California doesn’t issue or require you to have a state license to start your California-based business. But it does require licenses and permits for certain business activities.
For example, you might need specific county or city business licenses, appropriate permits, or a zoning clearance to start and operate an LLC in the Golden State.
Fortunately, starting an LLC in California is easy. You choose a business name, select your registered agent, file an article of organization, an initial statement of information with the Secretary of State, and get a California LLC EIN.
California business licenses and permits, however, are trickier. Your business might need several and have to apply at a local, state, or federal government level. And, you need to know what they are and where to get them.
I’ll answer all those questions in this post. Let’s get started!
State or local governments issue business licenses and permits to allow businesses or individuals to do business within their geographical jurisdiction.
The difference between licenses and permits is that licenses are permission given to allow you to do or use something. In contrast, permits are legal or official documents issued to ensure you adhere to and administer safety issues.
California doesn’t issue a state-wide business license, which means you don’t need one to run your business. But California does require most businesses to get a business license at a city or county level for tax purposes.
To do business in multiple counties or cities, you may need a business tax certificate in each location and a business license in your hometown.
The CalGold website is an excellent resource to see which types of licenses and permits you might need.
Besides business licenses, you might also need to get permits from your local government.
Local governments like your city or council will have their unique regulations and requirements regarding specific permits, and you’ll have to get any that apply to your business to trade.
Here are several standard permits you might need:
Registering for a business license (also called a tax certificate) and permits varies by location and occupation, and most licensing and regulatory agencies allow you to apply online.
You can find the appropriate regulatory agency by visiting the California Department of Tax and Fee Administration website.
Operating without a license is a misdemeanor and could cause the closure of your business, fines, fees, and lawsuits if you continue trading without them.
Local governments have wide-ranging regulations and business license requirements that cover a range of professions and services, including building codes, zoning ordinances, and leasing laws.
You can find out what licenses and permits you require by contacting your local city or county clerk’s office, which maintains and issues local business licenses.
Also, check with your county or town’s local government to determine which licenses you need to operate in their jurisdiction. Here are 4 local permits many businesses need:
Zoning permits regulate what types of businesses can operate in a particular area; they’re locally specific and can change from block to block. Zoning permits cover issues like signage, store appearance, noise, and waste disposal. Operating without a zoning permit is an offense and can lead to business closure, fines, and prosecution.
Any business that deals with food storage, transportation, preparation, or serving food requires a health permit. Once you receive it, state agencies carry out regular checks to ensure you maintain food hygiene standards.
To comply with all safety regulations and standards, you need building permits to renovate or structurally change residential and commercial properties. The building permit you’ll need depends on the work you’re doing. Permits include structural, electrical, and plumbing. Always use a licensed contractor to advise you on the work and permit you’ll need to comply with local regulations.
Local government agencies also regulate environmental issues and the impact businesses have on their local area. Before starting your business, some permits you might need to get include water quality, air quality, and waste disposal.
State business licenses are government documents that prove a business has applied for and received permission to trade within its state.
Depending on your business type and location, you might need to apply for many state licenses. And almost all businesses require a state-level seller’s permit/license to do business in the state of California.
California state requires any business that sells products or goods to get a California Sales Tax Certificate Number (seller’s permit). This seller’s permit lets you charge and submit sales tax for items you sell.
You can register and apply online for your California seller’s permit with the Department of Tax and Fee Administration.
Registering for a Californian seller’s permit requires creating an account on their website and registering your business entity (such as an LLC, corporation, or partnership) with the California Secretary of State’s office.
It’s difficult to put a cost on fees as they vary between counties and some cities are exempt. Most counties charge a business registration and seller’s permit fee, ranging between $15 and $100.
However, it depends on your business model; contractors can pay as much as $700 for a non-sole owner’s timely active renewal fee.
Fortunately, seller’s permits are a one-time registration, so there are no renewal fees.
Your business in California might also need a state-side license covering specific industries or professions.
All California counties have their own rules and regulations, so check with your local city or county government office to determine which state licenses your new business might need.
You can find the relevant information for professional licensing on the CalGold website and the California Business Portal.
Here are some standard state licenses your business might need:
Any business that purchases merchandise intending to resell must get a California Resale Certificate to avoid paying tax to suppliers.
Not all California businesses require a seller’s permit. If you sell to a purchaser without one, you must use a resale certificate and indicate that you don’t hold a reseller’s permit.
Several professions in California need to apply for a professional license before offering their services. These include:
You’ll find additional information, fees, and licensing requirements for various professions on the California Department of Consumer Affairs website.
Most small businesses in California don’t require a federal government license or permit. However, if the federal government regulates your business activities, you must apply for and get the appropriate federal business licenses and permits.
And sometimes, 2 federal agencies can regulate one business activity. In that case, you might need to get a license from both agencies. Mandatory federal licenses and permits apply to activities like:
The Small Business Administration (SBA) provides a list of federally regulated businesses and the contact details of government agencies you must apply to.
All cities and counties in California have their business license filing requirements; however, most require you to have the following information:
Follow each step, contact the appropriate agencies and get all the business licenses or permits you need. Check at the federal level using the SBA website to see if your business needs a license. Contact your county government and confirm if you require specific business licenses or permits, and check if you need common state licenses as well.
Then your new Californian business will be legal throughout the state.
This portion of our website is for informational purposes only. Tailor Brands is not a law firm, and none of the information on this website constitutes or is intended to convey legal advice. All statements, opinions, recommendations, and conclusions are solely the expression of the author and provided on an as-is basis. Accordingly, Tailor Brands is not responsible for the information and/or its accuracy or completeness.
Terry is a serial entrepreneur with over 25 years of experience building businesses across multiple industries – construction, real estate, e-commerce, hotelier, and now digital media. When not working, Terry likes to kick back and relax with family, explore Taoism’s mysteries, or savor the taste of fine Italian red wine.
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