Do you need a license to start a business

Obtain the necessary licenses for your business in California, ensuring compliance with state, local, and possibly federal regulations. Simplify the process with guidance on where and how to apply, tailoring to your business needs and location.

By Brad Nakase, Attorney

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Have a quick question? We answered nearly 2000 FAQs.

Table of Contents

1. Do you need business licenses in California?

2. How you can get a California business license

3. How to establish a company in California

4. In California, how quickly can I get a business license?

5. In California, how much does a company license cost?

6. Are a business license and an LLC the same thing?

7. Renewal of a California business license

8. Does California require a business license?

9. In California, when is a business license required?

10. California local business licenses

11. Federal Permits and Licenses

12. FAQs regarding getting a California business license

Do you need business licenses in California?

It may be necessary to obtain a California business license, permission, or certificate in order to conduct business in the state.

Depending on the type of work you conduct, you may even require a number of these licenses. In that scenario, you are most definitely not the only one. A lot of businesses need to apply to the federal, state, and local governments for licenses or permits.

What kinds of licenses are available, and how can one determine whether a business license in California is required? We’ll address all of your concerns in this article.

How you can get a California business license

In California, the process of obtaining a business license, sometimes called a business tax certificate, differs depending on your line of work and where your company is located. A company operating license for the entire state of California is neither required nor issued by the state. Rather, it governs certain professions and sectors, such as accounting, law, and medicine.

Though conditions could change, you probably need to obtain a business operating license from your county or city.

How to establish a company in California

To establish your company and obtain the permits required to operate in California, follow these steps.

1. Give your LLC a name and structure

It is necessary to establish your company in the state of California before you may apply for licenses under your company’s name. That is accurate even if you are a one-person operation. If that is the case, you must establish a single-member LLC in California.

In order to establish your company, you must first file your articles of incorporation with the California Secretary of State and select a name that complies with California’s LLC naming requirements.

In California, registering an LLC costs $70. Within the initial four months of formation, extra taxes and filing fees totaling $820 are also owed.

You can just use your name as the business entity’s name if you are a solo owner operating under your own name. On the other hand, you will have to file a fake business name statement if you would prefer that your company be called something other than your name.

2. Submit an application for any applicable statewide licenses

In California, certain regulated professions demand a specific license in order to provide services. For additional information on the types of businesses that need licenses and permissions, as well as where to obtain them, continue reading below.

Licenses are issued by various government authorities for various professions. The Governor’s Office of Business and Economic Development in California’s CalGold online site offers guidelines for the kinds of permits that your kind of business might require.

You will also need to apply for other permits, like construction permits, health license permits, seller’s permits, and others, if you offer goods to consumers. The specific procedure varies by location, although in many cases, you can apply online.

3. Check the local licenses you require

Every county and city in California has its own rules and regulations regarding licenses.

However, keep in mind that the majority of the state’s counties and towns want business permits or licenses for all establishments, including one-person, home-based firms, if:

You are operating a business inside a city, find out what licenses are needed by contacting the city administration.
You are in an unorganized region, get in touch with the local authorities.
You have offices in multiple counties or cities – you may need to obtain licenses for each one.

To find out what is required, check with the county and city governments where your company is located. Your house, or a special address you chose for the business and listed when you created the LLC, is your location if you operate from home or remotely.

4. Get your business license(s) in California

In California, you can typically apply online for a business license. When submitting an application for a county or municipal business license in California, you will probably need to supply the following information:

Federal Employment Identification Number (FEIN) or Social Security Number (SSN)
An outline of the things you do for a living
Both your legitimate company name and any alias (also known as “DBA” or “Doing Business As”)
Your company’s launch date
Employee count and projected yearly sales
Business address and phone number
The contact details of every business owner
If applicable, your business sales tax number
The North American Industrial Classification System (NAICS) code for your industry (this code can usually be looked up online)
Proof of the commercial or professional credentials needed for your line of work

5. Request tax treatment and federal licenses (if necessary)

The United States government does not mandate or grant a general business operating license for the entire country, similar to the state of California. Nonetheless, a number of government organizations control a few businesses. Details regarding which industries need federal permits or licenses are provided later.

You can choose corporate federal tax status with the IRS if your company is set up as an LLC (or corporation), usually as a C Corp or S Corp.

In California, how quickly can I get a business license?

In a few weeks, your license or a certificate bearing your business license number should arrive in the mail.

After obtaining it, you might have to display it at your place of business. This is usually the case if your establishment is accessible to the public. To find out what requirements apply, read the license’s accompanying instructions.

In California, how much does a company license cost?

