Legal Checklist for Opening a New Business in San Diego

Starting a business in San Diego is exciting. The city’s mix of tourism, tech, biotech, hospitality, and small business culture creates real opportunity. But before you open your doors, there are important legal steps to handle. Skipping them can lead to fines, delays, or even forced closure. Here’s a clear, practical legal checklist to help you launch the right way in San Diego.

1. Choose and Register Your Business Structure

Your first decision is your legal structure. Common options include sole proprietorship, partnership, LLC, and corporation. Many small business owners choose an LLC because it offers liability protection while remaining relatively simple to manage.

If you form an LLC or corporation, you’ll register with the California Secretary of State. Sole proprietors using a name different from their legal name must file a Fictitious Business Name (DBA) with San Diego County Clerk.

Read more: How to Choose the Right Legal Structure for Your Business

2. Apply for a Federal EIN

Most businesses need an Employer Identification Number (EIN) from the Internal Revenue Service. You’ll use this number to open a business bank account, file taxes, and hire employees. Even if you don’t plan to hire right away, getting an EIN keeps your personal Social Security number off business documents.

3. Obtain a San Diego Business Tax Certificate

All businesses operating within city limits must apply for a Business Tax Certificate through the City of San Diego. This is sometimes referred to as a business license, though technically it is a tax registration. You must complete this step within 15 days of starting operations.

Fees vary depending on your business type and number of employees.

4. Secure State and Local Permits

Depending on what you’re opening, you may need additional permits. Restaurants require health permits. Contractors need state licensing. Retailers selling taxable goods must register for a seller’s permit with the California Department of Tax and Fee Administration.

If your business involves construction, remodeling, or signage, check zoning and building requirements with the city’s Development Services Department to ensure your location is approved for your business type.

5. Check Zoning and Land Use Rules

Before signing a lease, confirm that your intended activity is allowed at that address. Zoning laws in San Diego vary by neighborhood. Operating in the wrong zone can shut your business down before it even gains traction.

Home-based businesses also need to comply with specific regulations, including signage restrictions and limits on customer visits.

6. Get Proper Insurance Coverage

California does not require general liability insurance for all businesses, but it’s strongly recommended. If you hire employees, workers’ compensation insurance is mandatory under California law.

Depending on your industry, you may also need professional liability insurance, commercial auto insurance, or product liability coverage.

Read more: The Legal Risks of Operating Without Business Insurance

7. Understand Employment Laws

If you plan to hire staff, you must comply with California’s strict labor laws. This includes minimum wage requirements, overtime rules, meal and rest breaks, and anti-discrimination policies.

You’ll also need to register with the California Employment Development Department for payroll taxes.

8. Draft Essential Legal Documents

Protect your business with clear contracts. This may include operating agreements, partnership agreements, client service contracts, vendor agreements, and employee handbooks. Solid documentation prevents misunderstandings and legal disputes later.

Read more: Why Are Contracts Important for Business Success?

Final Thoughts

Opening a business in San Diego comes with opportunity, but preparation is everything. Taking the time to complete each legal step builds a strong foundation. When in doubt, consulting a local business attorney or accountant can save you time, stress, and costly mistakes down the road.

For legal help in California and your other needs, contact BERYS LAW on this page. We also offer courses on real estate investing, landlording, and templates right here!