A California business license is a local or state authorization that some businesses need before they can legally operate.
California is the largest state economy in the US, with $4.25 trillion in gross domestic product as of 2025, according to the state’s Department of Finance. The Golden State’s economy is so large that if California were a separate country, it would rank among the five largest economies in the world.
If you’re looking to become one of California’s more than 4.3 million small businesses, this guide contains information on how to get started, including whether you need a California business license.
Do you need a California business license?
There is no state-level general business license in California, but many businesses must register with the California Secretary of State’s office. If you sell goods subject to sales tax, you’ll also need a California seller’s permit.
California businesses need certain licenses and permits based on their location and business type. On the local level, many California cities and counties mandate a business license, sometimes called a business tax certificate, to operate, in addition to zoning permits, building permits, and other municipal-level requirements.
Certain regulated professions like food service and health care, as well as those dealing with regulated products like alcohol and firearms, require an additional business operating license. These could be on the municipal, state, or federal level.
The Governor’s Office of Business and Economic Development created a database called CalGOLD, which business owners use to identify the permits and licenses their business needs. Users enter their city or county, and their business type, and CalGOLD generates a list of applicable local, state, and federal requirements.
“You may not need a business license if you live in an unincorporated area and the county does not require it,” says California-based small business attorney Elizabeth Potts Weinstein. “Many counties only license certain types of businesses, like those selling alcohol or food.”
Types of business licenses in California
California business licensing works across three levels:
- State registration and seller’s permit
- City and county requirements
- Specialized state and federal requirements
State registration and seller’s permit
When starting a business in California, you’ll first choose the appropriate business structure (such as an LLC or a partnership) and register your company with the California Secretary of State’s office.
Sole proprietorships don’t need to register with the state, though they do need to file with their county if they choose an assumed business name.
Note that this registration establishes your business entity and isn’t a general business license.
If your company sells or rents tangible goods subject to sales tax when sold at retail, you’ll also need a California seller’s permit, regulated by the California Department of Tax and Fee Administration (CDTFA).
This requirement applies to wholesalers and manufacturers in addition to retailers, as well as temporary or seasonal businesses like a fireworks booth or Christmas tree lot.
Skipping state registration as a sole proprietor doesn’t exempt a business from local requirements since most local governments require a business license, obtained from the city if the business is in an incorporated city, or from the county if it’s in an unincorporated area.
City and county requirements
Many cities and counties in California require general business licenses. Several other local licenses or permits apply depending on the jurisdiction and business type, including fire inspections, environmental compliance for waste disposal, and building permits.
Check CalGOLD for details specific to your location and business type.
Many cities also require a separate home occupation permit for businesses operated from a residence, issued by the city or county planning department, in addition to a business license.
Requirements vary by jurisdiction, for example:
- San Ramon prohibits home occupation businesses from receiving client visits at the residence.
- Santa Rosa allows certain home businesses to employ up to two non-resident employees under a special home occupation permit.
Some cities also exclude specific business types, such as auto repair shops or animal boarding, from operating as a home occupation.
Specialized state and federal requirements
Both state and federal laws require specific business licenses and permits for certain regulated industries. Bars must obtain an alcoholic beverage license and tax permits, for example, while restaurants undergo public health inspections. Many industries and professions, like lawyers, contractors, and health care providers, require occupational licenses.
In California, any contracting work valued at $1,000 or more in combined labor and materials requires a license from the Contractors State License Board (CSLB). Below that threshold, a license is still required if the work needs a permit or involves hired employees.
CalGOLD includes information about state requirements, while the US Small Business Administration (SBA) maintains a list of regulated professions that need federal business licenses. If you’re unsure, seek advice from expert resources like small business associations, municipal employees, chambers of commerce, and lawyers.
How to get a business license in California
Getting a business license in California takes six general steps, from determining your business structure to renewing your registration and licenses.
Requirements vary by business type and jurisdiction, but here’s the process most businesses follow:
- Determine your business structure
- Register your company
- Research local requirements
- Obtain seller’s permit and business tax certificate
- Meet other specialized state and federal requirements
- Renew registration and licenses
1. Determine your business structure
Start by identifying the appropriate structure for your business:
- Sole proprietorship. In a sole proprietorship, a single individual owns the business and is legally responsible for everything related to it, including debts, losses, and liabilities. This business entity is the simplest structure and, unlike other business structures, doesn’t require registration with the state (though it does need to file a fictitious business name statement locally if it operates under an assumed name).