In California, obtaining a local business license usually entails paying a fee; however, certain towns exempt extremely tiny enterprises from this charge. Local fees can be as little as $15 or as much as several hundred dollars.

They might also be determined by your anticipated gross income (say, 10 cents for every $1,000 you anticipate making).

Every year, you have to pay a fee and renew your license.

The costs related to filing with the Secretary of State must also be paid whether your company is set up as a corporation or an LLC. There are no extra costs if you decide to operate your business as a sole proprietorship.

Are a business license and an LLC the same thing?

Although they are sometimes required when establishing a new firm in a state, an LLC and a business license are not the same.

An LLC, or limited liability company, is a kind of company structure that establishes financial and legal responsibilities. You establish a separate legal entity from yourself when you create an LLC. It shields your personal assets, such as your house and investments, from business liabilities like debt and lawsuits and allows you to customize how you’re taxed on the money you make from your business.

Any license, permit, or certification needed to offer goods or services is referred to as a “business license” in general. Government organizations at the federal, state, and municipal levels that oversee commercial operations and services require and provide various kinds of licenses.

Depending on your location and the services you offer, your company may need different business licenses.

Renewal of a California business license

Most business licenses need to be renewed periodically, usually once a year. Depending on the kind of license(s) you possess, you might need to renew directly with the organization that issued them.

Does California require a business license?

There is no state-wide business operating license required or issued in California. This implies that operating a business in California does not require a license from the state.

In California, when is a business license required?

California requires licenses and certifications for jobs requiring a lot of training or exposing customers to possible risks, much like every other state. These occupations include:

Medical practitioners
Attorneys and Accountants
Contractors for buildings and other construction-related jobs
Hairdressers and estheticians
Engineers and architects
Salespeople and brokers in real estate
Private detectives as well as additional security services

CalGold is the greatest resource for links to the issuing agencies and details on the business licenses that your kind of business needs.

California local business licenses

If your industry is exempt from statewide licensing or permission requirements, you may believe you are in the clear. However, it is likely that you will need to get some kind of business license.

Before conducting business in their county, companies are required by law in several California counties to get a business operating license. All businesses—including one-person, home-based enterprises—must comply with this rule. In addition to the county license, many cities also demand a business license.

Federal Permits and Licenses

The federal government does not require permits or licenses for the majority of small enterprises. However, some activities may need a federal license or authorization as they are governed by one or more federal agencies. If you work in any of the following fields, you may require a federal license:

Farming
Alcoholic drinks
Flying
Explosives, ammunition, and firearms
Animals and fish
Fisheries that are commercial
Transportation via sea
Drilling and mining
Nuclear power
Broadcasting on radio and television
Logistics and transportation

Find out which licenses are necessary for your firm by getting in touch with the federal agency overseeing the relevant activities.

As an illustration, consider this: Assume for a moment that your company provides television and radio broadcasting services. In this scenario, the Federal Communications Commission would regulate you. You may get additional details regarding federal licenses there.

Advice: The U.S. Small Business Administration provides a list of all activities that are subject to federal licenses, as well as links to additional resources.

FAQs regarding getting a California business license

In California, does an LLC require a business license?

In California, not every business, regardless of kind of structure, needs to have a license. The state controls and mandates licenses or permits for specific business activity, but it does not grant or require a business running license. Nonetheless, the majority of companies must apply for a company operating license from their county or city.

Does selling online in California require a business license?

Usually, the physical location of your business is where your internet business operates. Whether it’s your house or another location, this is typically the address you identify as your business address for tax purposes. The city, county, and state in which you do business control your operations. If you live in California, make sure you get the right licenses and permits before you start selling goods and services by adhering to local and state laws.

Does California offer a business license search service?

In California, you can conduct a business search at the Secretary of State’s office to learn about corporations, LLCs, and partnerships that are currently registered and dissolved. All business licenses aren’t displayed by this search, though. By using the state license board, you can verify a contractor’s license. To check the license status, simply input the contractor’s license number.

What is the price of an LLC business license in California?

In California, an LLC must pay $70 for the articles of organization, an additional $20 for filing a Statement of Information within the first ninety days, and an annual LLC tax of $800 that must be paid in the fourth month following formation.

Are LLCs subject to California taxes?

Because an LLC is a “pass-through entity” for tax purposes, business gains and losses are passed through to the owner and are subject to personal income taxation rather than corporate income tax. If you work in California, your income tax will be collected in the same manner as your personal income tax. Federal income taxes will also be incurred. You should be aware of payroll tax obligations, anticipated tax payments, and other federal laws.

Consulting an LLC lawyer can ensure your business complies with all tax obligations. You must then record and pay this sales tax to the state.

Have a quick question? We answered nearly 2000 FAQs.

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