Category: Business

Blog Post and Articles related to business

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Gym Fitness Bookkeeping Chart of Accounts

Every business requires a chart of accounts. Wait, WHAT IS A chart of accounts!? As a business owner, a gym/fitness owner you get out of bed and don’t think accounting. But, I do and I am here to help. As the owner, you don’t need to know it all, but you do need to know the basics and how to read financial statements if you want to grow your business. Just like your own fitness clients, some want to get results and others want in depth knowledge in what to eat and which exercises improve a certain muscle. Be the owner that wants to improve and learn what each account affects. I am planning on making some 101 brochure’s to help you in the path of accounting. Check back often to learn more on the basics specifically for gym’s and fitness centers.

Let’s jump in.

Chart of Accounts

The chart of accounts is a list/categories used to record all your business entries. Each industry has a slight difference chart of accounts but they all have the main accounting categories. The main categories are Assets, Liabilities, Owners Equity, Revenue, and Expenses. Once you get the basics you can always add more when you want to hone into a certain muscle, I mean account.

Now, lets dig in a little deeper and see how each chart of accounts is built. After all, everything is structured to be easily understood by all. In accounting we always have two financial reports that shows us the picture of our business. The first report is the Balance Sheet and this shows us a snapshot of three categories; Assets, Liabilities, and Owners Equity. The second report is the Income Statement (AKA Profit/Loss Statement) which is a recap of 2 categories; Income and Expenses.

Balance Sheet Accounts  

– Assets
– Liabilities
– Owner’s Equity

Income Statement Accounts

– Revenues
– Expenses
– Misc Income & Expenses

(Check out the posts about the Balance Sheet and Income Statement for more info there).

Remember to keep your chart of accounts simple and add to it as you grow. You want it to be easily understood by you. You can always add more accounts if you notice discrepancies where you want to focus on the big picture of the account. The accounts are an easy way for an owner to see changes. Monthly reports help see the totals, but detail reports help you see the fine lines in an account.

Here is a Chart of Account I use for Gym Fitness Businesses on a Cash Basis Method.

Balance Sheet: Asset Accounts

100****  Checking Account (* are the last 4 digits of the account number)
110****   Savings Account (* are the last 4 digits of the account number)
160      Prepaid Insurance
175      Buildings (if you own your building)
176      Accumulated Depreciation – Buildings
180      Equipment (Fitness Equipment)
181      Accumulated Depreciation – Equipment

Balance Sheet: Liability Accounts

210      Wages Payable
220      Interest Payable
230      Unearned Training Revenue
240      Mortgage Payable (if you own your building)

Balance Sheet: Owner’s Equity Accounts

300      Capital Deposits – Owner X
310      Capital Withdraws – Owner X
320      Retained Earnings (Summary of Profit/Loss)

Income Statement: Revenue Accounts

400      Gym Membership Monthly Training Sales
405      Gym Nutrition Sales
406      Gym Merchandise Sales

Income Statement: Expense Accounts

500     Cost of Merchandise Sold (Generic)
501 Direct Coach Labor
505     Cost of Nutrition Purchase
506     Cost of Gym Merchandise Sold
601      Advertising
602      Bad Debts
603      Bank Charges
604      Charitable Contributions
605      Dues & Subscriptions
606      Gym Supplies/Equipment
607       Insurance
608      Janitorial & Cleaning
609      Lease Expense
610       Legal Expense
611        Licenses & Permits
620      Meals & Entertainment – (Generic/Unsure)
621      Meals & Entertainment – 100% Deductible
622      Meals & Entertainment – 50% Deductible
630      Office Expense
640      Payroll Expense – Coaches
643      Payroll Expense – Admin
644      Payroll Expense – Owner’s Pay
650      Payroll Tax Expense
660      Rent
661       Repairs & Maintenance
665      Training & Education
667      Travel
670      Utilities (I include gas, water, electricity, phone, internet, cable)
800     Amortization
805      Depreciation

Income Statement – Other/Misc Income & Expense

850      Interest Income
860      Interest Expense

Use this chart of accounts to get your gym fitness cash basis bookkeeping started.

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What is the difference between IRS Form 1099-NEC and Form 1099-MISC?

