How to Start a Bakery in California

October 29, 2026

Starting a bakery in California comes down to two paths. The first is a cottage food bakery run from your home kitchen under state law. The second is a commercial bakery operating in a county-permitted food facility. Most first-time bakers should start with cottage food because it has lower upfront costs and a shorter path to selling. Move to a commercial bakery when you need a storefront, wholesale accounts, or products that cottage food does not allow. This guide covers both paths in that order, with the agencies, fees, and deadlines you need to plan around.

Disclaimer: This article is informational content, not legal or tax advice. Rules change, and county requirements vary. Confirm details with the agency named in each step, and consult a qualified attorney or CPA before you form an entity, sign a lease, or make a tax decision.

California Has No Bakery License, So Know What You Actually Need

There is no general California bakery license. The Secretary of State issues no business licenses or permits, and the seller’s permit from the California Department of Tax and Fee Administration (CDTFA) is not a business license. A bakery typically needs the following pieces:

• A registered legal entity with the Secretary of State, if you form an LLC or corporation.
• A county registration or permit for cottage food, or a county food facility permit for a commercial bakery.
• A CDTFA seller’s permit if you make taxable sales. The permit is free.
• An Employment Development Department (EDD) registration once you have employees.
• A city business tax or registration certificate, which most California cities charge.
• Food handler and food safety certifications for staff, as described below.

Path One: Start a Cottage Food Bakery From Home

Cottage food lets you sell certain non-potentially-hazardous baked goods made in your home kitchen. Before you start, gather:

• A product list limited to items that qualify (see Step 1)
• A kitchen you control and can keep clean
• A kitchen scale, recipe cards, and a sales log to track revenue against the annual cap
• Labels that meet state rules
• A food processor training certificate for the person who prepares or packages the food

Step 1: Confirm Your Products Qualify

Allowed products are non-potentially-hazardous foods such as breads, biscuits, churros, cookies, pastries, and tortillas without cream, custard, or meat fillings. Fruit pies, granola, and similar items on the CDPH list also qualify. Cream cheese frosting, custard-filled pastries, and cheesecake are not on that list. If one of those is your signature item, plan to make it in a commercial kitchen.

Step 2: Choose Class A or Class B

Feature	Class A	Class B
Local requirement	County registration with a self-certification checklist	County permit after an initial inspection
Routine inspection	None	At most one inspection per year
Allowed sales	Direct sales only: home, farmers’ markets, or online with mail or delivery	Direct sales plus indirect sales to shops, cafes, and restaurants
2026 annual sales cap	$88,878	$177,756

Both caps are adjusted for inflation each January, so confirm the current figures with CDPH or your county before you plan a year of revenue. If you plan to sell to a coffee shop, restaurant, or grocery store, you need Class B. If your sales come from farmers’ markets and your own website, Class A may be enough.

Step 3: Register or Apply With Your County

Contact the environmental health division of your county. One county registration or permit is valid statewide, so you do not need a separate one for each county where you sell. Fees differ by county. For example, San Diego County charges $231 to register and $92 to renew for Class A, and $526 and $361 for Class B in 2026-27. Get your county’s current fee schedule before you build a budget.

Step 4: Complete Food Processor Training

Complete a CDPH-approved food processor course of four hours or less within three months of registering, then repeat it every three years. The course is for the person who prepares or packages the food, not for every household member who helps out. The statute does not set a price, so compare providers before you enroll.

Step 5: Label Every Product Correctly

Under Health and Safety Code 114365.2(e), your cottage food label must include:

• The statement “Made in a Home Kitchen” in 12-point type on the primary display panel
• The product name
• Your name as the operator
• Your county registration or permit number
• Ingredients listed in descending order by weight
• Federal allergen labeling

State law does not require a business address or a Best By date on the label. You may still add them if you want to.

Step 6: Stay Within Staffing and Sales Limits

A cottage food operation may have one non-family full-time-equivalent employee. Track sales monthly so you know where you stand against the cap. If your sales are growing toward the limit, plan the move to a commercial kitchen before you exceed it, not after.

