How to Start a Travel Agency in California: Seller of Travel Registration, $100 a Location and Trust Accounts

If you plan to sell flights, cruises, hotel packages or tours to California customers, learn one state law before you take your first booking. California regulates sellers of travel under Business and Professions Code 17550 and following. The registration is handled by the Consumer Protection Section of the California Attorney General's office, not the Secretary of State. Many new owners assume that forming an LLC and getting a business license covers them. It does not. This guide walks through the requirements in the order you will meet them, with the figures from the statute and the agencies.

Disclaimer: This article is informational content, not legal or tax advice. Laws, fees and agency procedures change. Confirm current requirements with the California Attorney General, the Secretary of State, the CDTFA and the Franchise Tax Board, and consult a qualified California attorney or CPA about your situation.

Materials and Information You Need Before You Start

Gather these items before you file anything. A missing item can delay a registration.

• A legal entity. Most agencies use an LLC or a corporation. An LLC files Articles of Organization (Form LLC-1) for $70. A stock corporation files Articles of Incorporation for $100. California does not allow a domestic series LLC.
• A name check and reservation. An LLC name can be reserved for $10 for 60 days, through the Secretary of State's name availability search. Your name must include 'limited liability company,' 'L.L.C.' or 'LLC' if you form an LLC, and it may not contain words such as 'bank,' 'trust,' 'incorporated' or 'corporation.'
• A California agent for service of process. The entity must name an individual who lives in California or a corporation that holds a Corporations Code 1505 certificate. An LLC must also keep an office in California, which does not have to be a place where business activity happens.
• A dedicated bank account for trust funds. You will need a federally insured bank, savings and loan or credit union that will hold customer money in a trust account. Ask the bank in advance whether it will open a trust account and what paperwork it requires.
• Your business plan for each location. Registration fees are charged per location, so list every office, kiosk or storefront from which you will operate.
• Draft customer documents. Prepare your disclosure packet, cancellation terms, refund policy and booking contract before you accept money.
• Carrier and provider agreements. Know which airlines, cruise lines, hotels and tour operators you will book with, and how they handle payment and refunds.

Step 1: Confirm That You Are a Seller of Travel

Under Business and Professions Code 17550.1(a), a seller of travel is a person who sells, provides, furnishes, contracts for, arranges, or advertises that they can arrange, air or sea transportation (no dollar minimum applies), or land or water vessel transportation other than sea carriage when the total charge to the passenger exceeds $300. The definition reaches traditional travel agencies, online travel agencies and tour companies that arrange transportation they do not operate themselves.

The law excludes some businesses. Air carriers and ocean carriers are not sellers of travel. A hotel that arranges transportation for its registered guests is excluded if it is not paid for that service. A motor or rail carrier or vessel operator that holds its own required permit or authority is also excluded under 17550.1(b).

Do not assume you are exempt because you sell tours rather than airfare. A tour company that arranges air or sea transportation, or other land or water vessel transportation for more than $300 per passenger, is a seller of travel. The registration requirement applies to you.

Step 2: Register With the California Attorney General

Under Business and Professions Code 17550.20, you must file for registration at least 10 days before you do business in California. The filing fee is $100 for each location from which the business operates. A late fee of $5 per day applies, up to $500.

You are treated as doing business in California if you solicit business from locations in California or solicit buyers located in California, no matter where your office sits. A remote agency that markets to Californians through its website or social media is covered.

Your registration is valid for one year and must be renewed annually, with the same filing fee. After registration, you have ongoing reporting duties:

• File a material change in your registration information with the Attorney General within 10 days.
• Give 10 days' advance notice before a sale or transfer of an interest in the business.
• Pay any assessment owed to the Travel Consumer Restitution Corporation. The assessment amount is not stated here, so check with the Attorney General before you file.

Search the Attorney General's website for the seller of travel registration page and its current forms. Do not rely on a third-party filing service without confirming that the service submits to the Attorney General directly.

Step 3: Set Up the Trust Account

The trust account is the core consumer protection in California's seller of travel law. Under Business and Professions Code 17550.15(b), you must deposit 100 percent of all sums received from customers, in any form, plus any carrier or provider refunds, into a trust account at a federally insured bank, savings and loan or credit union.

Money can leave the trust account only for purposes the statute allows. Under 17550.15(c), these include paying the carrier or provider, paying through the Airlines Reporting Corporation, and taking your own commission once all tickets or vouchers have been delivered or the provider has been paid in full.

California does provide narrow exemptions from the trust account rule. They carry several conditions, including a required period of operating under the same ownership, often cited as three years. A new agency should plan to maintain a trust account from day one and check with the Attorney General before assuming any exemption applies.

Step 4: Prepare the Required Disclosures

Under Business and Professions Code 17550.13, you must give customers written materials before or at the time you take any money. The materials must include:

• Your name, address and phone number.
• The total price, the amount paid, the future payment dates and the itemized balance.
• The carrier or provider and the departure details.
• All terms, including cancellation terms.
• The refund statement.
• A notice that California law requires certain sellers of travel to have a trust account or bond, stating which of these your business has.

Keep signed or dated copies of these materials in each customer file. If a dispute arises, these records are often the first thing an investigator asks for.

Step 5: Handle Refunds Correctly

Under Business and Professions Code 17550.14, money for services you do not provide must be returned within the earlier of two deadlines. The first is 30 days from the scheduled departure, the customer's refund request or your cancellation, whichever comes first. The second is 3 days from the day you first cannot provide the services.

Write your refund policy so that your staff can apply these deadlines without guessing. Track each refund request with a date, and confirm the carrier or provider refund has reached your trust account before you pay the customer.

