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2. CHECKLIST

The following is a checklist of steps for creating a private equity firm or fund in California. The list is not necessarily complete, chronological, or fully applicable to your new entity. Some items are mandatory and others are optional. For more information, see the indicated section in this publication and consult with professional advisers.

No.	Action Item	Due Date	Section of Guide
1	name your company or fund		3(a)
2	choose the type of entity		3(b)
3	if a corporation, consider "close corporation" status		3(b)
4	choose the location for the entity to organize		3(c)
5	register with the Secretary of State in the chosen location		3(d)
6	register to do business in California, if organized elsewhere	prior to transacting intrastate business in California	3(d)
7	register the DBA at the county level; publish in local newspaper	within 40 days after starting to transact business	3(d)
8	get city or county business license	(varies)	3(d)
9	get permits and licenses	(varies)	3(d)
10	file first annual report in California	within 90 days of filing the articles	3(d)
11	when creating a fund: • execute non-disclosure agreements • distribute private placement memoranda • review investor questionnaires • execute subscription agreements • execute investor side letters, if any		3(e)
12	purchase company binder from vendor		3(e)
13	execute governing document (bylaws or owners' agreement)		3(e)
14	hold first meeting of shareholders; execute minutes and resolutions		3(e)
15	hold first meeting of directors; execute minutes and resolutions		3(e)
16	issue ownership certificates, if desired		3(e)
17	draft business plan		3(e)
18	execute office lease	prior to moving into office	4(a)
19	obtain office equipment and furnishings		4(a)
20	execute consultant and employment agreements		4(b)
21	create and distribute personnel handbook		4(b)
22	if your company has employees: • verify residency status • register with California Employment Development Department • post legal notices in office • distribute pamphlets • obtain workers compensation insurance • report new hires (including independent contractors) • submit payroll tax deposits • file quarterly wage and withholding reports • file annual reconciliation statements	register within 15 days after paying $100 in wages in a quarter; report new hires within 20 days	4(b)
23	fulfill contractual and fiduciary duties to investors		4(c)
24	obtain business insurance		4(d)
25	execute non-disclosure agreements with potential business partners	prior to disclosure of trade secrets	4(e)
26	create logo for your company		4(e)
27	create website and email accounts		4(e)
28	create letterhead, business cards, and other marketing materials		4(e)
29	file trademark applications with state or federal agencies		4(e)
30	execute agreements with lenders or investors		5(a)
31	file securities notices with state and federal agencies	within 15 days of the first sale of securities in each jurisdiction, in the case of "Reg D" exemptions (other exemptions may have different requirements)	5(a)
32	obtain taxpayer I.D. numbers from state and federal agencies		5(b)
33	open bank accounts; get checks, debit cards, and credit cards		5(b)
34	set up financial books and records (purchase software, if desired)		5(b)
35	create systems for compensating personnel		5(c)
36	elect "S corporation" status, if desired	within two months and 15 days after the start of the tax year	5(d)
37	file tax forms	(consult with CPA)	5(d)
38	plan distributions to owners and profit participants		5(e)