How to get a business license in California: The ultimate guide

Navigating all the red tape when launching a small business can be really time-consuming (and at times, can feel really difficult!). Especially when you have to worry about business licenses on the local, state, and federal level. (If only you could just get one business license and call it a day. *sigh*) 

But don’t worry, this guide covers everything you’ve been wondering about business licensing in California! Keep reading to learn how to get a business license in California and feel confident you’re starting your business on the right foot.

Is a business license required in California?

In short, you’ll probably need at least one type of business license from the state of California. While the state doesn’t require a state-level operating license (in other words, a license for the sake of doing business), a seller’s permit will probably be needed by most businesses that sell goods, along with any relevant local or federal licenses, which we’ll cover in the next sections. 

Types of business licenses in California

If you're starting business in California (or already have one!), you need to consider business licensing at three different levels: local, state (in this case, California), and federal. Let’s go over each category. 

Local business licenses in California

Generally speaking, you will almost always need a general business operating license, usually called a “business license” (simple, right?) or “general license,” which usually includes a business tax certificate, from your city or county. 

There are various other local licenses or permits that may be required in California based on your industry and your specific location. There’s no-one-size-fits-all rule, so we suggest checking out the CalGold site (operated by the Governor's Office of Business and Economic Development) to determine which permits and licenses you need on the city and county level. For example, if you own a restaurant, you’ll probably need a public health operating license. 

On the permits side of things, the most common ones small businesses need are: 

• Zoning permit: needed if you’re planning to construct your business in an area that was not originally zoned for your type of business.
• Building permit: needed if you’re constructing or renovating a building. 
• Fire department permit: needed for any public-facing building that uses flammable materials. 

Statewide business licenses in California

Let’s expand more on the seller’s permit we mentioned earlier. You’ll need a seller’s permit, also known as a “sales and use permit,” from the state of California if your business sells goods and other tangible products.  

Some businesses may require other state-level licenses depending on their industries, so we recommend consulting the CalGold site to check what other licenses you’re responsible for obtaining. For example, if you plan to open a restaurant that sells alcohol, you’ll need to get a license and pay the Alcoholic Beverage Tax. 

Federal business licenses and permits

Any federal business licenses and permits you’re required to get will probably be industry-specific. The US Small Business Administration (SBA) has a list of the industries that need licensing on the federal level, which includes:

• Agriculture
• Alcohol
• Aviation
• Firearms, ammunition, and explosives
• Fish and wildlife
• Commercial fisheries
• Mining and drilling
• Nuclear energy
• Radio and television broadcasting
• Transportation

How to get a business license in California: Five easy steps

Now that you have an idea of the types of business licenses that might be required in California, let’s go over how to actually get a business license. If you’re in a rush, here’s the gist of it:   

1. Name your company and form it in California 
2. Apply for a California business tax license 
3. Determine other local licenses applicable to your California business 
4. Apply for any statewide licenses that your business may require in California 
5. Apply for federal licenses and any necessary tax treatment

Let’s get into more detail now. 

1) Name your company and form it in California

First things first: you need to actually have a business to get licensed. To set up a business in California, you need to name it and officially register it with the government. Here are the key steps you’ll need to take to officially get your business up and running:

• Choose a catchy and strategic business name (and confirm it hasn’t already been taken!)
• Decide on your business structure: sole proprietorship, LLC, or corporation 
• Get an Employee Identification Number (EIN) 
• Create a business plan 
• Get insurance 

2) Apply for a California business tax license

On the local level, you’ll need a general business license from whatever city you’re doing business in, including a business tax certificate. You can visit the website of your city or county to find out how to apply. 

3) Determine other local licenses applicable to your California business

As we mentioned before, consult the CalGold site for any industry-specific licenses you may also need. We suggest doing some research and getting in touch with your local government to find out if other city-specific licenses are needed and how to apply for them. 

4) Apply for any statewide licenses that your business may require in California

Next up, apply for the California seller’s permit we talked about before if you plan to sell goods! You can apply online through the California Department of Tax and Fee Administration. 

Certain businesses in California require specific licenses, depending upon their industry, in addition to the seller’s permit. To determine which ones you need and how to apply, check out the CalGold site. 

5) Apply for federal licenses and any necessary tax treatment

The federal licensing you need will also depend on your industry—scroll up for our handy list of industries, which links out to each agency. From the agency websites, you can determine if you need a license and find out how to apply. 

When do you need a business license in California?

In most cases, you will need a business operating license on the city and county levels right from the beginning, unless you’re in a very rural area that’s unincorporated. For instance, if you initially set up shop in Los Angeles, and then decide to base your business in other cities, you’ll need business licenses for each of these cities. 

If your business doesn’t normally sell goods, but will be doing so for a temporary amount of time (for example, for a special seasonal event), you’ll need a temporary seller’s permit, which is valid for up to 90 days at one location.

California Business License FAQs

How much does a California business license cost?

The cost of the local operating license will depend on your location—it can be as low as $15 (sometimes it’s even free!) or as high as a couple hundred. The fee usually needs to be paid whenever you renew your business license, which typically happens annually or biennially. 

Instead of paying a fee, some cities might charge larger businesses a percentage of their annual revenues instead. 

Is a business license required in California if I sell online?

Yes! If you’re operating your online business from California (even if you don’t have a brick-and-mortar location), a business license is still required. 

How do I renew my California business license?

The renewal process will depend on your location and which California business licenses you need, so it’s always best to consult the respective agencies’ websites or contact them directly. The seller’s permit, for example, doesn’t need to be renewed. 

Do LLCs require business licenses in California?

Yup, LLCs are required to obtain the proper business licenses! An LLC is a business structure, not a license. Everything we mentioned in this article applies to LLCs, too. While some licenses will depend on your industry and location, if you're setting up an LLC in California, you will likely need a local operating license at the very least. 

Go get your California business license today!

Now that you have all the facts, all you have to do is determine which licenses you need for your specific situation, and then get out there and get your licensing! 

To sum everything up: 

• On the local level, you’ll almost always need a general business license.
• On the state level, you’ll need a seller’s permit if you’re selling goods.
• Any other licenses you need on the local, state, and federal level will depend on your industry and your location. 

If you still have questions about how to get a business license in California, you can consult Wave’s in-house small business pros who can provide you with personalized, 1-on-1 coaching. No matter what you choose to do, Wave will be cheering you on. Good luck!