Step 6: Understand the Penalties

Under Business and Professions Code 17550.19, a violation is a misdemeanor punishable by a fine of up to $10,000, up to one year in county jail, or both, for each violation. Violations of the refund or trust account rules can be charged as a felony if they reach $2,350 within 12 months, or if more than $950 is involved from one passenger. A felony conviction carries fines of up to $25,000.

Compliance is cheaper than enforcement. Keep your trust account reconciled monthly, calendar your renewal date, and treat any change in ownership or address as a filing deadline.

Step 7: Complete the General Business Setup

Registration with the Attorney General does not replace the standard business setup. Handle these steps alongside your seller of travel filing.

File your entity and calendar the reports

An LLC files a Statement of Information (Form LLC-12) for $20 within 90 days of filing the articles, then every two years during the six-month window ending on the last day of the anniversary month. A corporation files a Statement of Information (Form SI-550) for $25 within 90 days, then every year. The Franchise Tax Board assesses a $250 penalty if an LLC misses the report after a Secretary of State notice. Every LLC organized or registered in 2024 through 2026 owes the $800 minimum annual franchise tax from its first year. If your LLC's first taxable year begins in 2027 through 2029, confirm the first-year amount with the Franchise Tax Board, since the rules may differ. The Secretary of State's Business Programs Division lists current filing requirements, and you can file online through bizFile Online.

Register a fictitious business name if you need one

If your agency operates under a name other than your legal name, file a Fictitious Business Name Statement with the county clerk-recorder in the county of your principal place of business. If you have no California location, file in Sacramento County. The statutory fee is $10 plus $2 per additional name or owner, but counties charge more, and newspaper publication is a separate cost. You must file within 40 days of starting business, publish the statement in a newspaper once a week for four weeks, and renew after five years. The fictitious business name guidance explains the process.

Address sales tax only if you sell taxable goods

Travel services and merchandise are treated differently for tax purposes. If you sell taxable goods, such as luggage, guidebooks or travel accessories, register with the California Department of Tax and Fee Administration (CDTFA) for a seller's permit. The permit is free, and the CDTFA's website covers reporting. The statewide base rate is 7.25%, and city rates with district taxes run from 7.25% to 11.75%. The resale certificate has no required form. Confirm with the CDTFA whether your specific services are taxable.

Register with the EDD if you hire staff

If you have employees, register with the Employment Development Department for payroll tax accounts. Confirm the current registration steps and wage rules with the EDD.

Check the local business tax

California has no general statewide business license. The Secretary of State issues no licenses or permits, and the seller's permit is not a business license. However, 445 of California's 483 cities collect a local business tax or registration certificate. There is no common formula, so call your city's finance or revenue office. Counties license only regulated activities. A business license alone, from any level of government, is not enough to sell travel. The Attorney General registration is still required.

Tips for a Smooth Launch

• File the Attorney General registration early. The 10-day rule is a minimum. Build in time for questions, corrections and the trust account setup.
• Register each location. A second office or a seasonal kiosk carries its own $100 filing fee.
• Keep the trust account separate. Never pay operating expenses, payroll or your own draws from it except for the purposes the statute allows.
• Ask about the bond option. The main protection California requires is the trust account, but you should check with the Attorney General about whether a bond can be used in your situation. This guide does not provide bond prices, and bond costs vary by provider.
• Use the California Small Business Development Center network. Local SBDC advisors can review your plan at no cost, though they do not provide legal advice.

Common Mistakes to Avoid

• Assuming a business license covers travel sales. It does not. The Attorney General registration is a separate requirement.
• Believing you are exempt because you sell tours. Tour companies that arrange air or sea transportation, or other transportation over $300 per passenger, are sellers of travel.
• Treating the trust account as optional. Exemptions are narrow and conditional. A new agency should expect to run a trust account.
• Using incomplete disclosures. Every item in the Step 4 list must appear in writing before you collect money.
• Missing the refund deadlines. The clock can start on a cancellation or a refund request, not on the date your staff gets around to processing it.
• Forgetting the 10-day change notice. A new officer, address or ownership change must be reported to the Attorney General on time.
• Ignoring the annual renewal. Registration lasts one year, and a lapse leaves the business exposed to penalties.

What Results to Expect

Agencies that follow this sequence often find that the regulatory setup is manageable, but it is not quick or casual. The most likely outcome is a compliant business with a clear paper trail: a registration on file for each location, a trust account that receives customer funds, written disclosures for each booking, and a refund process that meets the statutory deadlines. Results vary with the size of the business, the number of locations and how quickly paperwork is returned. Plan for a delay of several weeks before you can take bookings, and do not accept customer money until your registration and trust account are in place.

Because the penalties for violations are significant, the most useful result you can aim for is a business that never has to explain a missed trust deposit or a late refund to an investigator.

When to Talk to a Professional

A travel business with multiple locations, online sales from other states, a cross-border tour product, or any question about the trust account exemption or the bond option should involve a qualified California attorney. A CPA can advise on the franchise tax, sales tax and entity choice. The Attorney General's office can answer questions about registration requirements, and the Secretary of State's business programs staff can answer questions about entity filings.

Frequently Asked Questions

Is there a California travel agent license?

California does not issue a general travel agent license under that name. The core requirement for selling transportation is registration as a seller of travel with the Attorney General, plus compliance with the trust account, disclosure and refund rules described above.

Do I need a bond instead of a trust account?

The main protection California requires is the trust account. Check with the Attorney General about whether a bond is an option for your business and what it would require.

How much does it cost to start?

The government fees in this guide include $70 for an LLC's articles, $100 for a corporation's articles, $10 for an LLC name reservation, $100 per location for Attorney General registration, and the statement of information fees. Your bank, bond, insurance, software and marketing costs are separate and vary. This guide does not state those costs.