights protected under this law. For more information, visit: sfgov.org/olse/health-care-security-ordinance-hcso.
Family Friendly Workplace
The Family Friendly Workplace Ordinance (FFWO) applies to employers with 20 or more employees and gives certain employees the right to request flexible or predictable work arrangements to assist with caregiving responsibilities. Within 21 days of an employee’s request for a flexible or predictable working arrangement described above, an employer must meet with the employee regarding the request. The employer must respond to an employee’s request within 21 days of that meeting. An employer who denies a request must explain the denial in a written response that sets out a bona fide business reason for the denial and provides the employee with notice of the right to request reconsideration. For more information, visit: sfgov.org/olse/family-friendly-workplace-ordinance-ffwo.
Fair Chance Ordinance
The Fair Chance Ordinance (FCO) requires employers to follow strict rules regarding applicants’ and employees’ arrest and conviction record(s) and related information. Employers with 5 or more employees (total worldwide) are covered by the FCO. The FCO prohibits covered employers from asking about arrest or conviction records until after a conditional offer of employment. Please note: Where federal or state law imposes a criminal history requirement that conflicts with a requirement of the Fair Chance Ordinance, the federal or state law will apply. For more information, visit: sfgov.org/olse/fair-chance-ordinance-fco.
Formula Retail Employee Rights
Formula Retail (also known as “chain stores”) with at least 40 stores worldwide and 20 or more employees in San Francisco are subject to the Formula Retail Employee Rights Ordinances, which regulate hours, retention, scheduling and treatment of part-time employees. If you think you may be covered by this law, please find more information at: sfgov.org/olse/formula-retail-employee-rights-ordinances.
Paid Parental Leave
The Paid Parental Leave Ordinance requires San Francisco employers with 20 or more employees to provide up to 8 weeks of supplemental compensation to employees that meet certain requirements. During the leave period, employers are required to provide supplemental compensation in an amount such that the California Paid Family Leave wage replacement plus the supplemental compensation equals 100% of the employee’s gross weekly wage, subject to a cap. For more information, visit: sfgov.org/olse/paid-parental-leave-ordinance.
For more information on all OLSE employer mandates:
Office of Labor Standards Enforcement
City Hall, Room 430
1 Dr. Carlton B. Goodlett Place, San Francisco, CA 94102
San Francisco employers are required to offer a commuter benefits program to encourage employees to use public transit or vanpools. All employers in San Francisco that have 20 or more employees nationwide and a San Francisco location must offer one of the following transportation benefits:
Pre-Tax Benefit – A monthly pre-tax deduction, up to $280/month, to pay for transit or vanpool expenses
Employer-Paid Benefit – A monthly subsidy for transit or vanpool expenses equivalent to the price of the San Francisco Muni "A" Pass (including BART travel).
Employer-Provided Transportation – A company-funded bus or van service to and from the workplace
Any combination of the above
Non-compliance may result in fines: $100 for a first violation, $200 for a second violation within the same year, $500 for each additional violation within the same year.
For more information on Commuter Benefits Ordinance contact:
Department of Industrial Relations (DIR)
The Department of Industrial Relations (DIR) was established to improve working conditions for California’s wage earners and to advance opportunities for profitable employment in California. DIR requires employers to post information related to wages, hours and working conditions in an area frequented by employees where it may be easily read during the workday. The following are important DIR divisions you should know about.
Division of Labor Standards Enforcement (DLSE) (also known as: Labor Commissioner’s Office)
The mission of the Division of Labor Standards Enforcement (DLSE) is to ensure a just day’s pay in every workplace in the State and to promote economic justice through robust enforcement of labor laws. By combating wage theft, protecting workers from retaliation and educating the public, DLSE puts earned wages into workers’ pockets and help level the playing field for law-abiding employers. To contact DLSE call 415-703-5300, email DLSE2@dir.ca.gov or visit www.dir.ca.gov/dlse.
Division of Occupational Safety and Health (also known as: Cal/OSHA)
The Division of Occupational Safety and Health (Cal/OSHA) protects and improves the health and safety of workers in California and the safety of passengers riding on elevators, amusement rides, and tramways by setting and enforcing standards, and providing outreach, education, and assistance, including consultative assistance to employers. For a consultation call 800-963-9424 or email InfoCons@dir.ca.gov.
