How to Start a Business in San Francisco
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Starting a business in San Francisco involves checking boxes at both the city and county level. This guide assumes that you’ve already registered your business with the State of California and now you’re ready to tackle your requirements with the City of San Francisco and San Francisco County. To get your business off the ground locally, you’ll need to take the following steps:
- Apply for a Business Tax Certificate
- File a Business Property Statement
- Register Any FBNs with SF County
- File Proof of Publication in SF County
- Apply for Any Special Permits
Apply for a Business Tax Certificate
It doesn’t matter if you have a sole proprietorship or you’re forming a large corporation – virtually everyone doing business in San Francisco city limits must obtain a Business Registration Certificate. Even tax-exempt nonprofits need to apply, even though they’re exempt from paying the registration fee. The only business owners who are exempt from this requirement are some landlords (those who derive income from housing co-ops, residences with fewer than four units, or a single condo) and taxi drivers.
Business Registration Certificates are issued by the City of San Francisco, Office of Treasurer & Tax Collector (TXX). Once you’re approved, TXX will also issue your business a Business Account Number – something you’ll need to apply for other permits in San Francisco. That’s why you should take care of this step first.
How do I apply for a San Francisco BRC?
You can apply for a Business Registration Certificate online through the San Francisco Business Portal. After you fill in your business information and submit your application, you’ll receive an email at the address you supply with an electronic signature application. You’ll also receive an email instructing you on how to pay your fee electronically.
What information do I need for the BRC application?
The application for a BRC in San Francisco requires both some basic information about your business and some more complicated calculations. You’ll need to be prepared to provide the following:
- If you’re registering a sole proprietorship or general partnership, use your own name(s), not a trade name or DBA (“Doing Business As”). If you’re registering a business that you’ve formed or registered with the California Secretary of State, you’ll typically use the name listed on your Articles of Incorporation or Organization (not a Fictitious Business Name).
- Business Tax ID
- Sole proprietors may use their social security number.
- Other entities should use a Federal Identification Number (also known as a FEIN or EIN).
- Organization Type
- This is where you can select the correct legal structure of your business (LLC, corporation, sole proprietorship, etc).
- Start date
- The date you started doing business in San Francisco. No future start dates allowed.
- Ownership Details
- Here, you’ll provide information for the owners of your business, including their names, addresses, phone numbers, email addresses, and tax identification numbers.
- Officer Information (for corporations)
- Contact Information
- Location Name(s) or Fictitious Business Name(s) with start dates
- Tax/Fee Types
- Here, you’ll have to select any additional San Francisco taxes your business will have to pay. For instance, if you rent out your apartment for stays that last less than 30 days on a platform like Airbnb or VRBO, you’ll have to select the Transient Occupancy Tax. If you sell soda, you’ll need to select the Sugary Drink Tax.
- If you select a tax, you’ll have to fill out an additional return.
- Not sure? You can read about the different taxes collected by TXX in San Francisco here.
- The type of business activity you’ll do
- Your estimated San Francisco Payroll Expense
- This is how much you expect to pay in the coming year in wages, salaries, bonuses, commissions and property. Read up on the TXX payroll expense guidelines here.
- Your estimated San Francisco Gross Receipts
- This is how much you plan to make in the coming year and the amount you’ll be taxed on. Your tax rate is determined by your business type.
When is the San Francisco BRC deadline?
The deadline for registering for a Business Registration Certificate in San Francisco is May 31st. Each year, you’ll have to renew your Business Registration by May 31st, too.
What is the business registration fee in San Francisco?
It depends on a few factors, like business type, estimated gross receipts, and payroll expense. The fee ranges anywhere from $4 to $40,261. Some businesses that register after the beginning of the registration year are eligible to have their registration fee prorated. Refer to the TXX Registration Fee Schedule to calculate your fee.
