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Swyft Filings is committed to providing accurate, reliable information to help you make informed decisions for your business. That's why our content is written and edited by professional editors, writers, and subject matter experts. Learn more about how Swyft Filings works, our editorial team and standards, what our customers think of us, and more on our trust page.
California offers exciting opportunities for business owners, but there’s one crucial step you need to take before you can start running your new business: apply for business licenses. Most small businesses, whether you run a limited liability company or a corporation, will need a business license to stay in good standing in California.
California Business License: Key Takeaways
A business license is a crucial legal document that permits your business to operate in a specific geographic area.
Your new business may need a federal, state, or local license. Most companies require more than one license.
California doesn’t have a general business license requirement. Still, you may need to get state or local licenses depending on the nature of your activities.
Ensuring you have the right business licenses and permits is crucial. Let us manage the complexities for you, so you can stay focused on what you do best — running your business.
What Is a Business License?
A business license is a crucial legal document that permits you to carry out certain business activities in a specific location. In California, most small businesses must hold at least one business license or permit. As an entrepreneur, you must research what licenses your business entity needs.
Licensing obligations exist at the federal, state, and local levels. What type of business license you need depends on the nature of your business activities. For example, businesses in highly regulated industries, such as alcoholic beverages, may require a federal, state, and local license.
Remember that applying for a business license differs from registering a business structure, such as a limited liability company or a DBA (doing business as). Registering a business establishes it as a separate legal entity. Applying for the necessary licenses and permits permits you to conduct business activities.
Get Your California Business License in 8 Steps
Figuring out what business licenses and permits your California business needs can be confusing. Business owners may need help to figure out whether they need a federal license, a state license, an occupational tax certificate, or a combination of different licenses and permits. Follow the steps below to keep your business compliant and start operating quickly.
Step 1: Apply for California General Business Licenses
Some states require all businesses to obtain a general business license regardless of the nature of their activities. However, California does not have a general state license requirement. Instead, your small business will likely need a local business license from your county, city, or town.
Depending on your industry and the type of business services you provide, you may also need to get a professional license. For example, real estate agents must apply for a Real Estate Salesperson License.[1]
If you are engaged in business in California and “intend to sell or lease tangible personal property that would ordinarily be subject to sales tax if sold at retail,” you also need to obtain a seller’s permit by registering with the California Department of Tax and Fee Administration (CDTFA).[2]
Step 2: Apply for Federal Licenses for California Businesses
The federal government regulates specific industries to ensure a standard level of safety and quality. Suppose your new business carries out activities that fall under these regulated industries. In that case, you need to obtain a federal business license.
Business owners need to apply for a federal business license if they are involved in the following industries:[3]
Agriculture: import and transport of animals, animal products, biologics, biotechnology, and plants across state lines
Alcoholic beverages: manufacture, wholesale, import, and retail
Aviation: operating aircraft, transporting people or goods via air, and aircraft maintenance
Firearms, ammunition, and explosives: manufacture, dealing, or import
Fish and wildlife: import and export of wildlife and derivative products
Commercial fishing
Maritime transportation: ocean transportation or facilitation of shipment of cargo by sea
Mining and drilling: drilling for natural gas, oil, or other mineral resources
Nuclear energy: commercial production of nuclear energy, operating a fuel cycle facility, or distribution and disposal of nuclear materials
Radio and television broadcasting: broadcasting information by radio, television, wire, satellite, or cable
Transportation and logistics: operation of an oversized or overweight vehicle
If your business activities fall within one of the regulated industries, you need to contact the federal agency responsible for overseeing your industry. For example, the Department of Agriculture can issue you a license to transport animal products across state lines.
Remember that getting a federal license doesn’t satisfy state or local requirements. Once you get your federal license, you may also need to apply for additional permits to comply with local and state laws.
Step 3: Search for California Permits and Licenses
California doesn’t have a general business license requirement. However, depending on the nature of your business activities, you may still need to obtain a state license. For example, restaurant owners need to get an Alcoholic Beverage License and register to pay an Alcoholic Beverage Tax.[4]
You must get a seller’s permit to sell or lease tangible personal property. Typically, most businesses that sell products (as opposed to services such as consultancy) need a seller’s permit, even if you’re selling digital products online. You can get your seller’s permit by registering with the California Department of Tax and Fee Administration (CDTFA).
You may also need additional licenses, such as a professional license or a building permit. You can use CalGold to figure out what types of licenses your business needs.
