How to get a business license in California

If you’re one of 4.2 million small businesses in California, chances are you’ll need a business license. Having a business license establishes credibility, but, more importantly, in most cases, it’s required in the Golden State to keep your operations up and running. 

We’ll walk you through the ins and outs of getting a business license in California, including when you are required to have one and the steps involved in obtaining the necessary licenses and permits. 

When is a business license required in California?

Most businesses in California require, at a minimum, an operating license to do business in the state. The operating license is also known as a business tax certificate.

If your business is based in multiple locations, you’ll need to get a business license at your principal location. You’ll also need to get additional business licenses in other locations like the cities and counties you do business in.

At the state level, California only administers seller’s permits, which are required for any business that is selling goods. Business licenses or business tax certificates are administered and controlled at the county or local level. This is for tax purposes. So, while you don’t need a business license for the state of California, chances are you might need one for the county or city you’re based in.

The kind of business license you might need depends on your line of business and its principal business, Mahyar Ghassemian, managing attorney at Ghassemian Law, explained. 

While this might complicate matters, the good news is you can use CalGold, a comprehensive database that helps you figure out the type of licenses or permits you need based on the city or county you live in and the type of business you have. It also shows you which regulatory agency administers the license or permit. 

There’s also a database to search for forms you’ll need to fill out and submit any fees you’re responsible for paying. Once you input the city or county, plus the type of business, you’ll get a list of licenses, permits, tax certificates and business forms you might need to apply for. You can filter at the city, county, regional, state or federal level. 

What will you need to get a business license?

Because you need to apply for business licenses, permits or tax certificates at the city or county level, the documents, information and other required information will vary, explained Ghassemian. Generally speaking, expect to provide the following:

• Name of your business.
• Any fictitious names or DBAs. 
• Location(s) of your business and contact information.
• Name of owners and partners.
• Contact information for each business owner. 
• Start date of your business. 
• Federal Employment Identification Number or Social Security number. 
• Description of business activities. 
• Your business’s industry code under the North American Industrial Classification System (NAICS). 
• Business sales tax number. 
• Copies or documentation of any required professional or commercial certifications. 

How to get a business license in California

Here’s how you can go about getting a business license in the Golden State:

1. Form a business structure for your company

Before you start thinking about getting any required business licenses to start a business in California, you’ll first need to decide on a business structure for your company. 

In the state of California, there are several main business types: 

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

There are specific formalities you have to follow for each one of those business structures, said Ghassemian. To decide whether you want to do that, you want to make sure you look at the liability side as well as tax issues.

To form a business structure, you’ll need to create an account with the California Secretary of State’s bizfile Online, then follow the steps to register your business. For example, to register an LLC in California, you’ll need to file articles of organization and provide the following:

• Name of business. 
• Business address. 
• Name and address of registered agent.
• Management. 
• Purpose statement. 

2. Name your business

You’ll also need to decide on a name for your business. It can’t be the same name as an existing business in the state. Plus, it can’t bear a striking resemblance to another business.

A good place to start is California’s Secretary of State’s business search tool. It’s also sound practice to do a search on the U.S. Patent and Trademark’s database to make sure the business name you had in mind isn’t already trademarked by another company. 

3. Register for a business license in California

Formation does not equate to having a business license, explained Kendall Lovell, an associate at Fennemore Law. Business owners must apply separately for business permits and licenses. 

“In California, each city and county has their own requirements, so business owners need to make sure they look at the requirements for their specific type of business based on that business’s location,” she said. “If the business has more than one location, the business owner will need to apply for business permits and licenses in each city or county where the locations are situated.”

Once you’ve set up a business structure and have gathered the necessary information and documents, you’re ready to get a business operating license or business tax certificate. As mentioned, these are administered at the city or county level.

Besides doing a preliminary search on CalGold, look for details on getting a license from your city’s official website. If your business will be located in a rural or unincorporated area, you will need to get a license from the county. If your business is located in an unincorporated city, you can get a license from the city. 

If you’re applying for a license, permit or account with the California Department of Tax and Fee Administration (CDTFA), you’ll need to provide the following:

• Valid form of ID (i.e., driver’s license, city ID card, military ID or U.S. passport). 
• Social Security number or Individual Taxpayer ID. 
• Email address. 
• The name and address of the supplier. 
• Personal references.
• Address and phone number of bookkeeper and/or accountant (if applicable). 
• FEIN. 
• California Secretary of State Entity Number. 
• Officer, member or partner information.
• Agency name.
• Contact info of the person tasked with maintaining your company’s books and records. 

4. Get a federal tax ID number

You can register with the IRS for your federal employer identification number (FEIN), which is a unique identifier for your business entity. You’ll need your FEIN to file tax returns and open a business account. You can apply for a FEIN for free online through the IRS.