Division of Workers’ Compensation (DWC)
California employers are required by law to have workers’ compensation insurance, even if they have only one employee, and pay workers’ compensation benefits if an employee gets sick or is hurt because of work. The Division of Workers’ Compensation (DWC) monitors the administration of workers’ compensation claims, and provides administrative and judicial services to assist in resolving disputes that arise in connection with claims for workers’ compensation benefits. To contact DWC call 415-703-5020 or for recorded message call 800-736-7401, or visit www.dir.ca.gov/dwc. Workers’ compensation insurance can be purchased from the State Compensation Insurance Fund or a private insurance broker. For more information visit the State Fund at www.statefund.ca.com.
For more information and for workplace posters contact:
Department of Industrial Relations
455 Golden Gate Avenue, San Francisco, CA 94102
P: 888-ASK-WAGE (888-275-9243) (Minimum Wage Hotline)
Department of Labor (DOL)
The U.S. Department of Labor (DOL) oversees federal employment and labor laws. The DOL developed a set of interactive, online tools called elaws (Employment Laws Assistance for Workers and Small Businesses) to help employers and employees learn more about their rights and responsibilities
under numerous federal employment laws. The elaws Advisors address some of the nation’s most widely applicable employment laws, offering easy-to-understand information on topics such as pay and benefits, safety and health, posters and recordkeeping, youth employment, and more. To find out which federal employment laws apply to your business, visit www.dol.gov/elaws. The FirstStep Employment Law Advisor can help you determine which laws apply to you and how to comply.
U.S. Department of Labor (DOL)
P: 866-4-USA-DOL (866-487-2365)
W: www.dol.gov and www.dol.gov/elaws
Affordable Care Act
Under the Affordable Care Act, the federal government, state governments, insurers, employers, and individuals are given shared responsibility to reform and improve the availability, quality, and affordability of health insurance coverage in the United States. The employer mandate is officially part of the Employer Shared Responsibility Provision, and is a requirement that all businesses with 50 or more full-time equivalent employees (FTE) offer health insurance to at least 95% of their full-time employees and dependent children up to age 26, or pay a penalty. Small businesses with 50-100 FTE must offer affordable and minimum essential health insurance to full-time workers. The mandate does not apply to employers with 49 or less FTEs.Back to top
Once you have a clear understanding of the amount of money or capital you will need to start and run your business, you will need to consider funding options.
You may choose to obtain initial financing from your own savings, or from friends and family. Starting a business can be a tremendous strain on your personal finances as it may take time before your new venture turns a profit. Here are several options to financing your business.
Debt financing means borrowing money that requires repaying the loaned amount over a period of time, usually with interest. Debt financing can be either short-term, with full repayment in less than one year, or long-term, with repayment greater than one year. There are several options to borrowing money, including borrowing from traditional lenders such as banks, or you may have to borrow from non-traditional lenders. Below is more info on both traditional and non-traditional lenders.
Bank loans are one of the most traditional and conservative ways to finance a business. Traditional financing is also one of the most difficult to qualify for. When banks lend to new businesses, they usually only offer short-term loans, seasonal lines of credit, and single-purpose loans for machinery and equipment. Otherwise, as a new business you may not qualify for a bank loan. You should consult with a business banker at your current bank about your ability to access a business loan. Here are a few things banks may consider:
Ability to Repay
One of the most important parts of your business plan is financial projections. Lenders want to see what you expect your business to make and the ability to repay your loan.
If your business has not established business credit history, lenders will look at your personal credit history. Your credit report determines how lenders will perceive you and shows consistent records of paying off your debts.
Equity can be built up through retained earnings or money contributed from the owner or investors. Most banks want to see sufficient equity in the company to leverage the loan.
Collateral is personal and business assets that can be sold in case the cash generated by the small business is not sufficient to repay the loan. Most loan programs require some collateral. If you have no collateral, you may need a co-signer who has collateral to pledge.
Managerial expertise is a critical element in the success of any business. Lenders often look closely at your education and experience, as well as that of your key managers.
If you are unable to secure a bank loan, you may be eligible for loans from non-traditional lenders, also known as alternative lenders and micro lenders, or nonprofit and community lenders. Alternative lenders lend to businesses that have limited or no access to a bank loan. They are typically nonprofit organizations targeting underserved communities to promote economic development.