Beginning with tax year 2020, the 1099-MISC has been redesigned due to Form 1099-NEC. Employers will no longer report nonemployee compensation, such as payments to independent contractors, on Form 1099-MISC.

Form 1099-NEC

This tax year 2020, employers must use Form 1099-NEC to report nonemployee compensation, if the following criteria is met.

  1. Payment made to someone who is not your employee.
  2. Payment made for services of your business
  3. Payment made to an individual, a partnership, or an estate.
  4. Payments made of $600 or more during the year.

This nonemployee compensation are payments made to independent contractors, fees paid for professional services such as of attorneys and accountants, and commissions paid to nonemployee salespersons that are subject to repayment but not repaid during the calendar year.

Form 1099-NEC must be given by employers to the individual and filed to the IRS by January 31, 2021.

Form 1099-NEC example:

1099NEC.gif

Source: Internal Revenue Service

Form 1099-MISC

This tax year 2020, employers must use Form 1099-MISC to report payments made if the following criteria is met.

  • At least $10 in royalties or broker payments in lieu of dividends or tax-exempt interest.
  • At least $600 in the following:
    • Rents.
    • Prizes and awards.
    • Other income payments.
    • Generally, cash from a notional principal contract to an individual, a partnership or an estate.
    • Medical and health care payments.
    • Payments to an attorney.
    • Section 409A deferrals.
    • Nonqualified deferred compensation.

Form 1099-MISC must be given by employers to the individual by January 31, 2021 and filed to the IRS by February 28 or March 31st if filed electronically.

Form 1099-MISC example:

1099-MISC

Source: Internal Revenue Service

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Real Estate Investor Tax Expenses

Real estate is one of the most popular investment strategies in California. It is a great way for real estate agents and real estate related investors look for protecting and growing one’s wealth. Real Estate Rentals or Real Estate Flipping both have different approaches when it comes to tax write off’s. We are going to focus on the Real Estate Rental tax write off’s as I have been asked more questions in regards to rental write offs. The key to remember in any business, is that all expenses must be ordinary and necessary.

The IRS lets you deduct ordinary and necessary expenses required to maintain the property that you rent to others, even when the property is vacant, as long as you’re trying to rent it.

What are the best Real Estate Rental Tax Deductions?

  • Deduction
  • Depreciation

These are the top 2 tax deductions that benefit an investor each year.

Deduction

Deductions are qualified expenses used for your rental business in the year they are paid. Wait, what is a qualified expenses and aren’t all expenses qualified. No, not all expenses are treated equally for tax purposes. An example on a non-qualified expense would a personal car purchase that is used 10% of the time to visit the property.

As the property manager you can deduct the ordinary and necessary expenses for managing, conserving, and maintaining the property. Generally yearly expenses include mortgage interest, property taxes, advertising, maintenance, utilities and insurance. Because repairs keep a property in good condition and do not add value to the property, investors can write off repairs. Examples include fixing leaks, painting, and replacing broken parts of the rental property. Caveat, large repairs can be considered a capital improvement. Check with you local tax professional if the repair was a substantial expense for clarification on how to categorize it.

Tip: It’s important that real estate investors itemize deductions carefully. Owning your business, deductions can come in other forms. Such as using your home office. In many cases, you can deduct a portion of their home working expenses such as Internet, phone bill, office lease, and printer expenses.

