Are you thinking about starting a tattoo shop in California and looking for some tips on the legal requirements for operating your new tattoo shop lawfully? If so, read on for some tips. Axis Legal Counsel assist a variety of small business owners in the arts and visual design industry, including tattoo shops, throughout California, and has prepared this guide to help new tattoo shop owners get their start. In this article you will learn how to start a tattoo shop in California lawfully and the variety of laws and regulations that apply to tattoo shops in California.
What Business Structure Do you Want to Select for Your New Tattoo Shop?
The first issue that you will have to decide is how to structure your new tattoo shop. Do you want to set your new tattoo shop up as a corporation, LLC, or sole proprietorship? There are a variety of considerations and play, and for most tattoo shop owners, a limited liability company (LLC) is often the most preferable type of entity to run the new tattoo shop. If you’re not sure about what the differences are between a new Corporation, LLC, or sole proprietorship, please check out the following articles. They will discuss some of the tax benefits to choosing a corporation, the separate taxes that apply to LLCs in California, and the election that you can make to be an S corporation, to run a corporation but be taxed as an LLC:
Get Pre-Clearance on Your Business’s New Name
One of the biggest mistakes we often see new business owners make is failing to pre-clear their new businesses name with the California Secretary of State as well as federal and state trademarks. If there’s another business out there that is already using the name that you want to use for your new tattoo shop, you will spend a lot of time and money registering your new business and filling out a lot of forms, and paying a lot of fees, that you may have to do all over, if the existing business pursues you for infringing on their name and brand. We strongly recommend that all new tattoo owners wanting to start their new shops do a pre-clearance to determine whether there is an existing use of the name they want to use for their new tattoo shop. Many tattoo shops use catchy names that are inventive, creative, or reflect the tattoo owners personality. It can be great to have a catchy business name for new tattoo shop. However, if there is already someone using the exact same name, it can make the new business owner’s life miserable.
- CA Secretary of State Website Name Search
- Federal U.S. Patent & Trademark Search
- Having problems or want help doing this? Contact us.
File Your Articles of Incorporation with the California Secretary of State
Once you’ve decided what structure to choose for your new tattoo shop, you must form your new entity with the California Secretary of State. You will need to prepare the following documents:
- Articles of Incorporation
- Bylaws, if you elect to be a corporation
- Operating Agreement, if you elect to be an LLC
- Incorporators Resolutions
- Meetings of the first meeting of the Board (Corporation) or Managers (LLC)
You will file your Articles of Incorporation with the California Secretary of State with the appropriate filing fee, as well as enough of a filing fee to obtain two (2) certified copies of your Articles. You will need the first copy to open up a bank account. You will need a second copy for your records. You will not be able to open a bank account in California without a file-stamped copy of the Articles of Incorporation filed with the California Secretary of State.
- Axis DocPrep Incorporation Packages (Starting at $99)
- Need attorney help? Contact us.
Get an EIN Number
While your documents are being processed with the California Secretary of State, you need to obtain a EIN number from the IRS. An EIN number is the number that identifies your new business with the IRS. It is obtained from the IRS.
- To get an EIN number, click here: https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Apply-for-an-Employer-Identification-Number-(EIN)-Online
Open a Bank Account
Once your file-stamped copies of your Articles of Incorporation have returned from the California Secretary of State, you can now open a bank account. Be sure to bring your drivers license and ID to the bank with you, as well as the certified copy of your articles of incorporation and EIN letter from the IRS. The bank will need to do all the checks under the U.S. Patriot Act to confirm your identity and convince itself that you are opening a bank account for legitimate business, and not for something such as money laundering.
Register for a DBA
Will your new California tattoo shop be doing business under a trade name? Not all businesses are registered with the Secretary of State using the name that they do business under. An example would be registering your business as “TPB LLC” with the California Secretary of State, but doing business as “Tom’s Tattoos.” The “Tom’s Tattoos” would be considered a trade name. To use a trade name, you will need to file a DBA statement in the county that you will be doing business in. This will involve filing the paperwork, going to the local recorder’s office for your county, waiting in line, and having the clerk approve your paperwork and paying the fee. You will then need to publish the DBA in a newspaper for several weeks before it becomes valid. There are a lot of vendors online that will take care of the whole process for you for a flat fee.
Register a Business License With Your City/County
The next step to getting your tattoo shop started, is to register your business with your local city or county. We say city “or” County, because it is different depending on what part of California you are in. If you are in Los Angeles, you would be registering with the City of Los Angeles Office of Finance. The reason for a Business License is to register your business to pay taxes to the City or County. Businesses are generally not allowed to operate in a city or county without a business license. If you run your tattoo shop without a business license, you will be accused of failing to pay taxes and violating the law. To register to receive a business license with your city or county, go to Google and do a search for “[your county or your city] business license” and you will usually receive a search result directing you to the governmental portal where you can register new business online.
TIP: Keep in mind that for some certain cities, you will need to undergo a zoning review. Santa Monica is a great example. Santa Monica regulates businesses to ensure that they are being operated in a part of the city zoned for businesses to operate. This means that you will generally not be able to run a tattoo shop out of a home, or other location located in a residential area. As part of the business registration process, you may be required to complete additional paperwork to allow the city’s business office to conduct a zoning review to determine whether your business can operate in the location it seeks to operate in.