- Partnership. Partnerships come in different forms. A general partnership (GP) involves two or more parties who share responsibility for the company’s profits and liabilities. In California, limited liability partnerships (LLPs) are limited to licensed professionals, for example, lawyers, architects, and accountants.
- Limited liability company (LLC). A limited liability company (LLC) is a more complicated legal structure than a sole proprietorship or partnership. It separates the owner’s personal assets from their business dealings, providing the owners with personal liability protection.
- Corporation. Similar to an LLC, a corporation is a separate legal entity that shields the owners from the corporation’s debts and legal actions against it. Corporations have more formal structure and strict management rules, and are also subject to different taxation rules.
2. Register your company
Next, you must register your business with California’s Secretary of State office (unless you’re a sole proprietor). Forms and filing fees vary depending on your business’s structure.
For an LLC, you file Articles of Organization (Form LLC-1) with the Secretary of State through the BizFile Online portal, for a $70 filing fee. Within 90 days of formation, you must also file a Statement of Information (Form LLC-12), for a $20 filing fee, and refile it every two years afterward.
Any business that is a partnership, multimember LLC, or corporation, or that pays employees, also needs an employer identification number (EIN), obtained from the Internal Revenue Service (IRS). EINs are free, and you should never pay a fee to obtain one.
An EIN is also part of what Shopify Payments uses to verify US businesses registered as legal entities.
3. Research local requirements
Next, find out if you need a general license in your jurisdiction. Businesses located in an incorporated city obtain their license from that city; businesses in an unincorporated area obtain it from the county. In Los Angeles, for example, businesses register for a Business Tax Registration Certificate through the city’s Office of Finance.
Check your city’s municipal website first, or your local county if you live in an unincorporated area. “In some places a business license is called a ‘tax certificate’ or ‘business registration,’ so keep an eye out for that language,” Elizabeth says.
“The application can usually be done online or via email, but if you are confused, the best solution is to go down to the city hall business department and get help in person. Typically, they will also have an email address and phone number that you can use to get questions answered.”
CalGOLD is another valuable resource, and you only need to answer two questions: the city or county where you’re located, and the type of business you run. The site will list necessary permits, business operating licenses, and also the contact information for the relevant agencies.
Local mandates include general requirements for any business in the jurisdiction, such as zoning compliance and building permits, and fees vary widely.
“It very much depends on the town; the fees range from tens to hundreds of dollars, and the paperwork can range from just filing out some online forms to multiple pages of detailed requirements, including floor plans,” Elizabeth says.
4. Obtain seller’s permit and business tax certificate
If you sell or lease tangible goods subject to sales tax, you’ll apply for a California seller’s permit through the CDTFA. Municipalities also require a business tax certificate that lets you operate in that jurisdiction.
- To register, create an account through the CDTFA’s online services portal and select Register a New Business Activity.
- Provide identifying information, such as a driver’s license or state ID number and Social Security number, along with business bank account details and expected average monthly sales.
A seller’s permit doesn’t cost anything, but some business activities require the owner to place a security deposit, according to the state’s tax office.
Business tax certificate requirements and the agency that issues them vary by city.
Here’s where to apply in California’s largest jurisdictions:
| City | Issuing agency | Local name |
|---|---|---|
| Los Angeles | Office of Finance | Business Tax Registration Certificate |
| San Diego | Office of the City Treasurer, Business Tax Program | Business Tax Certificate |
| San Jose | Finance Department | Business Tax Certificate |
| San Francisco | Office of the Treasurer & Tax Collector | Business Registration Certificate |
| Fresno | Finance Department | Business Tax Certificate |
| Sacramento | Revenue Division | Business Operations Tax |
Once you have your seller’s permit number, add it to your Shopify tax settings. Shopify requires a registered sales tax ID for a state before Shopify Tax calculates and collects tax there at checkout.
5. Meet other specialized state and federal requirements
Several occupations and business activities require a business operating license, permits, or certifications from state agencies or industry boards. Restaurants, for example, need health permits and often seek liquor licenses, and certain business activities like health care and cosmetology require industry licensing.
The US Small Business Administration provides a list of federally regulated professions and the entities that issue the appropriate business license.