File a Business Property Statement
San Francisco collects a tax on business property, both owned and leased. As a small business owner in San Francisco, you’ll be responsible for declaring all of your business property (except some exempt items) every year by April 1st (although you have until May 7th to file without a late penalty). This step isn’t exactly part of starting a business in San Francisco as much as it is maintaining one, but we thought you’d like to be prepared.
What counts as business property?
According to the Overview for Filing a Business Property Statement published by the Assessor’s Office, business property is “tangible property owned, claimed, used, possessed, managed, or controlled in the conduct of a trade or business.” So what does this mean? Basically, any machinery, equipment, furniture, or appliances that you use for your business are taxable. If you own a bakery, everything from the ergonomic office chair you sit in for accounting work to the industrial mixer you use to mix bread dough is taxable. Computers, printers, phones, copiers – all of it needs to be declared in your filing.
There are a few exemptions. Those include DMV licensed vehicles, software, fire suppression systems, and solar panels.
How much is the Business Property Tax?
For 2020, Business Property Tax rate in San Francisco is 1.180%.
When is the Business Property Tax due?
You’ll get your bill from TXX in July and your payment will be due by August 31st.
How do I file the Business Property Statement?
Filing online is the easiest, fastest way to file your San Francisco Business Property Statement. A few business types are not eligible for online filing (financial companies, insurance companies, leasing companies, billboard companies and rental companies). If you don’t keep a business email address, you definitely won’t be eligible.
If you are eligible, the Assessor’s Office will send you instructions on how to file in the spring. If you can file online, your instructions will include a PIN that you’ll need to log in. This PIN will change every year.
Register Any FBNs with SF County
A Fictitious Business Name (or FBN) is any business name different from either:
• the owner’s full name
• the name listed on the business’s formation documents.
Fictitious Business Names are most commonly adopted by sole proprietorships or general partnerships, but sometimes, an LLC or corporation might use a fictitious business name to target a very specific audience.
Who needs to register an FBN in SF County?
The following business types need to register an FBN in San Francisco County:
- A sole proprietorship or general partnership with a business name that excludes the owner’s last name
- The sole proprietorship “Jeanie’s Cleaning” needs to register an FBN because the business name does not include a owner’s last name. Using the name “Jeanie Smith’s Cleaning” does not require registering an FBN.
- A general partnership called “Jace Henderson and Brothers Construction” would need to register an FBN because the name does not name the other owners. “Jace and Tanner Henderson Construction” would not need to register an FBN because the last names of all partners are listed in the name.
- An LLC, corporation, or limited partnership using a different business name than the one listed on their Articles of Incorporation or Organization or foreign registration forms.
- “Dogpatch Candles LLC” is registered with the CA Secretary of State and sells candles at the Urban Air Market in the Dogpatch neighborhood. The owners want to target boutiques in Hayes Valley under the name “Hayes Valley Scents.” Because this name is different than the business name on file with the Secretary of State, the owners will need to register an FBN in SF County.
- The foreign LLC “He and She Wedding Photography LLC” was formed in Oregon but the owners want to begin photographing weddings in San Francisco. However, another business down in SoCal is using the name “He and She Wedding Photography LLC.” When applying for a Certificate of Authority in California, He and She Wedding Photography lists an alternative business name: “Old Married Couple Wedding Photography.” The business does NOT need to register an FBN in San Francisco County. Why? Listing an alternate name on the Application to Register a Foreign LLC will suffice.
How do I register an FBN in SF County?
First, you’ll need to make sure your desired FBN isn’t taken in San Francisco County. You can confirm availability by checking for your name on the SF County Fictitious Business Search.
Once you’re sure your desired FBN is available, you can fill out the Fictitious Business Name Statement. Then you can either mail or hand-deliver the completed form to the County Clerk’s Information Counter.
How do I fill out the San Francisco FBN Statement?
