How To Get Business License In California: Free Guide 2022

How To Get Business License In California: Free Guide 2022
How to Get a California Business License (1)

Obtaining a California business license can be a daunting experience for business owners; however, you can continue reading through this guide as we inform you about the process of applying for a business license in the state of California and why this is such a crucial step in becoming a legal entity.

Read more: How to Start an LLC in California 2022

Is a California Business License Required?

So let’s talk about whether a California business license is needed. It is important to know that they do not require or offer a statewide business operating license. However, you may still need a California business license at the city or county level in order to operate legally.

There is only one general statewide business license available in California, which is the ‘vendor permit’. So, you will need to secure some type of business license from your local government as a business owner in California.

You must obtain a business license in order to obtain a business tax certificate and collect and pay sales tax. Plus, in addition to the local business license you likely need, you may need others depending on where you are located and what type of business you operate.

It is also important to know that you will need the appropriate licenses for all the different cities and counties in which your business operates.

Different types of business licenses

Now let’s review some of the different types of business licenses that a business entity may need to obtain in the state of California. As a reminder, most businesses in the state will need at least one business license to operate legally, even though they do not have a general state-level business license. So as we go through the different types of business licenses, keep in mind what industry you’re in and where you’re located so you know all the requirements you need to adhere to.

California local business licenses

At the very basic level, the California state licenses you will need include a business operating license, which is sometimes called a ‘business license’ or ‘general license’ and includes a business tax certificate.

Basically, most California counties will require this business license in addition to FBN (fictitious business name) or DBA (doing business as) statements.

Additional licenses include a public health operating license for all restaurants, cafes, fitness facilities and more. Plus, professionals in these fields will need to obtain a certain certification to work within the industry.

California State Licenses

Depending on the industry, you may need a business operating license at the state level rather than just the local level. This includes the sales and use permit, or seller’s permit. This is required for any business that sells or leases tangible property. With that, they have to get a seller’s permit before they can sell again.

Plus, any manufacturer or business that imports or distributes alcohol must obtain the appropriate license with the California Department of Alcoholic Beverage Control and register for the Alcoholic Beverage Tax with the Department of Tax and Tariff Administration.

Federal Licenses and Permits

Small businesses probably don’t need a federal license. However, if you have business activity in the following areas, you may need to obtain specialized permits or licenses.

Such areas include agriculture, alcohol sales, firearms and explosives, commercial fishing, mining and drilling, nuclear power, radio and TV broadcasting, and more. These businesses require licenses at the federal level, not just from the California state board or local county or government agencies.

How to Get a California Business License 2022

How to Get a California Business License (2)

With a better idea of ​​the different California business licenses, local licenses, and federal business licenses you may need, let’s walk through the steps you’ll need to take to get your business license.

Name and form your business in California

First, you need to form your new business, give it a legal business name, and choose the business ownership, business address, or business structure that works best for you. This can include sole proprietorships, limited liability companies, and others, all of which are allowed in California and are two structures that many businesses choose. Be sure to register your business name and address with the California Secretary of State’s office, which will help ensure that there is not already a business with a similar name operating in the same industry or region.

Apply for a Business Tax Certificate

You must first obtain a business tax certificate with your local government in order to pay your annual sales taxes as a business entity, even for small businesses. This step does not require you to have a business plan or projected income yet.

Determine the additional local licenses required

Be sure to submit your business license application to your local government. Most of the time you can get a business license online, although be sure to check with your city or county, like San Diego, to make sure this is possible. There are other permits that you may need from your local government at some point for your business, such as a business and economic development building permit, and others.

Apply for any additional statewide licenses

As we mentioned above, if you have a certain type of business, you may need a business license from the state before you can do business.

Apply for Federal Licenses and Tax Treatment

Again, you may need federal licenses or a seller’s permit based on the type of industry you operate in and how it is federally regulated.

Maintain your California business license

What does the renewal process look like for California business licenses? Are they renewed every year? Given the fact that your state business license application is handled locally, the renewal process can really vary depending on where you live and operate your business. So you may have to pay the fee and renew your license every year or every few years.

2 main business license services

How to Get a California Business License (3)


ZenBusiness is a business formation service known for its affordable pricing and excellent customer service, and has three tiers of plans to help you get started.

Each plan includes an annual report service, an invoicing application, an operating agreement template, an employer identification number, domain and website hosting, and expedited filing service for higher tiers.


Incfile helps you form your business online, including as a sole proprietor, LLC, S-corp, non-profit and more. They have a number of plans available, each of which includes a registered agent and free mailing address for one year.

California Business License Cost

Now let’s go over the cost of a California business license. Given that much of this process is handled locally, the cost of a California business license can really vary depending on where you’re based. Some cities will also waive the fees paid by small businesses.

In general, the cost of a seller’s permit and other related licenses can range from $15 to several hundred dollars.

Final Thoughts

Obtaining a license for your business in California can seem overwhelming to some. However, it doesn’t have to be too complicated, especially given the fact that most businesses can obtain all the required permits locally. Fortunately, the state-run CalGold website helps everyone who owns their own business understand the exact licenses they will need to operate in the state without any guessing games.

The same is not available from the federal government for a federal license, although if you do business in California and are wondering what vendor permit, building permit, or other licenses you will need to sell online, you can check two times on this website. to see what is actually required to conduct business legally.

Frequently Asked Questions (FAQ)

Why do you need a federal tax ID number with the Internal Revenue Service (IRS)?

You need this for tax purposes in order to pay your federal tax obligations, hire employees, track and collect sales tax, and more.

What is a fictitious business name?

A fictitious business name statement is required when the name under which you are doing business does not match the name that is registered with the Secretary of State.

Do I need a California State Business License to operate?

No, you may not need a business license from the state to operate your business. However, you will likely need some sort of licensing, although this will often come at a local level.

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