Learn how to get a business license in California with this easy guide. Step-by-step help for startups, freelancers, and more.
I had a lot of ideas and enthusiasm when I chose to establish my own digital marketing business in California, but I had no idea what business licenses were. I recall looking at my laptop at 2 a.m. and anxiously Googling “Do I need a business licence in California?” while drinking cold coffee and praying the answer would miraculously be “no.”
Spoiler alert: it wasn’t.
So if you’re here and typing that same thing into your search box, you’re already ahead of where I was. And lucky for you, I’ve done the hard work for you, and I’m going to explain it all in simple terms, just like I wish someone had done for me.
Whether you’re just getting started or even planning to eventually sell your business, understanding the licensing process is a foundational step. Let’s talk about what a California business licence truly implies, how to get one without going crazy, and all the minor things that no one tells you but should.
Article Breakdown
First, what is a business licence in California?
A California business licence is like a permission slip from your city or county. It allows the city (or county) to know that you’re running a business and enables them to keep an eye on, tax, and control what you do. Pretty normal things.
But here’s the twist that most people don’t get: California doesn’t have a single business licence for the whole state. The rules depend on what you’re doing and where you’re doing it. If you don’t know where to start, getting a business licence in California can be complex. The business licence system in California is more like a patchwork than a real system.
Each local government, like your city or county, provides its own licenses and makes its own laws instead of having one central office. That’s why so many people look up “how to get a business licence in California” and wind up with a lot of wrong information.
Who in California Needs a Business License?
The quick answer is that most businesses do.
Even if you’re
- a self-employed professional working from home,
- Selling things on eBay or Etsy
- Being the owner of an LLC or a sole proprietorship
- A consultant who works part-time and makes a few thousand dollars a year
you probably still need a business licence in California from the city or county where your business is located (which is usually your home address). The requirements for a business licence in California vary depending on where your firm is located, what kind of service or product you offer, and how you run your business.
This is what occurred to me: I thought I didn’t require a licence because I worked just online and didn’t sell anything physical. A big mistake. I had to file my taxes late since I didn’t have a city business licence.
If you’re not sure, you should always check with your local city hall or licensing office. Always. California requires that even firms that work from home have the right licenses.
Step-by-Step: How to Get a Business License in California (Without the Stress)
Let’s walk through the process the way I wish someone had walked me through it.
Step 1: Choose Your Business Structure
Before you get a license, you need to define what your business is legally. Are you a:
- Sole Proprietor (easiest and cheapest, but no legal protection)
- LLC (more protection, costs more)
- Corporation (ideal for startups with big growth plans)
I went the LLC route, mostly for the legal protection and ease of setup. It wasn’t super expensive, and I slept better knowing I had a barrier between my personal and business finances.
Tip: You can file an LLC directly through the California Secretary of State’s site. It takes about 1, 2 weeks and costs $70 (plus an $800 annual franchise tax, which is California being… California).
Step 2: If you need to, register a fake business name.
You must file a Fictitious Business Name (FBN) or Doing Business As (DBA) if you’re operating under a name that isn’t your legal name (for instance, “Kelly’s Coffee Co.” instead of “Kelly Thompson”).
You bring this to the clerk’s office in your county. You can now do this online in most counties. It costs between $40 and $60 and just takes a few days.
Step 3: Get a business licence in your area
This is the main point. You apply through your county or city, not the state. Here’s how:
Find the licensing authorities in your area:
Search for “business licence California” on your city’s official website. For instance:
- Los Angeles: https://finance.lacity.org
- Business license for San Francisco: https://sftreasurer.org/business-license
You will travel through your county instead if you live in an unincorporated region (not in the city borders). This is when it’s incredibly important to know about all the different business licenses in California because each location has its own requirements.
Please fill out the application:
You’ll need to give:
- Name and address of the business
- Contact information for the owner
- What kind of business do you do?
- Number for Social Security or Federal Tax
- Estimated total income
If you work from home, they might ask for zoning clearance or home occupancy permits.
