How to Get a Business License in California: Step-by-Step Guide

California has a population of just over 39 million, making it a preferred destination for startups and businesses looking to expand.¹ There are currently 4.2 million small businesses operating in the state, and the government regulates them carefully.

If you want to do business in California, you may need a business license. This article explains how to get one.

How to get a business license in California: Step-by-step

Step 1: Determine your business structure

You'll need to establish your business entity before you can apply for a business license. California recognizes sole proprietorships, partnerships, limited liability companies (LLCs), and corporations. Each structure has different licensing requirements and tax implications, so have your attorneys research the subject carefully before you move forward.

Individuals operating as sole proprietors under their legal name may not need to register with the state. If you do business under a different name, you may need to register a DBA (doing business as) with the county clerk’s office. A simple phone call to their office should tell you whether you need to do that. You could also check their website, if they have one.

Step 2: Check if you need a state business license

Many businesses can operate in California without a business license, but certain industries are heavily regulated. Examples are accounting, real estate, healthcare, and legal services. The common denominator with these is the handling of other people’s finances. Licensing is also required for companies that request personally identifiable information (PII).

Businesses dealing with alcohol, firearms, or hazardous materials need specialized permits at the state and federal levels. You can check the California Business Portal to see the license requirements for your business. It’s also best practice to hire an attorney to handle legal and compliance matters. Managing those in-house is not recommended.

Step 3: Research local licensing requirements

California has fifty-eight counties and hundreds of municipalities. Each has its own regulations and guidelines. This is an important point because getting a state business license to operate in California might not be sufficient. County and local jurisdictions might require local registration. Check into that before you open the doors so you don’t run afoul of those requirements.

Local taxes are another issue. Los Angeles requires a business tax registration certificate, while San Francisco mandates a business registration certificate. Small cities may have simpler requirements, but rural areas sometimes have stricter zoning restrictions. Contact your local city clerk's office or check their website for specific requirements in your area.

Step 4: Obtain required permits and certifications

Some businesses require additional permits on top of basic business licenses. This is not unique to California. Examples of these permits include the following:

• Building permits for physical modifications
• Signage permits for exterior business signs
• Health permits for food service businesses
• Fire department permits for businesses with public access
• Environmental permits for businesses affecting air or water quality

Each permit has its own application process, fees, and approval timeline. Plan accordingly, as some permits can take several weeks or months to process.

Step 5: Complete the application process

Most counties and municipalities in California have online application systems, so you won’t need to wait in line. You will need the following information to apply:

• Business name and type
• Physical address and mailing address
• Contact information
• Number of employees
• Estimated annual revenue
• Federal Employer Identification Number (EIN)

Take your time while you’re filling out the application. Double-check all your entries for accuracy. Even a small mistake could result in a denial that will cost you valuable time.

Step 6: Pay the required fees and await approval

Be prepared for a range of different fees for each license or permit you apply for. Some will be flat fees. Others will be based on factors like business size, revenue, or number of employees. Payment is typically required at the time of application. Processing times could be anywhere from a few days to several weeks, depending on the complexity of your business.

Ideally, you’ll want all applications processed and approved before you start doing business in California, but it could be tempting to open sooner. Submitting applications far in advance of your move is the best way to avoid that. If you run into a delay, opening before approval could result in heavy fines, penalties, and possibly a denial of a state business license.

What to consider if you have an international business

Non-US citizens can obtain a business license in California with a federal taxpayer identification number (TIN) if they don’t have a Social Security number. Foreign entities, whether domestic or international, need to register with the California Secretary of State. Check with them before you start because some professional licenses require citizenship.

Domestic businesses exporting goods to other countries might need an import/export license, but that does not exempt them from getting a state or local business license. E-commerce and service businesses may not need the import/export license, but they are required to get a business license and permits relative to their industry.

How much does it cost to get a business license in California?

It costs under $50 to get a state business license for a simple home-based business. More complex businesses requiring multiple permits will pay significantly more, possibly several thousand dollars. Professional licenses typically cost between $200 and $500 per year. That includes real estate licenses and contractor licenses.

Most basic city business licenses cost between $25-$400 annually. Los Angeles charges a minimum of $34 for home-based businesses, while San Francisco's basic business registration starts at $91. Counties charge separate fees ranging from $25-$200. Most business licenses require annual renewal, so factor ongoing costs into your business planning.

How to get a copy of my business license in California

Counties and municipalities will usually issue a copy of your business license if you request it. There may or may not be a fee. Contact the issuing body for more information about that. Certified copies of state licensing can be obtained from the California Business Portal for a small fee of $5 to $25. Non-certified copies are typically free.

Streamline your business finances with Wise Business

Having the right financial infrastructure can simplify your accounting and save you significant money on exchange rates and transfer fees. That’s essential for California businesses operating over international borders. Getting a business license is just the first step. Properly structuring your finances comes next.

Wise is not a bank, but a Money Services Business (MSB) provider and a smart alternative to banks. The Wise Business account is designed with international business in mind, and makes it easy to send, hold, and manage business funds in 40+ currencies. You can get major currency account details for a one-off fee to receive overseas payments like a local. You can also send money to 140+ countries.

Open a Wise Business account online

	Editor & Business Expert:
	Panna is an expert in US business finance, covering topics from invoicing to international expansion. She creates guides and reviews to help businesses save time and make informed decisions. You can read more useful business articles on her author profile.

	Author:
	Kevin D. Flynn is a retired financial professional, business coach, and financial writer. He lives in Leominster, Massachusetts with his wife Evelyn, two cats, and ten wonderful grandchildren. When he’s not working, you’ll find him at the golf course or on his back porch reading classic sci-fi novels.

Sources

1. California's Population - Public Policy Institute of California