Real Estate

How to Get a Business License in California in 8 Steps

Entrepreneurs in the Golden State will need to know how to obtain a business license in California to ensure their business follows all legal requirements.
How to Get a Business License in California


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Like in any state, it’s important for entrepreneurs in California to know the legal requirements they need to meet before they can open their doors for business. The process of getting a business license in California varies according to the city and county the business is located in, as well as the business type. While the state of California doesn’t require a state-wide general business license, it does regulate some specific industries. Many of the business requirements are handled at the local city or county level, and the state can issue a seller’s permit. With a few exceptions, the majority of businesses in California will need to apply for a business license for tax purposes and to operate legally.

If a new business owner opens their venture without a license, they can be fined, face legal issues, or risk having their business closed. The following are the most common types of business licenses that a California entrepreneur may need.

  • Business operating license. This is sometimes called a general business license or permit.
  • Doing Business As (DBA). This type of license is required if a business owner is doing business under a different name than the registered name that was filed with the Secretary of State.
  • Liquor license. If the business sells or distributes alcohol, a liquor license is required.
  • Seller’s permit. This is needed if the business sells goods and services.
  • Speciality licenses. These types of licenses are required for specific industries, such as plumbing, legal counsel, accounting, or massage therapy.

A business owner can contact the California Secretary of State business office to register a business in California, while the city and county offices handle local business permit applications. If an entrepreneur is going to operate more than one business in different locations, they will have to register and apply in each city and county. There are several different materials and documents a business owner may need, including the following.

  • Business name registration
  • Business structure documentation
  • Federal Employer Identification Number (EIN)
  • Local permits
  • State registrations
  • Proof of legal presence
  • Proof of property ownership or lease agreement
  • Financial statements
  • Fee receipts

Is a business license required in California?

How to Get a Business License in California

Starting a business in California can be a bit confusing since the state business license and county business license requirements differ from city to city and county to county. A business license is typically required in California, but the specific requirements will vary depending on the type of business and locality. Getting a business license ensures that a business owner is in compliance with the local laws and regulations.

It’s important to note that an owner will need a business license if their business is registered as a limited liability company (LLC). The formation of an LLC protects the owner from risking their own money in the event the business faces legal trouble or incurs significant debt, but it does not exempt the company from getting the required permits and licenses. Even online businesses need a business license. Whether it’s necessary to obtain an online business license depends on the type of business, the location, and the regulations in that specific industry. If an owner isn’t sure about what type of business licensing they need or they’re wondering “Do I need a business license to sell on Etsy?” it’s recommended that they consult with local government offices or a business lawyer.

Non-residents can start a business in California, but they may need to have a registered agent within the state that will fill out important documents or handle any type of legal issue that may arise. In California, a seller’s permit is needed if a business rents property or has any type of retail sales. This permit lets the business charge sales tax and send the tax money to the state. While navigating California business registration and applying for a local business license can be intimidating for some business owners, having the correct permits and licenses ensures the business is in compliance with the state and local laws.

Tips for How to Get a Business License in California

  • Identify the specific type of business license needed.
  • Research the requirements around licensing in the city and county where the business will be located by contacting the local government offices.
  • Visit the California Secretary of State’s website to see if any additional registration is required for the specific business.
  • Fill out all applications carefully and include all required documentation.
  • Discover how much the application fees are and complete timely payment to expedite the application process.

STEP 1: Visit CalGold to research the specific types of business licenses and permits you’ll need and locate your local permit office.

When starting your own business in California, it’s important to follow these steps to getting a business license. California makes beginning the process a bit easier with the CalGold website, which lets business owners search by business type and location to discover which types of licenses or permits are needed and which local offices handle the specific California business license application. Developed by the Governor’s Office of Business and Economic Development (GO-Biz), CalGold allows business owners access to information about permits, licenses, and business regulations. CalGold provides detailed information about each required permit or license, including the application process, required paperwork, and fees. This is especially helpful so business owners won’t overlook any needed documentation. The site also allows users to print out a handy checklist to refer to during the application process.

STEP 2: Look into federal licenses and tax treatment requirements.

Understanding federal licenses and tax treatment requirements is another important step to getting a small-business license in California. When starting a business, it’s crucial for the business owner to know if the industry requires federal permits or licenses. Depending on the nature of the business, there can be specific regulations and licensing requirements enforced by the federal government. It’s also recommended that business owners look into the best small-business insurance (such as Thimble or Progressive Commercial) for protection and research the cost of small-business insurance to be prepared for the expense. Many small California businesses will not need federal permits or licenses, but some industries that commonly require federal occupational business licenses include:

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

Complying with the Internal Revenue Service (IRS) is another important factor so business owners can avoid penalties or legal issues. The first step in ensuring compliance is registering for an employer identification number (EIN). This number is used to report employment taxes, file tax returns, and meet other types of legal responsibilities related to income tax and payroll taxes.

