- 10 Steps to Starting a Business in San Jacinto or Hemet: A Complete 2025 Guide to Local Success
- Step 1: Choose a Business Structure
- Step 2: Register a Fictitious Business Name (DBA)
- Step 3: Apply for an Employer Identification Number(EIN)
- Step 5: Register for California State Taxes
- Step 4: Obtain a Business License in Hemet & San Jacinto
- Step 6: Obtain Business Permits
- Step 7: Open a Business Bank Account
- Step 8: Obtain Business Insurance
- Step 9: Join Local Business Networks
- Step 10: Educate Yourself
Decide on the type of legal structure (Sole Proprietorship, LLC, Corporation, etc.). This is not legal advice; these are just notes to help you research the best route for you.
Each business structure has its own pros and cons, so it’s important to choose the one that’s right for you. For more details, you can check out the resources at the Small Business Administration (SBA).
If you need professional advice, contact an accountant or attorney near you.
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Sole Proprietorship
A sole proprietorship is the simplest and most straightforward way to start a business. It means you and your business are the same legally, which also means you’re personally responsible for everything—like debts and legal issues.
This type of setup works great for small, low-risk businesses, but it doesn’t offer protection for your personal assets, like your house or savings. Plus, building business credit can be tough because it’s tied directly to your personal credit.
Pros:
- Super easy and cheap to get started.
- You’re the boss—no one else to answer to!
- There’s not much paperwork or complicated rules to follow.
- Any money you make goes straight to you.
Cons:
- You’re on the hook for everything—if your business owes money, so do you.
- It’s hard to get loans or investors since they see it as more risky.
- Your personal and business finances are tied together, making it tough to separate them.
- It may not look as professional or credible as other business types when dealing with banks or investors.
Tip: If you want to launch your business today, this is the fastest route. However, we advise incorporating your business as soon as possible.
Partnerships
A partnership is a business owned by two or more people. It’s a great option if you want to team up with others to share the work, responsibilities, and resources.
There are two types of partnerships, and each comes with different levels of involvement and risk: general partnerships and limited partnerships.
1. General Partnership
In a general partnership, everyone shares equal responsibility for running the business. That means all partners are involved in the day-to-day operations and big decisions. However, it also means that all partners are personally responsible for any business debts or legal issues.
Even if one partner makes a mistake, everyone is held accountable. This works well when trust is high, and everyone is on board with sharing both the rewards and the risks equally.
2. Limited Partnership
In a limited partnership, not all partners are equally involved. Some partners, called “limited partners,” invest money into the business but don’t participate in the day-to-day operations. These limited partners have less personal risk—if something goes wrong, they can only lose what they invested.
Meanwhile, the “general partners” manage the business and take on full liability. This setup is great if some people want to invest but don’t want the hassle of running the business.
Pros:
- You can split the workload and decisions with your partners.
- Easier to pool money and resources compared to going it alone.
- Different partners can bring fresh ideas and unique skills to the table.
- It’s simpler to set up than a corporation, with fewer rules to follow.
Cons:
- In a general partnership, all partners are personally responsible for business debts—even if they didn’t cause the problem.
- Disagreements between partners can lead to serious issues or even break up the business.
- If one partner leaves, you may need to restructure or dissolve the partnership.
- It can be harder to attract outside investors compared to other business types.
Limited Liability Company (LLC)
An LLC combines the best of both worlds from a corporation and a sole proprietorship. As a business owner (or “member”) of an LLC, you’re protected from personal liability, meaning your personal assets—like your house or savings—are safe if the business runs into debt or legal trouble.
This setup gives you the personal protection of a corporation without all the complex regulations and red tape that come with it.
An LLC is also flexible, allowing you to choose how you want to manage it—whether by a single owner or multiple members. It’s a great option for small businesses that want some protection but don’t want the hassle of a full-blown corporation.
Pros:
- Protects your personal assets from business liabilities.
- Fewer regulations and simpler to manage than a corporation.
- Flexible structure—can be managed by one person or multiple members.
- No double taxation—profits are only taxed once, unlike corporations.
Cons:
- Can be more expensive to set up than a sole proprietorship or partnership.
- Some paperwork and annual fees are required to keep the LLC in good standing.
- Not ideal if you’re looking to raise money from big investors—they often prefer corporations.
Corporations
A corporation is a business structure that’s completely separate from its owners, known as shareholders. This setup offers strong protection for the owners—meaning they aren’t personally responsible for the company’s debts or legal issues. Essentially, the corporation itself takes on all the liability. This makes it a great option for larger businesses or those looking to raise money from investors.
However, corporations come with more complex rules and regulations. There’s more paperwork involved, and they’re subject to something called double taxation—the corporation pays taxes on its profits, and then shareholders also pay taxes on dividends they receive. Some businesses choose to avoid this by structuring themselves as an S-Corp, which helps avoid double taxation while still enjoying the benefits of a corporation.
There are several types of corporations, each offering different benefits:
C Corporation (C-Corp)
A C Corporation is the most common type of corporation. It’s taxed as a separate entity, meaning the business pays taxes on profits, and shareholders are also taxed on dividends. This leads to “double taxation,” but C-Corps offer the strongest liability protection and are ideal for larger businesses looking to raise significant capital by selling shares.
S Corporation (S-Corp)
An S Corporation is a business structure that offers tax advantages by avoiding “double taxation.” Instead of both the business and owners paying taxes on profits, only the owners report profits on their personal tax returns.
This setup provides the liability protection of a corporation with simpler tax handling, making it a popular choice for small to medium-sized businesses that want corporate protection without complex tax requirements.
Pros:
- Owners are not personally liable for business debts—strong liability protection.
- Easier to raise money by selling shares to investors.
- The corporation continues to exist even if owners or shareholders leave.
Cons:
- More complicated and expensive to set up and maintain compared to other business structures.
- C-Corps are subject to double taxation unless structured as an S-Corp.
- Requires more ongoing paperwork and reporting to stay compliant with regulations.
Non-Profit Corporation
A Non-Profit Corporation is a business that’s all about helping others, not making money for its owners. Any money it brings in goes right back into supporting its mission—whether that’s for charity, education, religion, or community causes. Non-profits are set up to benefit the public or a specific group of people.
One big perk of being a non-profit is that you can apply for tax-exempt status, like the well-known 501(c)(3), so you don’t have to pay federal income taxes. To keep this benefit, non-profits have to follow certain rules, like using profits only to support their mission and not paying out earnings to individuals.
They also have to follow some of the same rules as regular corporations, such as filing paperwork and having a board of directors. But in return, they’re eligible for grants and donations to help fund their mission.
Pros:
- Eligible for tax-exempt status, so no federal income tax on profits.
- Can receive donations and grants to fund its mission.
- Owners and board members aren’t personally liable for the organization’s debts.
Cons:
- Must follow strict guidelines to maintain tax-exempt status.
- Profits must be used to further the mission—not distributed to owners.
- Requires ongoing paperwork and reporting to stay compliant.
If you want to support a cause or give back to the community rather than make money for yourself, a non-profit corporation is a great choice!