In California, if you’re going to have employees, then you’ll also need a state EIN in addition to your federal one. You can apply for one from the Employment Development Department (EDD).

5. Register for state and local taxes

If you’re in the business of selling tangible goods in the Golden State, you’re required to carry a seller’s permit. You’ll need to open a tax account and get a seller’s permit through the California Department of Tax and Fee Administration (CDTFA). You’ll also need to file a sales and use tax return, which is due quarterly.

6. Apply for other local licenses as needed

Check the CalGold website to see what other local or statewide licenses you might need. This largely depends on the type of business and industry you’re in. 

In California, you may also need to register a Doing Business As (DBA), which is a legal alias for your company. DBAs are required when your business name doesn’t include the last names of you and/or your partners, the business name implies there are additional owners or the nature of your business isn’t clear by its name.

In California, you’ll need to apply for a DBA or a Fictitious Business Name (FBN) with the County Clerk’s office. 

7. Check zoning laws and required permits

Different cities and counties have different zoning laws, which outline what types of businesses are allowed to operate in your area. Common types of permits include:

• Zoning and land use permits. 
• Building permits. 
• Fire department permits. 

Both home-based businesses and those that operate out of commercial spaces need to check the rules with their local planning departments. 

8. Apply for federal licenses as necessary

The federal government doesn’t issue any general business licenses, but you might need a license or permit with a particular government agency. Some examples of business types or goods that will require additional licensing or permitting include:

• Agriculture.
• Alcoholic beverages.
• Aviation. 
• Firearms, ammunition and explosives. 
• Fish and wildlife. 
• Commercial fisheries. 
• Maritime transportation. 
• Mining and drilling. 
• Nuclear energy. 
• Radio and television broadcasting.
• Transportation and logistics. 

19 types of business licenses in California

There is a wide swath of profession-based businesses and businesses that might pose a hazard and require licenses to operate. These include: 

• Aerial tramways and amusement rides. 
• Animal services. If you’re a veterinarian, veterinary assistant, vet food-animal drug retailer or veterinary tech, you’ll need a professional license.  
• Athletics. This includes judges, athletes and referees. 
• Automotive services. Car repair services and car washing and polishing services fall under this category. 
• Barbering and cosmetology. Barbers, cosmetologists and manicurists are under this category. 
• Building and construction, engineering. Contractors, engineers, electricians and architects need a license. 
• Cemetery and funeral bureau. Funeral directors, embalmers and cemetery brokers fall under this category. 
• Door-to-door sales. Employers, transporters and supervisors need a professional license. 
• Education. Charter schools, studio teachers and private schools need licenses. 
• Entertainment. This includes entertainers, child performer services and talent agencies. 
• Finance and accounting. Fiduciaries, accountants, CPAs and other tax professionals need a license. 
• Financial institutions and lenders. These include banks, credit unions and online lending platforms. 
• Garment manufacturing. Garment manufacturers and contractors need a license. 
• Health and healthcare-related services. All health professionals need a professional license, including acupuncturists, optometrists, physical therapists and doctors. 
• Horse racing. Horse owners, trainers and authorized agents need a license. 
• Industrial homeworkers. Professionals who produce goods for an employer fall under this camp. 
• Legal services. Attorneys, court reporters and arbitrators are required to have a professional license in California.
• Real estate. This includes realtors, brokers or appraisers. 
• Security and investigative services. This includes being a security guard, locksmith or private investigator.

How much does it cost to get a business license in California?

Typically, you do have to pay a fee to get a business license in California. However, some cities might exempt the fee if you gross under a certain amount or are considered a microbusiness. Fees can vary based on location and are anywhere from $15 to a few hundred dollars.

Your fees might also depend on anticipated gross revenue and be tiered. For example, 15 cents for every $1,000 of projected revenue.

As Lovell explained, obtaining the necessary business licenses for your type of business can impact not only your ability to conduct business in a certain location but it can also impact your business insurance coverage and any professional licenses you might hold that are related to your business. In turn, it’s important to do your homework and see what types of licenses and permits are required for your type of business. 

Frequently asked questions (FAQs)

How long does it take to get a business license in California?

It depends, but generally, you can expect it to take a few weeks to get a general business license approved in the state of California. Note that while a business license isn’t required at the state level, you’ll need one at the city, county or municipality level. This includes review and investigation. In some municipalities, the process could take longer.

Can you operate a business without a license in California?

While the state of California doesn’t require a business at the state level, many cities and counties do. Be assiduous in researching and following local requirements.

Do I need a business license for an online business in California?

Yes, e-commerce businesses are required to have a business license for the location in California you are operating from.