How to Get a Business License in California

What Is a Business License?

A business license is a blanket term for any type of certification, license, or permit required to do business. These licenses are issued by state and local governments, but there are also federal licenses. Ultimately, the purpose of these licenses is to regulate businesses and collect taxes. It’s for this reason that you need a seller’s permit in most counties in California. These licenses are available for all types of businesses, and having one can help you look more professional to your clients.

Do You Need a Business License in California?

If you plan on doing business in California, there’s a good chance you need a business license. While California doesn’t usually require one at the state level unless you’re applying for something like a license to practice law. However, you’ll likely need a license to do business at the local level. In California, these are known as seller’s permits, and you have to apply for them in the city you plan on doing business in. For example, if you want to do business in Fresno, you’ll need a Fresno business license.

What Are the Requirements for a Business License in California?

You have to meet certain requirements if you want to apply for a business license in California. Also, you have to apply for these licenses at the city and county levels, so the information you provide might not always be the same. That said, you’ll usually need the following information:

The name of your business
Any fictitious names for your business
Where your business is located
Names and contact information for owners, partners, and management
The start date for your business
Social Security number of EIN
Description of your business’ services and products
Industry codes associated with your business
Sales tax number for your business
Professional or commercial certifications

Make sure you meet these requirements before you apply for a business license in California to prevent any unnecessary delays.

What Are the Types of Business Licenses in California?

There isn’t one type of business license that covers everything in California. Instead, you have to consider a few options that may be available. For example, you may need a federal license if you plan on selling firearms or tobacco, but you don’t need one if you’re selling clothing.

Understanding the types of licenses you need will help with the application process and ensure that you apply for the necessary licenses when the time comes. Learn more about the types of business licenses available in California below.

Local Business Licenses in California

The most common license that you’ll need to do business in California is a local business license. These are licenses issued by counties and cities to ensure that your business is being taxed properly. The most basic license is a general business license, which functions as a seller’s permit and allows the county to collect taxes. While you’ll need one for each county you plan on operating in, the process for applying is nearly identical in most counties. Therefore, you don’t have to worry about going through a complicated process every time you open a new location.

That said, there are also some more complex licenses that you may come across. For example, you may need to pass a public health inspection and obtain a public health license if you open a restaurant or a place that sells food and/or beverages. In fact, handlers of food products, like chefs, may also need certifications to work in your business. To add to this, zoning permits for the specific type of business you’re starting can also complicate the process, so keep this in mind.

California State Licenses

While less common than local licenses, California does have some state-level licenses that you may need. These are licenses for specific industries, so it’s not something that most businesses need, but something you should keep an eye on nonetheless.

A great example is the California Department of Alcoholic Beverage Control and the Department of Tax and Fee Administration. If you want to sell alcohol in California you have to be approved for a license by the California Department of Alcohol Beverage Control and pay a tax. This is also true for some other industries, so it’s important to consider the product you’re selling or the service you’re providing to see if you need extra licenses.

You may also need a state license that’s also a professional license if you plan on being a lawyer or working as a doctor. There are a handful of industries where state and professional licenses may blend.

Federal Licenses

State and local licenses are important, but sometimes you need a federal license if you want to do business in California. The need for a federal license depends on the industry you plan on entering, so they’re not something that everyone needs.

For example, you’ll need a federal license if you want to sell firearms, tobacco, or alcohol. These licenses are all separate but you’ll need to have one for each service you provide. Therefore, if you happen to sell alcohol, firearms, and tobacco, you’ll need a federal license for each industry.

Some other federal licenses you may need include:

Farming
Aviation
Ammunition and explosives
Wildlife and fish
Commercial fishing
Maritime transportation
Nuclear energy
Radio and TV broadcasting
Logistics
Transportation
Drilling and mining

There are dozens of federal licenses, so make sure you check with the government before going into business. The last thing you want is to be caught selling a product or service that requires a license without one; it will cost you.

Professional Business Licenses

In California, some professions are required to have a license by law. Therefore, depending on your profession you may need to apply for an additional license. California offers more than a dozen of these special licenses, so check the list below to see if your business falls into any of these categories:

Tramways and amusement rides
Animal services
Anything in professional athletics
Automotive services
Barbering
Cosmetology
Building, engineering, construction
Cemetery
Door-to-door sales
Education
Finance and accounting
Garment manufacturing
Healthcare services
Horse racing
Real estate
Security and investigative services
Legal services
Financial institutions

These are only some of the licenses you may need, so keep this in mind when you’re applying for a business license in California.

