What to Know About Getting a Business License in California

California’s thriving economy attracts hundreds of aspiring entrepreneurs to its shoes. With a gross domestic product of $3.9 million, it’s no surprise that around 4.25 million small businesses have opened in the Golden State. 

Whether you’re planning on opening a food truck or launching a new tech startup, California offers many new opportunities to explore. But before you start operating, you must fulfill certain requirements, like obtaining a business license.

Getting a business license in California is easy and relatively straightforward. It only involves a few key steps and can be completed in a few days.

Depending on the nature of your business, you may need more than one or two licenses. But there’s no need to worry. Our guide is comprehensive and covers everything you need to know, ensuring you’re fully prepared for the licensing process.

Do I Need A Business License in California?

California does not issue general business licenses. The only statewide licensing it provides are sales-and-use permits.

The California Department of Tax and Fee Administration (CDTFA) regulates sales-and-use or seller’s permits, which is the primary license required for selling products subject to sales taxes.

In addition to these permits, you will likely need to obtain the following licenses to do business in California:

Local Licenses & Permits

There are four additional local licenses you may need to start your operations:

• Business Tax Certificate: This permit will allow you to conduct business within your county or city. It works similarly to a seller’s permit.
• Zoning/Land Use Clearance: You must get a zoning permit if the land you want to use for your business is not properly zoned for the activities you want to conduct.
• Building Permit: You’ll need a building permit to build a new building or renovate an existing one for your business.
• Fire Department Permits: These permits are issued to businesses that use flammable materials and are public-facing, such as restaurants, hotels, or retirement homes.

All four local licenses are issued at the city or county level.

Professional Licenses

The following professionals are required to obtain industry-specific licenses before they can offer services to the public:

• Attorneys.
• Accountants.
• Private investigators.
• Engineers and architects.
• Cosmetologists and barbers.
• Medical and healthcare professionals.
• Real estate brokers, agents, and salespersons.
• Contractors and other construction-related occupations.

Federal Licenses & Permits

You may need federal licenses and permits, depending on the size or the activities your business wants to conduct. Common industries that require federal licensing include:

• Agriculture.
• Alcoholic sales, serving, distribution, or importing.
• Aviation.
• Firearms, ammunition, and explosives.
• Fish and wildlife.
• Commercial fisheries.
• Maritime transportation.
• Mining and drilling.
• Nuclear energy.
• Radio and television broadcasting.
• Transportation.

How Do I Obtain a California Business License?

Here’s how you can obtain a California business license in five steps:

Form your business.

If you haven’t formed your business yet, now’s the right time to do it. You must establish your venture first before you obtain a California business license.

California’s formation processes vary from one entity to another. To form an LLC, you must file articles of organization with the Secretary of the State and pay the $70 filing fee. In contrast, you must create a partnership agreement to start a partnership.

Once you’ve officially established your business, you can start working on your licenses and permits.

Identify all the licenses and permits you’ll need.

To streamline the process, we recommend you list all the California business licenses and permits you’ll need. You can visit the CalGold website to check which state and local permits apply to your business.

On the website, you’ll be asked to select your city and county and the nature of your business. Afterward, it will list all the licensing you need and their respective issuing agencies. You can use this as a checklist to ensure you won’t miss any important requirements.

Gather your requirements.

Different licenses have different requirements, but generally, you’ll need to provide the following information when filling out applications:

• Your business’s name.
• Your business’s formation documents.
• Your business’s date of formation.
• Your business’s primary address.
• Your business’s Employer Identification Number (EIN).
• Your business bank account.
• The name and contact information of your business’s registered agent. 

If you’re applying for a professional license, you must provide additional documentation proving that you’ve completed the necessary education and apprenticeship hours. Examples of this include transcripts and certifications.

Get your seller’s permit.

The CDTFA has made obtaining a seller’s permit easier by introducing an online registration feature on its website. The system will guide you through the free registration, ensuring you complete all its requirements.

Obtain your other licenses.

As mentioned earlier, there may be other licenses and permits that you’ll need. Use the list from CalGold to identify which websites you must visit or numbers you must call.

Apply for federal licenses.

Lastly, you must apply for any federal licenses required for your specific industry.

How Much is A Business License in California?

The cost of a business license in California can vary depending on the locality. They can be as low as $15 to $30 and as high as a couple hundred dollars. Some counties even exempt smaller businesses from paying filing fees when obtaining their licenses.

Since most California business licenses are renewed annually, these fees should be paid yearly.

It’s also worth noting that you may be charged depending on a percentage of your annual revenue and number of employees instead of a flat fee. This situation is highly common among larger businesses.

Get Help Obtaining Your California Business License

You’ll get your California business license in no time by following the steps we’ve discussed.

If you need assistance completing your permits, don’t hesitate to contact Inc Authority.

At Inc Authority, we offer free LLC formation services to entrepreneurs nationwide. Our team of business specialists will assist you in getting all the licenses and permits you need to operate legally in California free of charge.

We’ll waive all our overhead fees and service charges, so you’ll only have to worry about the state filing fees.

To learn more about our free LLCs, visit our website here.