Types of most common Rental Property Qualified Expenses

  • Advertising
    • Advertising expenses include rental signs and marketing the rental unit on sites (including social sites). If you are your own marketer and purchase a camera that is ordinary and necessary used for the purpose of rental marketing photography, it can be a qualified expenses.
  • Auto and travel expenses
    • Travel expenses must be specific to the rental property. Documentation is highly recommended to provide proof when audited. Documentation should at a minimum provide information that shows date, mileage, who you met, and description of travel reason.
      i.e. 10/11/2020 – 10 miles travel by car maintenance service with ABC contractor.
  • Cleaning and maintenance
    • Cleaning and Maintenance expenses include expenses incurred when the unit is turnover to a new tenant.
  • Commissions
  • Depreciation
  • Insurance
  • Interest (other)
  • Legal and other professional fees
    • Legal and other professional fees include fees paid to lawyers, bookkeepers, accountants, and tax preparers.
  • Local transportation expenses
  • Management fees
    • Management fees include all payments made to a property management company that manage the property.
  • Mortgage interest paid to banks
    • Mortgage Interest
    • Refinance Fees and Mortgage Points: Classified in Assets/Depreciation section instead of the expense section. The IRS considers them “amortizable intangibles”. Basically, they are expensed over the projected life of the asset (amortization).
  • Points
  • Rental payments
  • Repairs
    • Repairs expenses can be a little difficult to categorize. Typically you want to record all repairs expenses that are incurred to keep the property assets in proper working order. Large repairs should be categorized under the depreciation expense if it will improve the property and extend the useful life of the assets.
      i.e. Roof patch repair is a repair expense. Roof repair, if repairing a large portion of the roof can be consider a asset improvement and will need to be depreciated.
  • Taxes
    • Tax expenses include property taxes and other related tax expenses.
  • Utilities
    • Utility expenses include utilities that are paid by the owner. If the tenant pays utility bills, then the owner can not claim it as an expense.

Depreciation

Depreciation are large expenses or improvements that will be spread over a number of years. Say that again. A depreciation is a form of spreading a large capital improvement expense over a period of time, usually numerous years.

For example, installing a new Air Conditioning unit. If the air conditioner were to break down and you are looking to replace it. This service is not a repair and instead is a capital improvement. A air conditioner installation in California averages around $7,000 and the IRS depreciation table indicates that this asset must be depreciated over 27.5 years. Which really means, you paid $7,000 this year, but the IRS only lets you expense $254 this year and $254 the other 26 years.

The Taxable Numbers:
+ Rental Income: $12,000 ($1,000 per month)
– Utilities: $1,200 ($125 per month)
– Taxes: $1,200 (Annual property tax)
– Insurance: $1,200 ($125 per month)
– Depreciation: $254 (A/C Depreciation)
= Taxable Profit: $8,146

Your Bank Numbers:
+ Rental Income: $12,000 ($1,000 per month)
– Utilities: $1,200 ($125 per month)
– Taxes: $1,200 (Annual property tax)
– Insurance: $1,200 ($125 per month)
– A/C Installation: $7,000 (A/C installation)
= Annual Profit: $1,400

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How to form a California LLC

Once a month I get a a new business owner that wants to create an LLC because someone told them that an LLC protects you from liability. Most of the time as a small business owner, we loose focus on where we are starting and we focus on where we are going to be in 5 years. While, I encourage planning for the future, we first we need to remember where we want to start. If you are new to the business world, we must learn to crawl before we consider ourselves an Olympic athlete. With that, I always have a set of questions I ask new business owners to a better idea of where the business owner is currently at in determining the best fit for the business.

Keep in mind that your business has is setup to have a legal entity and a tax entity. If you decide to create an LLC as a legal entity, you can choose to have your LLC taxed as a Sole Proprietary or as a Corporation. But more on that at a later post. For now let us focus on reasons and non-reasons to set-up a LLC as a legal entity.

Top Reasons for an LLC (Legal Entity)

  • Own Rental Property
    • Consider having a category of properties over one LLC per property.
  • Need Asset Protection
    • Looking to protect assets from the operations of the business. Such as lawsuits from contractors or clients.
  • Partnership
    • Highly recommend as each business partner is protected from the actions of another partner.

Top Reasons NOT To Create an LLC (Legal Entity)

  • Tax Savings
    • LLC does not save taxes in itself
      • In Fact, in California you must pay a minimum of $800 a year in taxes
      • Self Employment Tax still applies (Unless your Tax Entity is a Corporation)

Follow these steps to create/form your California LLC.