Applying for a business license can be done in about five steps. While these steps will vary based on the type of license you need, the process we cover below should apply to most types of businesses in California. To get a business license in California, follow the steps below.

Come Up with a Business Plan
Name Your Business
Choose a Legal Entity
Get a Federal Tax Identification Number
Apply for a California Business License
Apply for any Additional Business Licenses
Check Zoning Laws and Permits
Renew Your California Business License

Learn more about each part of the application process in detail below.

1. Come Up with a Business Plan

The first part of the process always needs to be a plan. If you don’t have a plan you don’t know where the business will take you or what industries you might enter. Plus, it can help you with the marketing, formation process, and much more.

Your business plan should also contain an Executive Summary that breaks down the overall goal and idea of your company. These plans are crucial for helping you identify permits, licenses, and other certifications you may need before you get started. Having a plan will make it a lot easier to get the necessary licenses you need and eliminate all of the guesswork you may encounter without a good plan.

Not only is a business plan an essential part of the process for identifying licenses you may need, but it’s also the first step for starting a business in California.

2. Name Your Business

The next part of the process is naming and forming your business. You’ll want to register your name with the California Secretary of State, and we recommend starting this process early by reserving your name. Doing so ensures that you can use the name when you start a business later – if you don’t plan on setting up shop right away. You should also check this registry to determine if the name is available.

Reserving the name of your business is only part of the process and a small one. You also have to check for any trademarks that have been used for your company’s name. Believe it or not, you can have the name registered, but if someone else has the trademark you likely can’t proceed.

It’s also important to consider your business’ expansion prospects, which is why we place a lot of emphasis on your business plan. Do you plan on growing and venturing into different states? If so, you should reserve your name in other states as well.

3. Choose a Legal Entity

Next, it’s time to form your business. If you want to apply for a business license you need to have a business first. While you don’t have to worry about too much paperwork and legal assistance for a sole proprietorship, partnerships, and other legal entities can become more complicated. For example, you may need to file Articles of Organization or Articles of Incorporation if you’re opening an LLC or corporation.

Therefore, it’s important to know what type of business you plan on forming before applying for any licenses. In fact, some business types might not require any licenses at all, so it’s important to know where you stand before you start filling out a bunch of paperwork.

The biggest question you need to answer is regarding legal structure. You have to determine if you want your business to be one of the following:

Sole proprietorship
Limited liability company (LLC)
Limited liability partnership (LLP)
General partnership
Corporation
Limited partnership

There are also unique types of businesses within each category. For example, you can have a series LLC or a single-member LLC because there are multiple options.

It’s also important to note that the process for starting each type of business can be different. Fortunately, we have about 7 steps that will help you start any type of business in California. That said, to quickly summarize them, you can start your business online using Bizfile Online. This is the Secretary of State’s program to help you file paperwork and form any type of business in California online. All you need is your purpose statement, details about yourself and the company, and any management details.

4. Get a Federal Tax Identification Number

Don’t worry, we’re almost to the business license application process, but there’s one more step you have to complete first. Before applying for a license you’ll need a tax identification number, which is known as an employer identification number (EIN).

You can apply for one through the IRS and the process is simple. Plus, it should only take a few minutes to provide the necessary information and it can all be done online. If you’re a freelancer or sole proprietor, you may be able to skip this step and use your Social Security number (SSN) instead.

While it’s possible to use your SSN, we still recommend applying for an EIN because it eliminates an extra step in the future if you plan on forming an LLC. Additionally, it can help you keep your finances separate.

5. Apply for a California Business License

Once you’ve completed the prerequisites that we covered, it’s time to apply for a business license. While formation may seem like enough, it’s not, and you need to apply for business licenses separately. Doing so ensures that you’re not missing anything important.

In California, you’ll need a business license in the county or city where you plan on operating. Once you’ve gathered everything you need you can start applying for a business license or a business tax certificate. To apply, we recommend checking the website of the city where you’ll do business.

You can also search using CalGold, which will help you with the details for license applications in the state. While it’s an easy database to use, it’s always necessary to check with the county before moving forward. For example, applying for a Sacramento business license might be different than applying for a Fresno business license.

Once you know what you need, you can provide the necessary information to obtain your business license. Typically, you’ll need to provide the following information:

Your full name and address
A valid form of identification, usually a license
Email address
Address and phone number for your bookkeeper and accountant
Information about members of the company
Contact information for the registered agent or the person who will handle record-keeping
References
EIN or Social Security number
California Secretary of State Entity number

Depending on the county, you may need to provide additional information. The specific type of company can also play a role in the information you need to provide.