Alternative lenders and micro lenders exist to fill the gap that exists between bank requirements and many profitable businesses. Loans from non-traditional alternative lenders have fewer restrictions than loans from traditional lenders. The loans are usually smaller or have fixed interest rates so that borrowers are less likely to default (fail to repay their loan). In addition to capital, many provide services like training and technical assistance before, during and after the loan. The following is a list of some alternative lenders:
Working Solutions is a certified, nonprofit Community Development Financial Institution (CDFI) that provides diverse entrepreneurs with affordable capital, customized business consulting, and community connections. Working Solutions offers loans ranging from $5,000 to $100,000.
930 Montgomery Street, Suite 400, San Francisco, CA 94133
Main Street Launch
Main Street Launch is a nonprofit lender offering commercial loans up to $250,000 for start-up and existing businesses in the San Francisco Bay Area, with an emphasis on San Francisco, Oakland, and veteran-owned businesses statewide. All products are fully-amortized term loans at fixed competitive interest rates offered to entrepreneurs unable to obtain conventional financing.
2101 Webster Street Suite 1200, Oakland, CA 94612 (by appointment only)
Additional Non-Traditional/Micro Lenders
For additional information about non-traditional alternative micro lenders and available programs, contact the Office of Small Business at (415) 554-6134 or email email@example.com.
Government Loan Programs
Local and federal government loans may also be available to help you meet your financing needs. If you are unable to secure conventional financing, you should also consider the following local and federal loan programs, which offer low interest loans and federally guaranteed loans.
Contact the Office of Small Business for information about current loan programs available in San Francisco: 415-554-6134 or firstname.lastname@example.org.
U.S. Small Business Administration (SBA) Loan Programs
The Small Business Administration (SBA) offers a variety of loan programs to small businesses with specific purposes. Below are a few of them:
General Small Business Loans – 7(a) Loans
The 7(a) Loan Program is SBA’s most common loan program which includes financial help for businesses with special requirements. 7(a) loans have a maximum amount of $5 million. Loans are administered by SBA lenders.
SBA’s Microloan Program provides small, short-term loans up to $50,000 to small businesses for working capital or the purchase of inventory, supplies, furniture, fixtures, machinery and/or equipment. These loans are administered through nonprofit organizations on behalf of the SBA.
Real Estate and Equipment Loans – CDC/504 Loans
The CDC/504 Loan Program provides long-term, fixed-rate financing for major fixed assets such as land and buildings. The SBA’s 504 loans are administered by Certified Development Companies (CDCs), which are SBA's community-based partners who regulate nonprofits and promote economic development within their communities. CDCs are certified and regulated by the SBA.
SBA provides low-interest disaster loans to all businesses, private non-profit organizations, homeowners, and renters. SBA disaster loans can be used to repair or replace real estate, personal property, machinery and equipment, and inventory and business assets.
For more information on SBA Loan Programs, including a list of SBA lenders, visit www.sba.gov.
Starting a new business requires a lot of preparation. Entrepreneurs may not have the resources to raise capital in order to launch their new venture. A common dilemma they face is how to raise funding for their startup. Here are a few options available for raising money.
Crowdfunding is a method of funding a project or business by raising small amounts of money from a large number of people. Each crowdfunding campaign sets a goal amount of money and a fixed amount of time in which to raise it. By sharing your campaign, you not only raise money, you also create awareness of your new business or product. There are dozens of websites that allow you to create and share a crowdfunding campaign – a quick internet search will lead you to them. Pay close attention to fees and campaign rules to make sure you maximize your fundraising.
Investors for your business may be people you know such as friends and family. When they invest in your business, it’s important to have agreements in writings on the terms of the investment. This helps you and your investor(s) decide how the money can be repaid and more importantly, whether the money you received needs to be taxed. For additional information on finding and attracting investors, visit the SBA’s Learning Center at learn.sba.gov/learning-center-grow/learning-center-finding-and-attracting-investors.Back to top
Government Contracting and Certification
Federal, state and local governments are the world’s largest customer and offer businesses the opportunity to sell billions of dollars’ worth of products and services.
Government contracts represent a tremendous sales and revenue opportunity for small businesses since most government agencies require that some percentage of the contracts be set aside for small businesses. Some of the advantages for contracting with government agencies are steady cash flow during the contract period, reduced risks of bad debts, and marketing. In order to take advantage of these opportunities, businesses need to register or qualify to do business with the government. The following is a brief overview of the process for getting registered or certified at each level of government.
