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What Is a Business Under California Law?

Is this lack of a consistent definition problematic?

By Chris Micheli, September 26, 2022 6:25 am

One of the key principles in legislative drafting is consistency in language, including definitions. In looking at who is a business, there lacks the same definition across state law. In fact, California law provides dozens of different definitions of “business” throughout the Codes. Is this lack of a consistent definition problematic?

It could be, but it emphasizes the point that some terms are limited to their use in an individual Code (there are 29 of them in California), or even in a particular subset of a code (e.g., division, title, chapter, etc.). The following is a sampling of different definitions of “business” found in different Codes:

Health and Safety Code Section 25110.5 – “Business” means the conduct of activity and is not limited to a commercial or proprietary activity.

Streets and Highways Code Section 36507 – “Business” means all types of businesses and includes financial institutions and professions.

Streets and Highways Code Section 36607 – “Business” means all types of businesses and includes financial institutions and professions.

Streets and Highways Code Section 227.1 – “Business” means a for-profit enterprise having a net worth of not more than six million dollars.

Civil Code Section 1798.80 – “Business” means a sole proprietorship, partnership, corporation, association, or other group, however organized.

Labor Code Section 350 – “Business” means any business establishment or enterprise.

Public Resources Code Section 42649.8 – “Business” means a commercial or public entity, including, but not limited to, a firm, partnership, proprietorship.

Civil Code Section 1798.98 – “Business” means a sole proprietorship, partnership, corporation, association, or other group, however organized.

Penal Code Section 1536.5 – “Business” means an entity, sole proprietorship, partnership, or corporation operating legally in the State of California, that sells, leases, distributes, creates, or otherwise offers products or services to customers.

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