Pay the fee:
The cost of a business licence depends on the location and the sort of business, but it can be anywhere from $50 to $500. Some towns charge you based on how much they think you’ll make.
It cost me $85 to file in Pasadena, plus a tiny processing fee. Not bad, because some acquaintances in San Francisco were paying more than $300 just to apply for a California company licence.
Step 4: Look for any special permits or state licenses.
You might need the following, depending on what kind of business you have:
- A Seller’s Permit (if you sell physical goods)
- A Health Permit (for food-related businesses)
- A Contractor’s License
- A Resale Certificate
You can check licensing requirements by industry on CalGold, California’s business license wizard.
It’s an underrated tool. Bookmark it. If you’re still confused about how to get a business license in California, CalGold is often the easiest starting point.
Step 5: Get Your EIN (Federal Employer Identification Number)
Even if you don’t have employees, getting an EIN from the IRS is smart. It’s like a Social Security number for your business, and many cities will ask for it on your license app.
You can apply online for free at irs.gov. It takes 10 minutes.
Step 6: Display or Renew Your License
Once approved, you’ll get a business license certificate. Most cities want you to display it at your place of business, even if that’s your home.
Business licenses usually need to be renewed annually, with a renewal fee that’s often lower than the first year’s. Missing a renewal can mean fines or cancellation of your business California license, so set a calendar reminder!
Real-Life Example: Freelancing in Santa Monica
Let’s say you’re a graphic designer working from your apartment in Santa Monica.
- You register an LLC with the state.
- You file a DBA: “Sunset Pixel Design.”
- You go to the City of Santa Monica’s website and apply for a business license in California as a “Home-Based Professional Service.”
- You pay the fee (~$75).
- You renew each year and stay in good standing.
Simple, right? It gets easier once you understand the moving pieces.
What Happens If You Don’t Get a License?
Short answer: fines, back fees, and headaches.
I’ve seen business owners get hit with retroactive licensing fees, penalties, and in extreme cases, cease-and-desist letters from their city. Not fun.
And trust me, when tax season rolls around, your city might check business income filings and match them to licenses issued. So skipping this step could come back to bite you.
Tools and Resources to Make Life Easier
Here are some resources that helped me a ton:
- CalGold.ca.gov: Helps you find local and industry-specific license info.
- California Secretary of State: To file LLCs and corporations.
- Your local city website: Most have business license California pages now.
- LegalZoom / Incfile / ZenBusiness: If you want help filing your license and business formation paperwork.
FAQs About California Business Licenses
Q: Can I get a business license in California online?
Yes, most cities offer online applications now. Some still require in-person or mailed forms, but they’re becoming rare.
Q: What is the cost of obtaining a business license in California?
It varies! $50, $150 is common for basic services, but it can go higher depending on your business type and location.
Q: What is the time frame for getting a business license?
Anywhere from 1 day to 2 weeks, depending on how fast your city processes it.
Q: Is a business license required for running a business from home?
Almost always, yes. You may also need a Home Occupation Permit to ensure you’re not violating any zoning laws.
Q: What if I do business in multiple cities?
You may need multiple business licenses in California if you regularly operate in more than one city.
Key Taking:
- I won’t lie, getting a business license in California isn’t the most thrilling part of launching your dream. But it’s essential, and once it’s done, it gives you peace of mind.
- I remember the day my official license arrived in the mail. It was just a piece of paper, really. But to me? It felt like the moment I stopped dreaming about owning a business and actually became a business owner.
- If you’re on this journey, I’m cheering for you. And now, at least, you’ve got a clear path forward, and maybe a little less coffee at 2 a.m.
Additional Resources:
- California Secretary of State , Starting a Business: The official starting point for forming your business entity (LLC, Corporation, etc.). This site walks you through business registration before worrying about licenses or permits.
- CalGOLD , California Business License & Permit Search: A powerful tool by the state that helps you find specific local and state licensing requirements based on your business type and location (city or county).
- California Department of Tax and Fee Administration (CDTFA) , Seller’s Permit: If you’re selling goods or taxable services, you’ll likely need a seller’s permit. This is where you register for it, and it’s completely free.