Contracting with the City and County of San Francisco
Office of Contract Administration (OCA)
The Office of Contract Administration (OCA) supports the procurement of goods and services in order to provide the citizens of San Francisco with essential government services. The City and County of San Francisco The City operates an international airport and seaport, a public transportation system, a regional water system, and a major hospital. In addition to one-time purchases, the City meets its reoccurring business needs (e.g., office supplies, fuel, information technology, janitorial services, and security services) with term contracts.
The first step to begin working with the City and County of San Francisco is to complete a short registration process to become a Registered Bidder. This will allow you to apply for and potentially receive contracts with the City and County of San Francisco. For more information on how to become a Registered Bidder / City Supplier, visit sf.gov/step-by-step/become-city-supplier.
The City’s Bids and Contracts Database, which is the central repository of the City’s Current Business Opportunities. To find out about current opportunities visit: sfcitypartner.sfgov.org.
For additional information, contact:
Office of Contract Administration/Purchasing
City Hall, Room 430
1 Dr. Carlton B. Goodlett Place, San Francisco, CA 94102
SF City Partner (Supplier Portal)
Local Business Enterprise Certification (LBE)
The Contact Monitoring Division (CMD) certifies firms that meet the requirements of San Francisco Administrative Code Chapter 14B as a Local Business Enterprise (LBE). LBE certified firms can compete more effectively on City and County of San Francisco contracts due to a set-aside requirement on most City contracts. Certified firms receive bid discounts or rating bonus points when bidding as the Prime Contractor. There are also certain contracts that are set aside for bidding by micro certified firms only.
The following programs are designed to provide local, certified firms with business development and other contracting opportunities:
Weekly Workshop Series Each Wednesday of the month
Learn everything you need to know about contracting with the City and County of San Francisco through CMD’s free workshop series. CMD offers three workshops designed to teach businesses everything they need to know about doing business with the City and County of San Francisco, including:
Certifying your LBE Business: Learn What It Takes
Bidding on City Contracts: The Nuts & Bolts
Learn about Updates to the San Francisco LBE Program
For more information about these workshops, visit: sfgov.org/cmd/upcoming-events
CMD’s Mentor-Protégé Program is designed to encourage and motivate Prime Contractors to assist CMD certified Micro-Local Business Enterprise (LBE) firms and enhance their capability of performing successfully on City and County of San Francisco contracts and subcontracts. The goal is to increase the overall number of LBEs receiving City and County contract awards, resulting from mentorship and refined business practices.
The Mentor-Protégé Program provides a platform for successful prime companies to assist CMD Micro-LBE Certified firms in any of the following areas, including but not limited to:
Leadership Development Needs
Financial/Business Infrastructure Needs
Networking/Business Community Engagement Needs
City and County of San Francisco Surety Bond and Finance Program
The Surety Bond and Financing Assistance Program is designed to help certified Small or Micro LBE contractors who are participating in City and County of San Francisco construction projects obtain and increase their bonding and financing capacity. The Surety Bond and Finance Program facilitates this objective by providing contractors with the tools needed to become competitive in public works construction. Recognizing that bonding and working capital are the common barriers contractors face when bidding and completing contracts, the program addresses these challenges.
Program Services Include:
Bonding and Financial Consultation and Technical Assistance
Bid, Performance and Payment Bond Guarantees
Contract Financing Guarantees
Individual Counseling and Group Workshops on Contractor Related Topics
Accounting Assistance and Referrals
Third-Party Funds Administration
For additional information:
San Francisco Contract Monitoring Division
1155 Market Street, 4th Floor, San Francisco, CA 94103
Contracting with the State of California
The State of California purchases a wide variety of goods and services totaling billions of dollars annually. The Department of General Services, Procurement Division (DGS PD) is the central purchasing authority for all state departments, agencies, institutions, community colleges, technical institutes and city or local boards of education. Visit Cal eProcure at caleprocure.ca.gov for information on how to find bid opportunities, access training and resources, and apply to be a certified Small Business (SB) or Disabled Veteran Business Enterprise (DVBE).
