What Business Licenses & Permits are Needed in California?

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What Business Licenses & Permits are Needed in California?

Starting a business in California will mean potentially registering with a number of federal, state, and local agencies. Let’s take a look at common licenses and permits a business will register for in California.

Before applying for any licenses, the business entity will need to be established. Learn more about the differences between the sole proprietorship, general partnership, corporation, and Limited Liability Company (LLC)

Related: Comparison of Business Entities

Learn more about forming an LLC in California with the California Secretary of State.

Also see: Steps to Starting a Business in California

State of California Business License

There is no general state of California business license, however, many cities require businesses to be licensed in order to operate. Rules for business registration vary depending on location and what the business does. Below are a few cities that have licensing requirements.

Los Angeles – Businesses located in or have employees conducting business in the City limits of Los Angeles will need to complete a New Business Registration and obtain a Business Tax Registration Certificate with the Office of Finance.

San Diego – The City of San Diego requires a Business Tax Certificate for businesses operating within City limits.

San Jose – Within 90 days of starting, all businesses operating in City limits must obtain a Business Tax Certificate from the City of San Jose.

San Francisco – The Office of the Treasurer & Tax Collector requires any business to obtain their Business Registration Certificate within 15 days of starting the business. Business registration is required for any company operating within the corporate limits of the city. Additionally, certain businesses such as billiard halls, food service establishments, tattoo artists, ice cream trucks, and more have to register with the Office of the City Clerk.

Sacramento – The City of Sacramento requires businesses to have a Business Operation Tax Permit.

 

Done for you license research

Take the guesswork out of figuring out what licenses and permits are required to start your business with license research packages from IncFile or CorpNet.

For as little as $99, you can save a lot of time and know your business is in compliance with local, state, and federal requirements. 

 

Building & Zoning Permits

Zoning Depending on the location of the business, it’s important to verify whether the business needs an occupancy permit or has zoning clearance to operate. Depending on city requirements, home-based businesses may need to apply for a home occupation permit.

Building PermitA building permit may be needed from the city or county building and planning department if there is any construction or renovations to a facility.

Signage Permit Some municipalities require a permit before adding signage.

Seller’s Permit

Businesses in California must register for a California seller’s permit from the California Department of Tax & Fee Administration (CDTFA) if they are involved with any business activity in California and/or intend to sell or lease merchandise subject to sales tax.

Resale Certificate

Businesses purchasing merchandise to resell will usually want to obtain a California Resale Certificate to not pay sales tax for merchandise being resold to customers.

Occupational License

A variety of occupations in the state are regulated and need to be registered before offering certain services. A few common professions that require licensing in California include; auto repair shops, cosmetologists, pest control, and many more. Additional information, fees, and licensing requirements for professions are available from the California Department of Consumer Affairs.

In addition to professional licensing, there are a few other types of businesses that need licensing that are not covered by the Department of Consumer Affairs, a few of which include:

Employer Identification Number (EIN)

Many businesses will register with the Internal Revenue Service (IRS) for an EIN (also called a FEIN, Federal Employer Identification Number, or Federal Tax ID Number). The EIN is the business equivalent for a Social Security Number for an individual. Corporations, Limited Liability Companies, Partnerships, and Sole Proprietorships with employees will all need to register for one. Sole Proprietorships without employees can use the owner’s Social Security Number.

There is no cost for an EIN, and it only takes a few minutes to get.

Learn how to apply for an EIN

Fictitious Business Name Statement

While not a business license, Sole Proprietorships and Partnerships operating under a name that is different from the full name of the owner(s) must register for a Fictitious Business Name Statement (also known as a Doing Business As or DBA) with the County Clerk’s Office in the county where the business is located.

 

These are some of the most common business licenses, but there are far too many licenses and permits for us to keep track of. Before starting your business, be sure to check with the California Governor’s Office of Business and Economic Development CalGold website to he’ll identify permits, in addition to city Hall, County Clerk, Chamber of Commerce, and/or the local Economic Developer in your area to get more information regarding business licensing.

For some additional peace of mind, companies like IncFile or CorpNet can do the research and ensure you have all of the proper federal, state, and local licenses to start your business.

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