  1. Check to see if your business name is unique and available to use
  2. Look into creating an EIN. Not necessary but highlight recommended before starting an LLC.
  3. Fill out Form LLC-1 and file it at California Secretary of State. Plus pay a filing fee of $70 and $ 5 certification fee
    1. When choosing the LLC. Decide the abbreviation form you prefer to use after your business name.
      1. LLC
      2. L.L.C
      3. Limited Liability Co.
      4. Limited Liability Company
      5. Ltd. Liability Company
      6. Ltd. Liability Co.
    2. Provide the business address (No PO BOX)
    3. Decide the Legal Entity (Not the same as tax entity)
      1. Individual
      2. Corporation
    4. Decided Member Management (Who will manage the LLC)
      1. Member Managed
      2. Owner Managed
  4. Prepare Operating Agreement
    1. The agreement should include guide on members percentage, voting powers, rights and responsibilities to each entity, profit/loss distribution, rules for meetings and votes, buy out and buy sell provisions to help when members leave or wants to join.
    2. Fee plus state filling fees.
  5. File Form LLC-12 the Biennaial Report to update the state of LLC Status
  6. Annual state Tax payment of $800. If net income is over $250,000, then additional fees may apply.
California Form LLC-1Download

LLC Import Notations

An LLC is not just filing a paper with California state. Treat the LLC formation and maintain the operations of the business as a corporation to keep the same type of protection. Check my blog for my post on Corporation and asset protection.

An LLC can be structured to have multiple LLC’s. The Mother LLC and all baby LLC under. More on creating multiple LLC’s on a different post.

Keep in mind when creating your business LLC, that you keep in mind the states processing time.

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California Seller’s Permit and Certificate

When a business purchases inventory to resell, they can do so without paying sales tax.  In order to do so, the retailer will need to provide a California Resale Certificate to their vendor. 

What is a Resale Certificate?

When retailers purchase products to resell, they often don’t pay sales tax on the purchase.  Instead of the retailer paying sales tax, the retailer charges sales tax to their customer on the final value of the merchandise.  The collected sales tax is then sent by the retailer to the Department of Tax & Fee Administration. 

For example, when a vitamin store purchases nutritional vitamins to sell in their gym, by having a resale certificate, the gym owner won’t pay sales tax on the transaction.  When a client purchases the health vitamins, the retailer will charge sales tax to the client based on the full price of the purchase.  The retailer will collect the sales tax from all their transactions and periodically (typically at the end of the quarter) send the sales tax to the California state.

The Resale Certificate is the seller’s evidence why sales tax was not collected on a transaction.  Similar names for a Resale Certificate include Reseller Number, Seller’s Permit, Exemption Certificate or Reseller’s License.  In order to prove a buyer intends to resell the product, they must provide a valid resale certificate to the seller of the goods.

*Resale certificates are ONLY to be used for inventory that will be resold. It is not for tax-free purchase of items used in normal business operations such as paper, pens, etc.

Getting Started

Before a business starts selling products or providing taxable services, they must first get a California Seller’s Permit from the California Department of Tax & Fee Administration. The Seller’s Permit is sometimes referred to as a Sales Tax Permit, Sales Tax Number, or Sales Tax License.

The Sales Tax Permit and Resale Certificate are commonly thought of as the same thing but they are actually two separate documents. The Sales Tax Permit allows a business to sell and collect sales tax from taxable products and services in the state, while the Resale Certificate allows the retailer to make tax-exempt purchases for products they intend to resell.

After registering, a sales tax number will be provided by the Department of Tax & Fee Administration. This number will be listed on the Resale Certificate.

A resale certificate can be generated by the buyer or seller provided their certificate contains the required information. To make things easier, the Department of Tax & Fee Administration has a Resale Certificate (BOE-230) that is available for download to document tax-free transactions. 

Resale Certificate Fillable Form

Fillable California Resale Certificate - Form CDTFA-230

How to fill out the California Resale Certificate – Form BOE-230

Filling out the BOE-230 is pretty straightforward, but is critical for the seller to gather all the information.

The California Department of Tax & Fee Administration requires the seller to have a correctly filled out BOE-230 Resale Certificate.  If filled out incorrectly, the seller/supplier could end up owing sales taxes that should have been collected from the buyer in addition to penalties and interest.  

Steps for filling out the BOE-230 California Resale Certificate

Step 1 – Download the California Resale Certificate Form BOE-230 
Step 2 – Enter the seller’s sales tax permit number
Step 3 – Describe the business activities of the seller
Step 4 – Enter the business name of the seller
Step 5 – Describe the property being purchased for resale.  Be sure not to be generic and described by either by an itemized list or by a general description.
Step 6 – Enter the name, signature title, address and phone number of the purchaser

The resale certificate is kept on file by the seller and is not filed with the state.