For more information contact:
Department of General Services, Procurement Division
707 Third Street, 2nd Floor, West Sacramento, CA 95605
P: 800-559-5529 / 916-375-4400
Department of General Services
707 3rd Street, 1st Floor, Room 1430, West Sacramento, CA 95605
P: (916) 375-4940
Contracting with the Federal Government
The U.S. government is one of the world’s largest buyers of products and services. The U.S. General Services Administration (GSA) is the Federal government’s central management agency that sets policy for federal procurement which promotes management best practices and efficient government operations. Contracting with the federal government can help your business grow if your business offers what GSA buys, meets vendor requirement and qualifications, and is registered to do business with the federal government. Follow these initial steps for working with GSA:
Obtain a Data Universal Numbering System (D-U-N-S) Number. The DUNS Number is assigned by Dun & Bradstreet, Inc. (D&B) to identify unique business entities and will need to be submitted through various requests. Go to www.dnb.com/duns-number/get-a-duns.html or call 844-536-8311.
The North American Industry Classification System (NAICS) is the standard used by Federal statistical agencies in classifying business establishments for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. business economy. Identify the NAICS code for your business at www.census.gov/naics. Make sure to keep a record of your NAICS code which will be used to communicate your industry and find opportunities through various resources.
Verify Your Small Business Status
Go to the Small Business Administration website at www.sba.gov/federal-contracting/contracting-guide/size-standards and verify that the size of your business qualifies your company as a Small Business. While there, you should consider beginning the certification process if you wish to be eligible for opportunities for one or more of the following socioeconomic groups:
8(a) Small Business
Historically Underutilized Business Zones (HUBZone) Small Business
Service-Disabled Veteran-Owned Small Business (SDVOSB)
Woman-Owned Small Business (WOSB)
Once you have received your DUNS number, you can register with the System for Award Management (SAM) at sam.gov. SAM is the primary registrant database for the U.S. federal government. Your business must be registered in SAM prior to the award of a contract, basic agreement, basic ordering agreement, or blanket purchase agreement. Both the NAICS and DUNS may be requested during your registration process.
Past Performance Evaluations
Businesses will need to provide past performance evaluations through either the federal Contractor Performance Assessment Reporting System (CPARS) or a past performance narrative which includes three to five relevant customer references for work completed within three years of the date the offer is submitted.
Small businesses exploring the federal marketplace need to consider the different contracting options available and decide which suits them best.
Working with a prime contractor is the fastest way to begin. Subcontracting is the most popular partnering tool. It is an excellent way to test the waters of federal business without suffering undue risk.
Many businesses, small and large, will want to sell under the terms of a Schedules contract. Schedules (also called Multiple Award Schedules (“MAS”) or Federal Supply Schedules) are the most widely used federal procurement program.
Government-Wide Acquisition Contracts (GWAC)
Government-Wide Acquisition Contracts (GWAC) provide information technology (IT) solutions such as systems design, software engineering, information assurance, and enterprise architecture solutions. A GWAC contract requires a vendor to be registered in the System for Acquisition Management (SAM) but does not have a “years in business” experience minimum or an annual revenue minimum to bid for the contract. Once you’ve registered your small business in SAM, you can begin to seek opportunities, market to the federal government and compete for business.
U.S General Services Administration (GSA) offers the largest government wide long-term contracts. Find out about working with other GSA contractors and subcontractors. GSA allows other government agencies to purchase directly from GSA Schedule Contractors through the GSA Advantage website at www.gsaadvantage.gov.
The GSA’s Office of Small and Disadvantaged Business Utilization provides listings, applications and general information on bidding for federal contracts. The Pacific Rim Region’s Office of Small Business Utilization (SBU) promotes increased access to GSA’s nationwide procurement opportunities. The SBU is GSA’s advocate for small, minority, veteran, HUB Zone, and women owned businesses. Regular events and outreach activities connect small businesses with key contracting experts. Federal procurement process counseling is also provided.
General Services Administration (GSA)
Office of Small Business Utilization Pacific Rim Region
U.S. Small Business Administration
Government Contracting Minority Business Development San Francisco SBA Office
455 Market Street, Suite 600, San Francisco, CA 94105
The Small Business Transportation Resource Center is a U.S. Department of Transportation Office of Small and Disadvantaged Business Utilization grantee that helps businesses become certified, obtain and win bids for transportation- related projects. Being certified with other agencies increases your chances to access more contracts.
Small Business Transportation Resource Center (Southwest Region)
1610 R Street, Suite 330, Sacramento, CA 95811