There are various factors that influence the cost of a business license in California. Generally speaking, you’ll have to spend anywhere between $50 to several hundred dollars.
If you’re a small business, the final cost may be on the lower end. Plus, you may have to get additional licenses and permits depending on the nature of your business, which can drive the cost up.
In this article, we will explain how much a business license in California is. You’ll also learn some other things about business licenses and permits in the state.
How Much Is a Business License in California
Contents
How Much Does It Cost to Get a Business License in California?
The Business License Cost in California may include a percentage of your annual gross receipts. The final amount depends on various factors, including:
- The type of business you’re running
- The location of your business
- The size of your business
- The number of your employees
- The annual revenue of your business
For example, if your business is based in Nevada City, the cost of the business license depends on the number of full-time and part-time employees. You can choose either a one-year or a three-year license, with the latter offering a 5% discount.
If the name of your business doesn’t include your name, you’ll have to file a fictitious business name (FBN), which can cost around $30. Businesses involved in selling goods need a seller’s permit. Fortunately, you can get one for free in California.
You’ll also have to obtain additional permits depending on the industry in which your business operates. For example, an advertising agency in Sacramento may need a “home occupation permit” if it’s being run out of a home.
How Much Does a Small Business License Cost in California?
Small businesses may be exempt from high fees and may only be required to pay as little as $50. The final cost will vary based on factors like your location and annual revenue, but in most cases, small businesses have to pay a flat fee instead of an annual one like larger businesses do.
What Do I Need to Get a California Business License?
To get a business license in California, you typically must provide the following things:
- Social Security Number if your business is a Sole Proprietorship
- Federal Employment Identification Number (EIN) if your business is a corporation or limited liability company (LLC)
- The description of your business activities
- The start date of your business
- Your business’s contact information
- The address of your business
This list isn’t comprehensive, and depending on where in California your business is based, you may have to submit more information.
Once you’ve provided all the required documents, you’ll have to pay the fee. Most cities in California now allow you to complete the entire process online. How long does it take to get a business license in California? That depends on various factors, but you can expect to receive it within 45 days.
How Long Does a California Business License Last?
The duration of a business license in California will depend on the city or county where you obtained it. Most cities/counties give you a yearly license, which means it has to be renewed annually.
Who Needs a Business License in California
Any individual or organization conducting business in California must obtain a business license. Apply before launching to avoid legal issues.
All entities, including sole proprietors, LLCs, corporations, and partnerships, must apply for a business license in California.
Do I Need a Business License to Sell Online in California?
If it’s a one-time thing, you won’t need a business license to sell online in California. However, if it turns into a regular activity, then you will need a seller’s permit. According to the California Department of Tax and Fee Administration (CDTFA), you only need a seller’s permit if you make more than three sales in a 12-month period.
Start Your Business in California
To run a business in California, you need a general business license and a seller’s permit. In most cities and counties, you can apply for the license online. Depending on what type of business you’re running, you may have to apply for additional licenses and permits.
The cost of a business license depends on factors such as the industry you’re operating in, the size of your business, the number of employees your business has, and your business’s annual revenue. In most cases, the total cost will range from $50 to several hundred dollars.