Does a California Resale Certificate Expire?

A resale certificate in California is valid until it is revoked in writing by the seller, unless the certificate was issued for a specific transaction, which is generally good for up to one year.   

Providing a Seller with a Resale Certificate

If the seller/supplier doesn’t accept the certificate, the buyer will have to pay sales tax on the merchandise being purchased.  In most cases, they will be able to get a credit for the sales taxes paid later on their sales tax filing. 

CALIFORNIA:
It the seller is out-of-state, California is one of a few states that don’t recognize out-of-state resale certificates.  In order to purchase tax-free from vendors in other states, the buyer will have to register for a sales tax permit in the seller’s state. 

Accepting a Resale Certificate

When a business is presented with a resale certificate, it is the seller’s responsibility to verify the buyer’s information is correct and maintain records to demonstrate the seller’s due diligence.  Failing to verify this information may put the liability of paying California sales taxes on the seller.   It’s also important to note that a seller could end up with a misdemeanor charge if they issue a resale certificate in order to avoid collecting sales tax from a buyer. This charge can come with a fine of $1,000 to $5,000 and/or imprisonment for up to one year.

Before accepting a resale certificate, a seller should:

  • Review the resale certificate to make sure it is completely filled out. 
  • Verify the purchaser’s sales tax permit. Visit California Department of Tax and Fee Administration’s to verify or call (888) 225-5263.
  • Verify that the goods sold match the description with the purchaser’s line of business. i.e. a office furniture store that is looking to buy office supplies tax-free will not be acceptable.  
  • Keep a copy and file of the resale certificate
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California state tax numbers

Once you have the EIN, you will also need to get a California tax numbers in order to pay for a variety of state business taxes. 

Business tax numbers in California are often confused with the Employer Identification Number.  The EIN is a separate number that is used to federally register a business with the Internal Revenue Service (IRS) and may be needed in addition to state tax numbers.   

The most common reasons a California business will need to register for a state business tax numbers include:

  • Sales Tax – Businesses selling products and certain services are required to collect sales taxes and will need to register with the California Department of Tax & Fee Administration. Often paid Quarterly.
  • Employees Taxes – Businesses with employees will need to register with the California Employment Development Department to get a Withholding Tax Number and Unemployment Number to pay for payroll taxes.  Often paid Monthly.
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California Employer Identification Number (EIN)

Starting a business. It’s time to register and get a California Employer Identification Number (EIN) and California state tax ID numbers.  The Identification Numbers are used to register a business with the federal and state government in order to pay sales taxes, payroll taxes, and withhold taxes from employee wages.

Let’s dive in and see when they are required, when you need to use them, how to get them and the cost of getting them.

Employer Identification Number (EIN)?

The Employer Identification Number, EIN, also known as the FEIN or Federal Employer Identification Number. The FEIN is a unique 9 digit number that identifies a business, similar to a social security number.

The EIN is needed for California business entities that are sole-proprietorship, single-member LLC (with employees) registered as a partnership, corporation, or multi-member LLC, trust, estates, real estate mortgage investment conduits, and non-profit organizations. The EIN is optional for sole-proprietorship and single-member LLC’s that do not have employees, the owner’s social security can be used instead.

EIN Required:
To hire employees, paying payroll taxes, income tax withholdings, create a 401(k), purchase existing business, create a partnership or LLC, file bankruptcy, unemployment taxes, and to prevent identity theft.

EIN Uses:
You can open up a business bank account, apply for a business license and permits, and filing tax returns.

Apply for an EIN

Visit the Internal Revenue Service (IRS) website, during normal working days and hours.

It takes less than 30 minutes to file the EIN online. The EIN will be given within minutes.

Other options, include by mail and fax. Download the form and follow the instruction provided on SS-4 form.

COST: Free

Information to Provide for an EIN

Make sure you have the following information to make the process smoother and faster.