Path Two: Open a Commercial Bakery

A commercial bakery operates in a leased or owned space that meets county health rules. It has no sales caps, but it involves more filings, plan review, and inspections. The sequence below is the order most bakeries follow.

Step 1: Form Your Business Entity

For an LLC, file Articles of Organization (Form LLC-1) with the Secretary of State through bizfile Online at https://bizfileonline.sos.ca.gov/. The filing fee is $70. Online filings are normally processed within about 5 business days or less, and paper filings take 10 or more business days. Expedited options are $350 for 24-hour service, $750 for same-day service if received by 9:30 a.m., and $500 for 4-hour drop-off service that is precleared.

Your LLC name must contain “limited liability company,” “L.L.C.,” or “LLC.” “Limited” may be shortened to “Ltd.” and “company” to “Co.” The name cannot contain “bank,” “trust,” “trustee,” “incorporated,” “inc.,” “corporation,” or “corp.” You can reserve a name for $10 for 60 days. Search availability first at https://bizfileonline.sos.ca.gov/search/business.

A corporation files Articles of Incorporation for $100. An LLC or corporation must keep an agent for service of process in California. That agent is either an individual who lives in California or a corporation holding the required certificate. An LLC must also keep an office in California. California does not allow domestic series LLCs. The Secretary of State’s business programs page is https://www.sos.ca.gov/business-programs.

Step 2: Plan for the LLC Franchise Tax

Every LLC organized or registered in 2024 through 2026 owes the $800 minimum annual franchise tax from its first year. An LLC whose first taxable year begins in 2027, 2028, or 2029 pays $400 in year one under RTC 17941(g)(2), so confirm the first-year amount with the Franchise Tax Board (FTB). The LLC fee of $900, $2,500, $6,000, or $11,790 applies once California-source total income reaches $250,000, $500,000, $1,000,000, or $5,000,000. A newly incorporated or qualified corporation or S corporation owes no $800 minimum in its first taxable year. Compare entity types with your CPA before you choose.

Step 3: Get a Federal EIN and a Fictitious Business Name, If Needed

Apply for a federal Employer Identification Number (EIN) with the IRS. You need it for banking, payroll, and tax filings. If you will operate under a name other than your LLC or legal name, such as “Maple Street Bakery,” file a Fictitious Business Name Statement with the county clerk-recorder in the county of your principal place of business. File it within 40 days of starting. The statutory fee is $10 plus $2 per additional name or owner, but counties charge more. For example, Tehama County charges $31 plus $5 for each additional name. You must also publish the statement in a newspaper once a week for four weeks, and that fee is separate. The name expires after five years. Details are at https://www.sos.ca.gov/business-programs/business-entities/fictitious-business-names.

Step 4: Register for a Seller’s Permit

Register with CDTFA at https://www.cdtfa.ca.gov/ for a seller’s permit if you make taxable sales. The permit is free. The statewide base sales tax rate is 7.25%, and with district taxes, city rates run from 7.25% to 11.75%. When you buy ingredients or packaging for resale, you can give your supplier a resale certificate. California does not require a specific form.

Bread and bakery goods sold to take home are generally exempt from sales tax. Baked goods eaten on the premises, served at tables or counters, sold as hot prepared food, or sold by a seller that meets the 80-80 test are taxable under Revenue and Taxation Code 6359(d). Check CDTFA Regulation 1603 before you assume any category of sale is exempt.

Step 5: Register With EDD Before You Hire

Register with the Employment Development Department once you plan to have employees. This covers payroll tax accounts and related obligations. Confirm the details with EDD and your accountant before your first payroll.

Step 6: Check Your City Business Tax

Most California cities charge a local business tax or registration certificate. In total, 445 of 483 cities report revenue from one. There is no common formula, so the answer depends on your city. Ask the city clerk or finance department what applies to your address. Counties license only regulated activities.

Step 7: Submit Plans and Obtain the County Food Facility Permit

Before you sign a lease or start construction, contact your county environmental health department about plan check. Plan check reviews your kitchen layout, equipment, and finishes. After construction, the county inspects the space before it issues the food facility permit. Fees are set by each county, so request the current schedule in writing and budget from that document, not from anyone else’s numbers.

