How to Start a Business in San Diego
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Starting a business in San Diego may seem daunting, especially since California doesn’t exactly have a reputation for being business-friendly. However, starting a business in San Diego is actually pretty straightforward, at least compared to some of California’s other metropolises.
This guide to starting a business in San Diego assumes that you’ve already fulfilled your requirements on the federal and state level and now you’re ready to tackle local registration requirements. To start your San Diego business, you’ll need to:
- Apply for a San Diego Business Tax Certificate
- Register Any FBNs with San Diego County
- Publish Any FBNs in San Diego County
- Obtain Any Special Business Permits
The City of San Diego doesn’t require a general business license to do business in San Diego. Instead, you’ll need to register for a San Diego Business Tax Certificate. This is how your business will pay the San Diego business tax.
Who needs a San Diego Business Tax Certificate?
All businesses within San Diego city limits need to register for a Business Tax Certificate and pay the business tax, no matter how big or small. That means sole proprietors, general partnerships, LLCs, and corporations need to register. Nonprofits are exempt from paying the business tax, but they still need to register in San Diego.
What about businesses in San Diego County?
If your business is in San Diego County but outside of the City of San Diego, you should check your local municipalities for business license requirements. Many cities, like La Mesa, Lemon Grove, and Poway, require local business licenses.
Is your business in an unincorporated area of San Diego County, like Fallbrook or Julian? You don’t need a business license.
How do I get a Business Tax Certificate in San Diego?
You’ll have to fill out a San Diego Business Tax Application. You can submit the form online, by mail, or in person at the Civic Center Plaza downtown. Once you receive your Business Tax Certificate (it will take about two weeks) you’ll need to display it prominently wherever you conduct business.
Note: you need a separate Business Tax Certificate for each business location.
What info does the Business Tax Application require?
To fill out the San Diego Business Tax Application, you’ll need to provide:
• Your entity type (LLC, corporation, sole proprietorship, etc)
• Your business name
• Your business address and contact information
Note: When you list a business address on this application, you’re self-certifying that your business activity is allowed in this area. You can check that your business activity is allowed via San Diego’s Zoning Portal.
• Your business start date
• The number of people your business will employ in San Diego
• Descriptions of your primary and secondary business activities
• The names, addresses, phone numbers, emails, SSNs, and professional license numbers (if applicable) of each of your owners.
The application also provides a list of business activities that require police permits and inspections by the fire department. You’ll need to check any boxes that apply to your business or check the box saying that none of these descriptions apply to your business.
The application must be signed by someone authorized to do business on behalf of your company.
How much is the San Diego business tax?
Unlike some cities, San Diego charges a flat rate tax fee rather than a percentage. Your fee will be based on whether your business is “small” or “large.” Your category is determined by how many employees you have.
If you have fewer than thirteen employees, you’ll pay a flat fee of $34 per year.
If you have more than twelve, you’ll owe $125 plus $5 per each employee.
You’ll also have to pay the $4 fee mandated by SB-1186.
What if I forget to pay the San Diego business tax?
If you fail to pay your San Diego business tax within 15 days of beginning business, you’ll be charged a late fee of whichever sum is greater: $25 or 10% of your bill.
If you’re caught conducting business in San Diego without a Business Tax Certificate, you’ll be charged a penalty of $68 (for small businesses) or $250 (for large businesses).
Who is exempt from paying the San Diego Business Tax?
Certain businesses are exempt from the San Diego Business Tax. The list includes bail bond agents, nonprofits, and businesses owned by blind people. Most of the exempt businesses are still required to submit the application along with some proof documenting their exempt status.
You can see a full list of exempt businesses in San Diego here.
A Fictitious Business Name is any business name that is not:
• the owner’s full name
OR
• the name listed on the business’s formation documents.
Usually, Fictitious Business Names are used by sole proprietorships or general partnerships, but sometimes an LLC or corporation will use a Fictitious Business Name to introduce a niche product or target a very specific audience.
Who needs to register an FBN in San Diego County?
The following business types need to register a Fictitious Business Name with San Diego County:
• A sole proprietorship or general partnership with a business name that excludes the last names of all owners
Examples:
The sole proprietorship “Joe’s Carpentry” needs to register an FBN because the business name does not include a owner’s last name. Using the name “Joe Gonzales Carpentry” does not require registering an FBN.
A general partnership called “Lulu Isaac and Associates” would need to register an FBN because the name does not name the other owners. “Isaac, Brown, and Jones Consulting” 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.
Examples:
“Jose’s Fresh Tamales LLC” is registered with the CA Secretary of State and sells tamales from a food truck in El Cajon. However, the the owners want to sell their tamales at a markup to boutique markets in La Jolla. To reach the health-conscious crowd, the owners want to use the name “Jose’s All Natural Tamales LLC.” Because this name is different than the business name on file with the CA SOS, the owners will need to register an FBN in San Diego County.
The foreign LLC “Patty Jean’s Swim School LLC” was formed in Arizona, but the owner wants to expand into La Mesa, where her employee has a pool she can teach from. She attempts to register her LLC in California, but to her surprise, her business name is already being used by another company. What are the odds? So when she applies for a Certificate of Authority to do business in California, she lists an alternate business name: “Patty’s Private Swim Lessons LLC.” Does Patty need to register an FBN in San Diego County? No. Listing an alternate name when applying for a Certificate of Authority will suffice.