  • Legal Business Name and Address
  • Name(s) of the owner(s) or principal officer(s)
  • Name(s) and contact information of the owners, directors, officers or members
  • Type of business and what description of products/services the business does
  • Date the business was started or acquired
  • Closing month of the entity’s accounting year (Recommend December 31st)
  • Number of employees expected to be hired
  • Contact information

Multiple EIN

If you already have an EIN for your small business but want to have multiple ones for different parts of your business, here are some tips. You can only create one (1) EIN per day.

Reasons to have multiple EIN is to separate your business entities. For example, a real estate agent can have one EIN for his rental property business, a EIN for his real estate agent business, and even a EIN for his construction business. Just note, that each EIN should have its own bank account to help separate your revenue and expenses. Otherwise, come tax time, you will be spending hours gathering everything and possibly loosing valuable qualified deductibles.

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Free Apps to Track Your Business Miles

If you drive your personal vehicle for business they may qualify for the standard mileage rate deduction.

Prior to Apps, can you believe that tracking was done by notebook. Just as with a notebook, you miss noting down a business drive you took. But with an App, it can automatically track mileage for you. Here is a few of the Apps, I believe you will enjoy using, in no particular order.

Free Mileage Tracker Apps That Work

Stride

This app tracks your miles and more. The app is FREE and log every mile you drive and can help track expenses like parking fees and toll fees.

Cost: Free
Android and Apple

MileIQ

This app tracks your miles and more. MileIQ has a free version with limited drives per month, max of 40 drives. Do more than 40 drives a month and you will need to sign up for the premium unlimited version. Drives can be categorized into personal or business drives.

Cost: Free with 40 drives. Unlimited $5.99 P/ Month
Android and Apple

Everlance

This app tracks your miles and more. The app automatically starts and stops by detecting when your car starts moving and tracking those miles. All you have to do is swipe to identify if it was a business or personal drive. Still need more, set a work schedule and the App will categorize any drive during that as a business drive.

Cost: $8 P/Month or $60 for the Year.
Android and Apple

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How to File a Secretary of State SI-550 NC Form

A business that is a corporation must file form SI-550 NC every year with a filling fee of $25.

Here is the process/instructions in filling the California Secretary of State Statement of Information.

  1. Find new applications online at State of California Site.
  2. Changes to information in a previously filed Statement of Information can be made by filing a new Form SI-550. If there has been no change in any of the information contained in the previous complete Statement of Information a Statement of No Change (Form SI-550 NC) may be used.
  3. Status of Corporation: Filing Form SI-550, the corporation must be active or suspended/forfeited on the records of the California Secretary of State.
  4. Fees: Fees vary and payments are made by check payable to the Secretary of State.
  5. Copies: To obtain a copy or certified copy of this filed Statement of Information, include payment for copy fees and certification fees at the time this Statement of Information is submitted. Copy fees are $1.00 for the first page and $.50 for each attachment page.
    For certified copies, there is an additional $5.00 certification fee, per document.
  6. Processing Dates: For current processing dates, go to www.sos.ca.gov/business/be/processing-dates.
  7. Hard Copy Forms: Type or print legibly in black or blue ink. Complete the Statement of
    Information (Form SI-550) as follows.

Item Instruction Tips

  • (1) Enter the name of the corporation exactly as it appears on file with the California Secretary of State, including the entity ending (ex: “The Workout Gym, Inc.” or “Jose’s HVAC Company”).
  • (2) Enter the 7-digit Entity Number Issued by the California Secretary of State.
  • (3A) Enter the complete street address, city, state and zip code of the corporation’s principal executive office.
  • (3B) Enter the complete mailing address, city, state and zip code of the corporation, if different from Item 3a.
  • (3C) Enter the complete street address, city and zip code of the corporation’s principal office in California, if any and if different from Item 3a. Complete this item 3c only if the address in Item 3a is outside of California.
  • (4) Enter the name and complete business or residential address of the corporation’s:
  • a. Chief Executive Officer (i.e. president), Secretary and Chief Financial Officer (i.e. treasurer).
  • (5A) California Stock and Agricultural Cooperative Corporations ONLY: Enter the name and complete business or residential address of the corporation’s current director(s).
  • (5B) California Stock and Agricultural Cooperative Corporations ONLY: Enter the number of vacancies on the board of directors, if any.
  • (6) The corporation must have an Agent for Service of Process. There are two types of Agents that can be named: • an individual (e.g. owner, director or any other individual) who resides in California with a physical California street address; OR a registered corporate agent qualified with the California Secretary of State. An Agent for Service of Process is responsible for accepting legal documents (e.g. service of process, lawsuits, subpoenas, other types of legal notices, etc.) on behalf of the corporation.
  • (6A & B) If Individual Agent: Enter the name of the agent for service of process and the agent’s complete California street address, city and zip code. If an individual is designated as the agent, complete Items 6a and 6b ONLY. Do not complete Item 6c.
  • (6C) If Registered Corporate Agent: Enter the name of the registered corporate agent exactly as registered in California. If a registered corporate agent is designated as the agent, complete Item 6c ONLY. Do not complete Items 6a and 6b
  • (7) Describe the general type of business that is the principal business activity of the corporation.
  • (8) Type or print the date, the name and title of the person completing this form and sign where indicated.