Do you intend to sell products that your tattoo shop? Many tattoo shops sell ointments, piercing or body modification products, before service or aftercare products, or other items. If you intend to sell any thing at all in your new tattoo shop, you will be required to obtain a seller’s permit. A seller’s permit is usually obtained through the city or county in which your new tattoo shop will be operating in California. To find out how to fill the form, you will need to again, do a Google search for “seller’s permit” in your county or city, and you will usually arrive at the governmental page that will provide the form to fill. Once you fill out the form requesting a seller’s permit, you’ll receive your new seller’s permit within 4 to 6 weeks.
Bloodborne Pathogen Training
As part of the process of opening a tattoo shop, you will need to ensure that your blood-borne pathogen training has occurred and was provided by a registered training provider. When you apply for the health permit as a body art practitioner, you will need to disclose when you received your training and who provided it. Every county has different approved providers for blood-borne pathogen training. For example, LA County’s approved list is here: http://publichealth.lacounty.gov/eh/docs/baTrainingProviders.pdf
Health Department Permit
California regulates body art, tattooing, Brandon, body piercing, and permanent makeup through the Safe Body Part Act. The SBPA requires all body or practitioners to register annually with the county, obtain blood-borne pathogen training, provide documentation of hepatitis B vaccination status, obtain specific health information from clients, and obtain what is called “informed consent” from clients. Your health department permit must be filed in the county in which you will be operating. For example, the County of Los Angeles permit for body art practitioners, is located here: http://publichealth.lacounty.gov/eh/docs/baRegistrationApplication.pdf. You will generally need to provide application material specifying what procedures you wish to perform, your license number, proof of your blood-borne pathogen training, who provided you with the training, and submit documentation of your vaccination status. The form will also require you to indicate the business location that you will be providing services at, a passport photo, and of course the necessary fee.
EDD – Hiring Employees
will your new tattoo shop have employees? Many tattoo shops use independent contractors and not employees. However, for certain types of roles, such as receptionist, or other administrative personnel, typically those roles are set up as employment relationships. If your tattoo shop is going to have employees, you will need to register with the California Employment Development Division (EDD) and register as a new employer in the state of California. It does not matter if your new California tattoo shop will have 1 employee or 100, you will still need to do this. California law requires a new business to register a new employee within 20 days of the employee being hired. If you do not follow all the laws and regulations of California’s labor and employment laws, the EDD will issue you numerous fines and penalties, which are actually quite expensive. Labor and employment noncompliance are the #1 reason why new California businesses get penalized and hit with a variety of monetary penalties. If you need help in this area, give us a call. It can be very confusing and complex to make monthly deposits with the state and federal government paying payroll taxes from employees, and then filing returns on a quarterly basis. Many new small business owners use a service to take care of these tasks for them to avoid missing deadlines are racking up penalties.
Independent Contractor Agreements
During the course of running your new tattoo shop, you will want to hire tattoo artists to come and work in your shop so that you can handle the volume of customers. Many tattoo shop owners do this on a handshake or verbal agreement. This is a horrible idea. Nearly all disputes between tattoo shop owners and tattoo artists who work in their shops, including apprentices, arise because there is insufficient documentation of the relationship between the parties, compensation structure, “ownership” of clients, protection for tattoo designs and idea theft, and of course, unfair competition. We strongly recommend all new tattoo shop owners not bring on tattoo artists without independent contractor agreements that cover these issues.
Go Out and Do What You Love!
If you have gotten through all the paperwork, forms, filings, and filing fees required by federal law, state law, and your local city/county, you will be ready to start your new tattoo shop. Congratulations! Opening a new shop is a dream for many tattoo artists, and if you are at that stage in your career, it is a sign that you have probably been working hard to bring your dream to a reality for many years. You deserve a pat on the back and admiration for your courage and determination in starting a self-supporting business and not relying on others. Every successful business begins when the business owner makes a brave decision to go out on their own, and a tattoo shop is no different.
Did you find this article useful? Axis Legal Counsel provides a variety of tips and helpful information for business owners all over California. Click on the below link to get added to our list and receive helpful information on legal and tax issues relevant to your business. You can opt out any time. No spam, we promise. And we never sell your email address to any third party advertisers.
If you need legal advice on any issue relevant to your new tattoo shop, give us a call. We offer free consultations to callers and consultations are no risk, no charge, and completely confidential. Obviously, this article should not be used as legal advice, because it deals with a variety of issues in very broad terms, and does not take your unique situation into account, including the requirements that may be required by your city or county, or other legal authorities.
AXIS Legal Counsel’s Business Practice provides legal advice to numerous small businesses with a variety of legal matters, including business formations, contracts, deals, and transactions, business administration, corporate governance, operations, risk management / insurance, labor/employment matters, intellectual property, healthcare, crisis management, directors/officers, private/data security, technology, statutory/legal compliance, and business litigation. AXIS represents businesses, corporations, LLCs, LLPS, partnerships, and startups in need of a corporate lawyer, for business legal matters as well as business litigation, such as disagreements, non-solicit agreements, non-competes, trade secrets, and other disputes with businesses. We are also experienced in providing assistance to business clients concerning business contracts, corporate formation matters, contracts and transactions, business litigation, business legal advice for Corporations, LLPs, LLCs, Partnerships, Small Business, Startups, and others involving corporate law.
If you are seeking a business lawyer, or for information on retaining AXIS Legal Counsel to represent your business in connection with any legal matter, contact [email protected] or call (213) 403-0130 for a confidential consultation.
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