§ 28047 Small Business Definition

Corporations Code·California

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Key Takeaways

•A small business in California must work regularly and not just sometimes.
•The business and its partners must have a total net worth of $18 million or less.
•The business must have made $6 million or less in profit (after taxes) each year for the last two years.

Example

A family-owned bakery in California that has been running for 5 years.

If the bakery and its owners have saved up $15 million total and made $5 million in profit last year and $4 million the year before, it counts as a small business under this law.

AI-generated — May contain errors. Not legal advice. Always verify source.

Official Source

View on CA.gov

§ 28047 Small Business Definition

“Small business firm” means a person that proposes to transact, or transacts, business on a regular and continuous basis in California and, together with its affiliates, has a net worth of not more than eighteen million dollars ($18,000,000) and average net income after federal income taxes, excluding any carryover losses, for the preceding two years no greater than six million dollars ($6,000,000). (Amended by Stats. 2010, Ch. 516, Sec. 2. (SB 1155) Effective January 1, 2011.)

Last verified: January 23, 2026

Key Terms

small business firm net worth average net income affiliates

References

Official text at leginfo.legislature.ca.gov
California Legislature. Corporations Code. Section 28047.

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Key Takeaways

Example

Key Terms

Related Statutes

References