How do I get a general merchandise trading business in Los Angeles, CA licensed and registered?

Jose wrote: “We plan on buying and reselling goods. Maybe we will also get into the food side of the business, making food and selling it, as well as selling other items directly to the public and perhaps through some online apps.”

Hi Jose, congratulations on Super Co.! Mixing wholesale lots with retail sales spreads your risk and lets you move inventory through more than one channel. Everything starts with the California seller's permit, the registration suppliers and market organizers will ask to see. Here is what we will cover: how to structure Super Co., the tax IDs it needs, and the licenses that let you open in Los Angeles, then a quick recap.

Buying goods to resell is exactly what a California seller's permit and resale certificate are for: you present the certificate to your suppliers and skip the tax on inventory, then collect tax from your customers. The food side is a separate world, because making and serving food in Los Angeles brings its own kitchen approvals, inspections and food handler training, and hot prepared food is taxable. Delivery apps may collect tax on their own platform, so track those payouts separately from direct sales. Get the reselling side running first, and add the food line once its approvals are in hand.

What Super Co. needs

1. California seller's permit – You will be selling taxable goods, so register to collect sales tax before your first sale. It also lets you buy inventory for resale without paying tax on it.
2. LLC (limited liability company) – An LLC keeps business debts and lawsuits separate from your personal home and savings. If a resold space heater sparks a house fire and the buyer sues, an LLC keeps the product claim aimed at the business. Once profits grow, an LLC can elect S corporation tax treatment, which can lower self-employment tax; ask a tax adviser when the numbers justify it.
3. California fictitious business name statement – Most banks will not open an account or deposit checks made out to "Super Co." until the name is registered to you, either as a DBA or as the exact name of your LLC.
4. EIN (federal tax ID number) – You plan on 2 employees, so the federal tax ID number (EIN) is required for payroll, and you will also use it for the business bank account and supplier accounts.
5. California employer ID – With 2 employees, you need a state employer account number for payroll withholding and unemployment insurance. It works like the EIN, but for state payroll taxes.
6. Business license – Governments license businesses so they can collect a modest tax, usually based on gross receipts or a flat yearly amount, and keep inspectors checking safety: exits, fire extinguishers, and how many people a space can hold. Plan on one for Super Co. in Los Angeles. If you rent, many permits ask for the landlord's written consent to run a business from the property.

By the numbers: Banks, insurers, and tax forms will ask for your industry code. For a general merchandise trading business it is NAICS 423990 (Other Miscellaneous Durable Goods Merchant Wholesalers). With 2 employees planned, you are already creating jobs in Los Angeles. That makes 6 items on your list.

Tip: Keep supplier invoices and resale certificates organized so you can prove where every item came from.

To recap: Super Co. in Los Angeles, CA needs a sales tax permit, an LLC, a DBA, an EIN, a state employer ID, and a business license. With the paperwork done, the fun part begins: serving your first customers.

We can file your seller's permit and the other registrations for you: start here.