A business owner will also want to determine the business’s structure—sole proprietorship, partnership, limited liability company (LLC), or corporation. Since each structure has its own set of tax implications, that decision can affect the owner’s personal or the business’s tax payment amount and deductions. It’s recommended that business owners consult with business and tax professionals for guidance through the federal and state tax treatment requirements in California. Business owners can work with one of the best LLC services, such LegalZoom or Northwest Registered Agent, to properly register their business in the state.

How to Get a Business License in California

STEP 3: Gather and complete the appropriate application forms.

Next, it’s time to collect all the paperwork and fill out the application forms. Making a list of all the required documents can help applicants stay organized and avoid the chances of missing any essential forms. Various applications will have different deadlines, so it’s helpful for applicants to create a calendar and identify the earliest deadline and focus on that application. It’s also important to note that some applications take longer to fill out, especially if they require a personal statement or supporting paperwork.

Applicants will want to give careful attention to detail when filling out the paperwork. Since a business license ID can be delayed or rejected due to filling out a form incorrectly, it’s recommended that business owners take their time when filling out each form. Before submitting the paperwork, each form should be double-checked to make sure the correct information has been included and the fees have been paid. Some offices may have differing requirements for submission, and some forms can be submitted online, via mail, or in person. It’s always a good idea for applicants to make and keep copies of all paperwork for their records.

STEP 4: Check which documents are needed to apply for a business license and gather them together.

Whether an entrepreneur is getting a City of Los Angeles business license or a San Francisco business license, they will want to familiarize themselves with the local regulations before collecting all the needed documents. By carefully going through the guidelines for applying for a business license, applicants can make sure they have the correct paperwork and forms. Each California location will have different requirements to apply for a business license depending on the industry and business type, so this is why knowing what types of documents are required is critical.

Documents requested can include a driver’s license, passport, or Social Security card; a business plan; zoning permits; proof of property ownership or a rental agreement; health and safety permits; and the EIN. Once the business owner knows what type of documents are needed, they can have them available to help stay organized.

STEP 5: Apply for the specific licenses needed for your business either online or in person.

Whether the application is completed online or the paperwork is dropped off in person, the application process is a crucial step. Some business licenses can be obtained online through the website, while others may require an in-person application. Many state and local offices have convenient online portals that can make the application process faster and easier.

Applicants will want to fill out the forms carefully and thoroughly and include any required documentation. Paying the necessary application fees for each license ensures the timely review and approval of the permits and licenses. If business owners are applying online, it’s advisable that they confirm their applications have been submitted and accepted by printing receipts or making copies of confirmation emails.

If applying in person, applicants will want to ask about how long the approval process might take and inquire about how to follow up on each application. Being proactive and checking for updates about the status of the application can help business owners stay on top of the process from beginning to end. If the application process is confusing, it’s recommended that business owners get in touch with a professional, such as a registered agent or business registration service, for advice.

STEP 6: Pay the applicable application fees, which may vary by locality and by business structure.

The cost of a California business license depends on the location and the type of business. While getting a San Diego business license comes with some fees, some areas may not require small businesses to pay for a business permit. A business license in California can cost from $15 to several hundred dollars, and that amount will need to be paid every year when the license is renewed. It’s common for larger businesses to be charged a percentage of their annual income and number of employees instead of a flat fee.

How to Get a Business License in California

STEP 7: Receive your license by mail and post it in a visible place if required by law.

The time frame for getting a business license in California can vary based on the type of license, the individual processing time for each local office, and any additional requirements for each specific industry. Ultimately, how long it takes depends on the individual needs of the business. Since an LLC may need a seller’s permit, a local license, and an occupational license (such as a plumber, electrician, or HVAC technician license), the overall timeline can vary. It may take a few days or a few weeks for a seller’s permit to be approved, while some occupational licenses can take 8 weeks or more. In the end, it comes down to the individual city and county.

Once the processing is complete, the business license will be mailed to the address on the application. After it’s received, the owner will want to take a moment to review the license and make sure all the information is correct. If there are any mistakes, the proper offices should be notified. Some municipalities may require the business to display the license in a visible spot.

STEP 8: If your application is denied, look into filing an appeal.

There’s always the possibility that a business license application might be denied. If this happens, business owners will want to carefully read the denial letter to understand the specific reasons for the denial. If they’re not sure of the reasons, they can reach out for clarification. If additional documents are needed or corrections in the application need to be made, they will want to make sure to provide all requested items. In addition, they will want to be sure to document any changes to the application form and keep a record of any communication or modifications. Depending on the reasons for denial, they can either reapply for the business license or file an appeal.

It’s advisable that applicants familiarize themselves with the appeal process and follow directions for submitting paperwork and any additional documentation. If they’re not sure how to navigate the appeal process, it’s recommended they consult with a legal professional for guidance. Since the appeal process may take some time, it’s important for them to be patient but persistent in checking in and following up on the appeal status.

Getting a business license, whether in California or another state, requires a thorough understanding of what’s required to ensure compliance in the specific field and location of the business. By following these steps, business owners can ensure their business is following local, state, and federal guidelines and regulations. The overall process emphasizes thoroughness, organization, and adherence to all legal requirements. Throughout the entire application process, it’s important for an applicant to keep an open line of communication, document any changes, and seek professional assistance when needed.

Sources: Forbes