Step 4: Search for Local County or City California Business Licenses
Your county, city, or town in California may require you to obtain additional licenses to keep your business in good standing. The best way to determine what type of local business licenses you need is to contact your local tax office or city hall. Professional licenses, building permits, ordinances, and zoning permits are just some of the licenses you may need.
For example, a photographer in Oakland may need to obtain a building and construction permit and a business tax certificate, among other requirements. A beauty salon in Berkley requires a hazardous materials/waste management program certification, a building permit, and a Barbering and Cosmetology License.
Step 5: Search for California Professional Licenses
Certain professions that require high levels of education or training may need a professional license. Your job may be regulated at the state or local level. For example, doctors, plumbers, and health professionals like chiropractors often need to secure additional licenses to comply with the law.
Step 6: Apply for a California Home-Based Business License
Home-based businesses, such as daycare centers and online companies, must obtain proper business licenses and sometimes face extensive requirements. If you plan to run your new business from home, research local and state requirements and get all the necessary home occupation licenses.
What type of business licenses your home-based small business needs depends on the nature of your activities and your business location. For example, a daycare center in Berkley needs a special home-occupation permit, a home care license, a child care license, and a business tax certificate, among other requirements.
Step 7: Maintain Your California Business License
Business owners must regularly renew their business licenses and maintain them up to date with the federal government, the State of California, and their California county or local authorities. In most cases, business licenses (including business tax certificates and occupational tax certificates) need to be renewed every year, but there are exceptions.
Some licenses and permits don’t need to be renewed but come with other obligations. For example, you must notify the CDTFA if your business address, phone number, or other contact information changes to keep your seller’s permit current. You are also required to keep business records.[5]
Keeping track of the steps to maintain your California business licenses in good standing can be time-consuming. We can help you get your licenses and permits and keep them compliant so you can focus on growing your business worry-free.
Apply for a California Business License Online
Getting the necessary business licenses and permits is essential to keep your new business in good standing. However, many business owners don’t want to spend long hours researching tedious requirements and filling out business license applications. Instead, they want to focus on what matters most - growing their small business.
We can help you quickly obtain all the business licenses and permits your new business needs to thrive. Our expert team will carefully research your company’s federal, state, and local requirements and contact appropriate agencies to keep your business in good standing. Learn how we can help you here.
Focus on Your Business: Dive into your passion while we handle the intricacies of acquiring the necessary local, state, and federal business licenses and permits.
Simplify Your Paperwork: Complete our straightforward questionnaire, and we’ll handle all the required filings for you, accurately and promptly.
Stay Compliant: Avoid the risks and severe repercussions of non-compliance. We’re here to ensure your business remains in good standing.
FAQs
How do I get a business license in California?
Start with investigating what kind of business licenses and permits you need at the federal, state, and local levels. Most businesses need at least one license or permit to operate. Still, depending on the nature of your activities and location, you may need several.
Does California require a general business license?
No, California does not require a general business license. However, depending on the nature of your activities and geographic location, you may need a sales and use tax permit or a local business operating license. Certain professions also need to obtain additional licenses to practice in their industry.
Can you sell things in California without a license?
You need a seller’s permit (the sales and use tax permit) to sell things in California, even if you’re selling digital products online.
Do I need a special license for an online business in California?
It depends on the location of your business and the nature of your activities. You may need a home occupation license in some municipalities. You may also need a seller’s permit to sell digital products online.
Can I collect sales tax in California without a license?
You need a seller’s permit to collect sales tax in California. You can get your seller’s permit for free by registering with the California Department of Tax and Fee Administration (CDTFA).
How much does a California business license cost?
It depends on the type of business license you are applying for. Some of them, such as the seller’s permit, are free.
What’s the penalty for not having a business license in California?
There are severe consequences for carrying out business activities without proper business licenses and permits. Make sure to research the requirements at the federal, state, and local levels. Your county clerk can be a good resource.
Bibliography
California Department of Real Estate. “Requirements to Apply for a Real Estate Salesperson License.” Accessed October 19, 2023.
State of California. “Apply for Business License.” Accessed October 19, 2023.
US Small Business Administration. “Apply for licenses and permits.” Accessed October 19, 2023.
Governor’s Office of Business and Economic Development. “CalGold.” Accessed October 19, 2023.
California Department of Tax and Fee Administration. “Your California Seller’s Permit.” Accessed October 19, 2023.
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