How do I register an FBN in San Diego County?
First, make sure your desired FBN isn’t already taken. You can conduct a quick business name search in San Diego County here.
Once you confirm that your desired name is available, you’ll need to fill out the San Diego County Fictitious Business Name Statement. You can only submit this form by mail or in person.
What information is needed for the San Diego FBN Statement? <h3>
The San Diego County Fictitious Business Name Statement requires you to list the following:
• Your Fictitious Business Name
• A physical business address
• The name and address of the registrant
• The entity conducting business in San Diego County (individual, corporation, LLC, etc)
• The day you started business (no future dates allowed)
• The registrant’s signature
You’ll also need to include an Affidavit of Identity. If you file by mail, you’ll either have to have the Affidavit of Identity notarized OR include a copy of your government-issued ID.
If you file in person, you can present your identification at the time of filing. The San Diego County Clerk’s Office recommends filing in person and has locations in San Marcos, Santee, Kearny Mesa, and Chula Vista. The main office is Downtown near Little Italy.
How much does it cost to register an FBN?
It’ll cost you $42 to register your first FBN and owner. After that, it will cost $5 for each additional business name or owner.
If you had to register a Fictitious Business Name, you’re not done yet. You’ll need to publish your FBN in an adjudicated newspaper once a week for a month. Once you’ve fulfilled your publication requirement, you’ll file Proof of Publication with the San Diego County Clerk. Some newspapers will file the Proof of Publication for you if you hire them, so make sure to ask.
How much does it cost to publish an FBN in San Diego?
It depends on where you choose to publish. Papers set their own prices for publishing FBN Statements. Because this is a legal notice and not an advertisement, there’s no real benefit to publishing your FBN in a more expensive or well-known paper. We recommend calling around to the list of adjudicated papers provided by the San Diego County Clerk’s Office to find the best price. Or you can use this opportunity to support a favorite local newspaper.
When should I publish my FBN in San Diego County?
You have 30 days from the date you first filed your Fictitious Business Statement with San Diego County to publish your FBN.
Once you’ve published, you have another 30 days to file Proof of Publication with San Diego County.
If you’ve made it this far, you’re almost there. The last step is applying for any special permits or licenses your business may need to operate in the San Diego area.
There are any number of permits your business might require, depending on if you sell food or operate a pool or run your business out of your home. It would be impossible to provide a rundown of every San Diego business permit here, but here are some of the commonly used permits businesses in the area need.
Home Occupancy in San Diego
Running a business out of your home – sometimes called home occupancy – is a great way to save money, especially when you’re first starting out. Fortunately, home occupancy is allowed in almost every residential zone in San Diego. However, there are some rules you’ll need to follow:
• Your home should primarily be just that: a home. Work should be considered an “accessory use.”
• Anything you sell must be handmade, grown in your home, or prepared in a kitchen that meets Cottage Food Operation standards.
• Your home-based business shouldn’t impede off-street parking.
• No signs advertising your business.
• Unless you’re growing something and need to use an outdoor space, your business should be conducted inside. Anything you need for your business should be stored inside.
• Products or equipment needed for your business shouldn’t exceed 1,000 cubic feet.
• Your home-based business can’t be a nuisance to your neighbors, which means don’t create extra noise, traffic, lighting, odor, or anything else that might violate your neighborhood’s ordinances.
• No renting out part of your home as part of your home-based business.
• Only people who live in the home may work at the home as part of the business, except for one employee who is allowed to work at the home between 7 AM and 7 PM and not on Sundays.
• You can only have a visit from one client or customer at a time, and it must be between the hours of 7 AM and 7 PM, and not on Sundays. This rule applies to vendors, too.
• You can have one business vehicle parked on the street. The vehicle shouldn’t be able to carry more than one ton.
As you can see, there are quite a few restrictions on home-based businesses in San Diego. If you need to get around some of these restrictions to, say, host more employees at your home or park another business vehicle on the street, you can apply for a Neighborhood Use Permit (NUP). Unfortunately, obtaining a Neighborhood Use Permit in San Diego can be onerous and expensive – you’re looking at a $1,421 application fee. You’ll need to make an appointment with the City by calling (619) 446-5300.
Environmental Health Permits
If your business does anything that could affect public health, you’ll probably need a permit from the San Diego County Department of Environmental Health.
What kind of permit? It depends on your business activity. Working as an independent tattoo artist? You’ll need to submit the Body Art Registration. Have a garden where you grow herbs for your cafe’s sandwiches? You’ll need to fill out a Culinary Garden Agreement. Teaching swim lessons in a pool? You’ll need a handful of forms, including the Public Health Permit Application.
You can see a list of San Diego’s Environmental Health permits here.
We Can Help
If you made it to the bottom of this guide, congratulations. You can probably see that starting a business in San Diego requires quite a few steps. Hire us to form your California LLC or incorporate in California and you’ll significantly cut down on the amount of time spent dealing with paperwork. That means you can spend more time working on your dream and less time reading the fine print.