Step 8: Decide Whether You Need Processed Food Registration

A bakery that makes and packs product for wholesale needs Processed Food Registration with CDPH. The registration fee is $524 to $1,482, depending on size, activity, and number of employees. A $100 Food Safety Fee also applies, and it is waived for businesses under $20,000 in wholesale revenue. It is not clear whether a retail-only bakery permitted by a county must also register. Call the CDPH Food and Drug Branch at (800) 495-3232 and ask before you assume either way.

Step 9: Certify Your Staff

Food handlers need a food handler card within 30 days of hire. The employer pays for the course and the paid time to take it, under Health and Safety Code 113948. A bakery that handles nonprepackaged potentially hazardous food needs one certified food safety manager under Health and Safety Code 113947.1. A bakery that handles only non-potentially-hazardous food may instead show the inspector adequate knowledge of food safety. Ask your county which applies to your menu.

Step 10: Budget for Build-Out, Insurance, and Payroll

Work on the kitchen must follow the permitted plan. Contractor work is subject to licensing rules, and the contractor license threshold is $1,000 for labor and materials combined. Confirm the threshold and license requirements with the Contractors State License Board before you hire anyone. Get quotes for general liability insurance. Once you have employees, you will also need workers’ compensation coverage, so price that before you hire. For wages, the state minimum is $16.90 in 2026 and $17.40 from January 1, 2027. Verify both figures with the state labor agency before you set pay.

Government Fees at a Glance

Item	Amount	Agency
LLC Articles of Organization (LLC-1)	$70	Secretary of State
Corporation Articles of Incorporation	$100	Secretary of State
LLC name reservation	$10 for 60 days	Secretary of State
LLC Statement of Information (LLC-12)	$20 every two years	Secretary of State
Corporation Statement of Information (SI-550)	$25 every year	Secretary of State
Penalty for a missed LLC Statement of Information, after a Secretary of State notice	$250	Franchise Tax Board
LLC minimum annual franchise tax	$800 (see Step 2 above for the first-year rule)	Franchise Tax Board
Fictitious business name	$10 plus $2 per additional name or owner, plus county charges and newspaper publication	County clerk-recorder and newspaper
Processed Food Registration	$524 to $1,482	CDPH
Food Safety Fee	$100 (waived under $20,000 in wholesale revenue)	CDPH

Rent, plan check and permit charges, insurance, and build-out costs are not listed because they vary too much by county, city, and property. Get written quotes for each.

Common Mistakes to Avoid

• Selling cream-filled or custard items under cottage food. Those products are not on the allowed list, and selling them from a home kitchen puts your registration at risk.
• Selling to shops or restaurants under Class A. Indirect sales require Class B.
• Ignoring the cap. Track sales from the first day so you can move to a commercial kitchen on your schedule.
• Signing a lease before plan check. Confirm the space can meet county requirements before you commit.
• Missing the 40-day fictitious business name deadline. Late filings can cause problems with banking and contracts.
• Forgetting the LLC franchise tax. The $800 minimum applies even in a year with no profit.
• Assuming all baked goods are tax-exempt. Eat-in, hot prepared, and certain other sales are taxable.
• Skipping the city business tax check. Most cities charge one, and it is easy to overlook.

What Results to Expect

Many home bakers use Class A to test recipes, pricing, and local demand before they commit to a lease. Results depend on your market, pricing, product mix, and the time you can give the business. This guide does not promise sales or income, and no figure here should be read as a guarantee. A commercial bakery usually takes longer to reach steady sales than a home operation, so plan your cash reserves for that period. On labels and in marketing, avoid health claims. Words such as “may help” are still claims, so only make statements you can support.

Where to Get Free Help

The California Small Business Development Center network offers free and low-cost advising at https://californiasbdc.org/. For Los Angeles-area businesses, the SBA district office page is at https://www.sba.gov/district/los-angeles. For food safety questions on Processed Food Registration, contact CDPH at (800) 495-3232. For complex entity, tax, or lease decisions, work with a qualified attorney or CPA.