California has one of the best climate environments in the US. It also has beautiful mountainscapes and some of the best technology companies in the world. Forming an LLC in California can provide new small businesses with the necessary legal protection and an attractive opportunity for growth and success

Major companies such as Facebook, Wells Fargo, and Chevron are now making California their home. It is easy to see why so many others are starting their businesses in the “Golden State”.

Although a number of high-tech companies have left the region in recent years, California is still the land of opportunity. Here is why.

1. It is Focused on Small Businesses

As an economy, California ranks 5th in the world. This means that there is plenty of wealth for small businesses to tap into. Small businesses make up over 99% of all registered businesses in the state. It therefore came as no surprise that the 2021 budget proposal included an incentive for anyone opening their business in California.

Currently, small businesses make up just under 50% of all job opportunities. California has a depth of talent for businesses looking to hire. Moreover, the government’s Employment Training Panel (ETP) assists companies in reimbursing them for upskilling their current employees.

2. Vast Networking Opportunities

California also known for its talent pool. Competition is fierce and some of the country’s best and brightest minds call the state their home.

There are yearly trade shows like the Oracle Open World and Dreamforce shows that pull a crowd of around 60,000 people worldwide. This is the perfect opportunity to expand a business’s reach.

The state is mostly known for its contributions to the Technology space. It also contributes significantly to the Engineering, Finance, Marketing, and Supply Chain industries.

3. Help for New Businesses

California has a number of small business centers that can help a business grow and maintain longevity. Entrepreneurs also have an opportunity to study at either UCLA or USC, both of which offer world-class entrepreneurial study programs.

Apart from the great educational programs and business centers to choose from, investor activity in the region is also high. Keen investors are always looking for innovative new business ideas. With hundreds of venture capitalists available, the chance of obtaining start-up capital is higher in California than it is in most other states.

4. Tax Benefits for S-Corporations

Although California tax rates are ranked in the top 10 highest of all the states in the US, forming a California S-Corporation does come with some tax benefits.

An S-Corporation that provides health benefits to its members may deduct the cost as a business expense. Many small businesses choose to form an S-Corporation. This is shareholders are taxed through their personal income at an individual level, as the business is not taxed as an entity. In addition, taxes are lower than that of a Limited Liability Company (LLC).

Other tax benefits a small business may qualify for are Capital Gains Exemption or Small Business tax.

5. Delightful Weather

Sandy beaches, sunshine, and beautiful mountains are some of the reasons California is ranked as the 6th happiest state in the US. Studies have shown that nice weather equals more time outside for exercise and Vitamin D which keeps people healthier and happier. The happier the employee, the more productive the business.

Setting up a business in Southern California means that business operations also won’t be affected by snow as temperatures are still in the sixties during the winter months.


California is culturally diverse, with people from all over the world flocking to the state for opportunities. With almost 40 million residents, it is the largest state by population numbers in the US.

This means that with the mountain of opportunity also comes some research that must be done. Regional areas can differ greatly in terms of culture, weather and wealth. Overall, the state has a strong economy and the government is geared towards assistance for start-up companies.

New businesses keep popping up daily and investor interest is high. While the tax rate is far from the lowest in the country, the state does offer some great tax benefits and relief for small businesses.

Overall, it is one of the best states in the US to live in and start a business.