Additional Information to filing Form SI-550

(OPTIONAL) Submission Cover Sheet: To make it easier to receive communication related to this document, including the purchased copy of the filed document, if any, complete the Submission Cover Sheet. For the Return Address: Enter the name of a designated person and/or company and the corresponding mailing address. Please note that the Submission Cover Sheet will be treated as correspondence and will not be made part of the filed document.

Legal Authority: General statutory filing provisions are found in California Corporations Code sections 1502 and 2117 and Food and Agriculture Code section 54040. All statutory references are to the California Corporations Code, unless otherwise stated. Failure to file this Statement of Information by the due date will result in the assessment of a $250.00 penalty. (Sections 2204 and 2206; California Revenue and Taxation Code section 19141.

FTB Suspension/Forfeiture: If the corporation’s status is FTB suspended/forfeited, the status must be resolved with the California Franchise Tax Board (FTB) for the corporation to be returned to active status. For revivor requirements, go to the FTB’s website at ftb.ca.gov or contact the FTB at (800) 852-5711 (from within the U.S.) or (916) 845-6500 (from outside the U.S.). SI-550 – Instructions (REV 12/2020) 2020 California Secretary of State bizfile.sos.ca.gov

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California Business License

There is no state of California business license. There are counties/cities that require licenses. Check your local city to see what requirements are needed to register for a business license.  

Los Angeles –  Businesses located in or have employee conducting business in the City limits of Los Angeles will need to complete a New Business Registration and obtain a Business Tax Registration Certificate with the Office of Finance.

Baldwin Park – Form can be downloaded or can receive the application over the counter and the fee is $133.00. Application and fee can be mailed in or can be paid over the counter in between the hours of 7:30 a.m. to 5:45 p.m.

Covina – The City of Covina is pleased to support and partner with businesses located within our jurisdiction. To determine whether a business is located within the City limits, check the street address. If the address is 2999 or lower, the business location is in the City. If the address is higher than 2999, but has a Covina CA mailing address, the location is in an unincorporated area of Los Angeles County. While some of the resources listed here are provided regardless of location, others are specific to either the City or the County.

Applications for a City of Covina (street addresses 2999 or lower) business license are available from the Finance Department at City Hall, or online in PDF fillable format.  For questions regarding Business Licenses, call (626) 384-5512, or visit the Finance Department, Covina City Hall, 125 E. College St., Monday through Thursday, 7:00am to 6:00pm.

West Covina – The easiest and fastest way to apply for a new business license or renew your current license is using the online filing method. To begin, simply click on the “start now” button located on the right of this page. From the main menu please select the “apply” option to submit a new application for your business.

If you need further assistance applying for a business license, you are welcome to contact us at WestCovina@hdlgov.com or by phone Toll-Free at (626) 513-0043. Office hours are Monday-Friday 8:00 a.m. to 5:00 p.m.”

Azusa – The Business Licensing Division is responsible for Issuing business licenses, Verifying ownership and other related information as requested, and answering questions related to taxation and requirements for operating a business.To schedule an appointment, please call the Business License Division at (626) 812-5249. During normal business hours Monday – Thursday 7:00 a.m. to 4:00 p.m.

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