To fill out the San Francisco Fictitious Business Name Statement, you’ll need to provide the San Francisco County Clerk with:
- Your fictitious business name
- Your California business address
- Hint: You can’t use a PO box here. If you hire us to form your California LLC or corporation, we’ll supply a California business address for you to use at no extra cost. You can use it on this document, too.
- The name and address of the person or entity registering the FBN
- Your entity type
- The date you started using your FBN (no future dates allowed)
- The registrant’s signature
Note: make sure to submit this form in duplicate.
How much is the FBN Statement fee in San Francisco?
The first Fictitious Business Name Statement you file will cost you $57. Any additional fictitious business names will cost $14 each to register. This amount doesn’t include the cost of publication (see the next step).
- A sole proprietorship or general partnership with a business name that excludes the owner’s last name
File Proof of Publication in SF County
If you’ve filed an FBN Statement in SF County, you’re halfway done. Next, you’ll need to publish your Fictitious Business Name in a local adjudicated newspaper. You’ll have to publish once a week for a month.
Once you’ve met this requirement, you’ll have to file Proof of Publication with the SF County Clerk. Some newspapers will file that form for you as part of their service, so make sure to ask.
How long do I have to publish an FBN in SF?
You have 30 days from the date you filed your FBN Statement in SF County.
What’s the cost to publish an FBN in San Francisco?
The cost for publishing your Fictitious Business Name in San Francisco varies, depending on where you decide to publish. Publication prices in SF County typically start around $40 and go up to a few hundred dollars. The SF County Clerk provides a list of local adjudicated newspapers that will work, but the list is not comprehensive. There’s no benefit to publishing your name in a more expensive newspaper, so call around and find the cheapest one you can.
Apply for Any Special Permits
San Francisco is a beautiful city and a lucrative place to own a business. It’s also highly regulated. Depending on what kind of business you’ll be doing – and where you’ll be doing it – you’ll probably need to apply for additional, specialized permits.
It’s virtually impossible for us to compile a list of all the possible licenses you might need – an event planning business alone needs 19 separate permits and registrations! But below, we’ve listed some common permits that San Francisco business owners ask about.
San Francisco is one of the most expensive cities in the world, so working out of your home is a great way to save money when you’re starting a business. Luckily, San Francisco doesn’t require a Home Occupancy Permit, unlike some cities. However, you’ll need to follow a few rules:
No client visits
No on-site employees who don’t also live in the house
No signs or advertising
No more than 25% of the house may be used for businesses
Cottage Food Operation (CFO) Permit
Thanks to the California Homemade Food Act, also sometimes referred to as the Cottage Food Act, some businesses are allowed to produce and sell homemade food. Only businesses that make low-risk food (think pastas, baked goods, candies, and honey) are eligible. To make and sell food out of your home, you’ll need to apply for a Cottage Food Operator permit.
If you plan on selling directly to customers, then your business is considered “Class A.” You won’t have to undergo any inspections, but you will have to take a class on how to prepare food and obtain a CFO permit. It will cost a Class A business $150 to apply for a CFO permit.
If you plan on selling to third-party establishments like markets, cafes, or bakeries, you’re considered “Class B.” The San Francisco Department of Public Health will need to inspect your kitchen before you get your permit and once a year after that. A Class B business will have to shell out $658 for a CFO permit in San Francisco.
Street Artist Certificate
Ready to sell your handmade leather bags or jewelry at an outdoor market? You’ll need to apply for a San Francisco Street Artist or Craftsperson Certificate. These are issued by the San Francisco Arts Commission and cost $20 to apply for (this fee is waived for veterans). The SF Arts Commission only processes 25 applications per month and you can’t jump to the front of the line, so you may end up waiting a few months, especially during busy seasons.
We Can Help
If you’ve made it to the end of this guide, you might be feeling a little daunted. Forming a business in California is not easy, but we can help you get a head start. Hire us to form your California LLC or incorporate in California so that you can focus on the fun stuff – getting your dream off the ground.