6. Apply for any Additional Business Licenses

You’ll find that some industries require additional licenses. Therefore, you may need to apply for more than one business license. Take some time to understand your industry for licensing requirements and reach out to state, local, and federal authorities to ensure that you have everything you need before you get started.

Some additional licenses you may need can be federal, professional, and even state-wide licenses, so taking the necessary time to apply for all of them is important. You may also need multiple licenses, so don’t think that because you have one, you’re all set. Always check with your local authorities to see what licenses you need.

7. Check Zoning Laws and Permits

Before you start your business it’s important to consider any additional permits you may need. Typically, you’ll need additional permits at the county level, so make sure you visit the county’s website to learn about any additional permits you may need. Some examples include:

Land usage permits
Zoning permits
Building permits
Fire department permits

You may also need unique permits depending on the type of business you plan on running. For example, you may need a unique zoning permit to remove or store hazardous waste materials.

8. Renew Your Business License

In some industries, you have to renew your business license. A great example is a contractor’s license that’s issued by the Contractor’s State License Board (CSLB). In these cases, your license will expire and you’ll have to renew it. The CSLB will send you a reminder but it’s your responsibility to fill out the form and process the renewal.

Thankfully, renewals are easier than applying for a license, so you don’t have to go through the entire process again. Just make sure you have the necessary paperwork from your provider and you should have no problem renewing your license. Depending on the license, this may come with a few that you have to pay as well.

How Much Does a Business License Cost in California?

The cost of a business license can be as low as $15 and as high as $100,000 depending on the size and location of the company. Most counties have a filing fee of $15-$30, which is where the cost might stop for some small businesses. However, some large LLCs and corporations will have to spend an amount that’s based on the company’s projected revenue. There is usually a formula for this based on the location and type of company. We can also help you learn more about how much it costs to get a business license in California.

Aside from licenses, you may also have to pay for permits. Some permits can cost hundreds, especially for complicated industries like waste management.

How Long Does It Take to Get a Business License in California?

The process to get a business license can take a few days or up to 45 days. This is how long the process can take at the local level but state and federal licenses might take even longer. It’s important to start the process sooner rather than later to avoid any delays.

We also have plenty of information about how long it takes to get a business license in California, so you don’t have to wait alone. Plus, we can help you solve any obstacles and prevent delays. As long as you’re proactive, you shouldn’t have to wait too long.

California Business License FAQ

Have more questions about how to get a business license in California? We have answers below.

Do I Need a Business License to Be Self-Employed in California?

Whether or not you need a license to be self-employed in California depends on your industry. If you’re a writer or graphic designer, there’s a good chance that you can make it without a license. Still, having a license will always add more professionalism to your operation and ensure that taxes are handled properly.

On the other hand, if you’re freelancing as an accountant or someone in financial services, yes, you’ll need a license if you’re self-employed. Therefore, it comes down to the industry.

Can I Start a Business Without Registering it in California?

Yes, you can start a business without registering it in California. It’s not something that’s required for people who are self-employed or sole proprietors unless they’re in an industry where some type of license is required – like a professional license. However, it’s still a good idea to register your business because it can help you legitimize your company.

It’s also important to note that LLCs, LLPs, and other legal entities may be required. You can learn more about businesses that have to register on CA.gov.

Do You Need a License for an Online Business in California?

Yes, you need a license for an online business in California. While it may seem like you don’t, you need to register your online business and pay tax on the revenue that you generate. This applies to e-commerce stores and most types of online businesses. If you’re operating the online business from your home you may also need a permit and can’t have employees who don’t live in your home working in your home. There are some other requirements for online businesses, but the important part is knowing what you need for your industry.

Can You Apply for a Business License Online in California?

You can apply for a business license online by visiting the state’s directory for that service. This will work for general licenses, seller’s permits, and most license types. However, you may have to apply for some federal and local licenses by email or mail. Also, some counties in California may not have online services, so you may face additional roadblocks.

If you can apply for a business license online in your area, the process is almost identical to doing it by mail or in person. You have to fill out the necessary information, meet the requirements, and submit the form online.

Apply for a Business License in California

Business licenses are an important part of doing business in California. Without a license, you run the risk of getting into trouble with state, local, and even the federal government. Failing to have a license can result in you being liable for lawsuits and may result in your business being forced to cease operations. Unfortunately, it can also result in legal penalties like fines, late fees, and additional tax obligations. For these reasons, it’s always important to have a business license in California.

While going without a license is risky, the process for applying for one isn’t complicated. As long as you follow the steps that we covered in this article, you shouldn’t have any issues getting a business license in California. Make sure your business is licensed today and start serving your partners with confidence today!