Additionally, all businesses must post the state’s anti-harassment and discrimination notice, and those with five or more employees must maintain personnel records for a minimum of four years.
Note that business activities regulated by a US federal agency require a federal business license or permit, as listed by the SBA. If you work in an industry that isn’t regulated by the federal government, this step does not apply.
6. Renew registration and licenses
California business licenses, registrations, and permits must be periodically renewed. Renewal cycles vary by license and jurisdiction. Many are annual or every two years, but check specifics with the appropriate licensing office to ensure you remain in compliance.
How much does a business license cost in California?
Costs vary by business structure, location, and industry. Most California businesses pay a combination of state filing fees, local fees, and any industry-specific permit costs.
State filing fees
LLCs pay $70 to file Articles of Organization with the Secretary of State, plus $20 for a Statement of Information due within 90 days of formation and every two years after.
Businesses operating under a name other than their legal name file a Fictitious Business Name statement (also called a DBA) with their county clerk, which costs roughly $20 to $60, depending on the county, plus newspaper publication costs of $35 to $200 (which aid in transparency about the business). This filing is valid for five years.
Local business tax certificates
Fees vary widely by city. For instance, around $24 in Fresno, and higher fees that scale with revenue or employee count in larger cities like Los Angeles and San Diego. Some cities offer free or reduced-cost registration for qualifying small businesses. San Francisco’s First Year Free program, for example, waives initial registration and permit fees for eligible new businesses.
Seller’s permit
A California seller’s permit from the CDTFA is free to obtain, though the agency requires a security deposit from certain business types based on expected taxable sales (or if the business has a history of nonpayment or previous compliance violations).
Industry-specific permits
Industry-specific permits carry their own costs. Contractors, for example, pay a $450 application fee plus a $200 to $350 license fee and must maintain a $25,000 license bond through the Contractors State License Board.
Renewals
Most licenses, permits, and registrations require periodic renewal. Many city business tax certificates renew annually, and the LLC Statement of Information renews every two years. Fictitious Business Name statements renew every five years.
Non-compliance risk
Operating without a required license or permit carries real risk. Unlicensed contracting in California, for example, is a misdemeanor carrying civil penalties from $1,500 to $15,000 per violation, and cities assess fines and back taxes on businesses operating without a required local business tax certificate.
Note: This article provides general information and isn’t a substitute for legal or tax advice. Costs, fees, and requirements change and vary by jurisdiction; confirm current requirements with the relevant state or local agency, or consult a licensed attorney or accountant, before making business decisions.
How to look up a business license in California
California doesn’t have one central database covering every type of business license, so verifying a specific license depends on which one you’re checking. Three main lookup surfaces cover most cases.
The CDTFA’s online verification tool checks whether a business holds a valid seller’s permit, cigarette and tobacco retailer’s license, or eWaste account. Search using the seller’s permit number, or the business’s legal name and street address, and the tool returns the permit’s current status.
The California Secretary of State’s BizFile Online lets you search registered business entities by name or entity number. Results show the entity’s status, whether it’s active, suspended, or forfeited, along with its formation date and registered agent. BizFile Online covers corporations, LLCs, limited partnerships, and registered limited liability partnerships; it doesn’t cover sole proprietorships or county-filed fictitious business name statements, which fall outside the Secretary of State’s records.
For local business tax certificates and permits, there’s no single statewide lookup. Contact the relevant city or county directly. Most municipal finance or treasurer departments maintain their own business registration records and confirm whether a specific business holds a current local license. CalGOLD lists the contact information for the agency responsible for a given business type and location, making it a starting point for finding the right office to call.
Together, these three surfaces cover different pieces of the picture including state tax registration, state entity status, and local licensing. Checking a business across all three gives the fullest view of its compliance standing.
California business license FAQ
How much does it cost to have a business license in California?
Business license costs in California vary based on business structure, location, and industry. Local business tax certificates can cost around $24 in places like Fresno, while larger cities like Los Angeles have fees that scale with revenue or employee count. LLCs pay $70 to register with the state, plus additional fees for a Statement of Information. Industry-specific permits, like a contractor’s license, add further costs.
Do you have to pay the $800 California LLC fee every year?
Yes. Every California LLC owes an $800 minimum annual franchise tax to the Franchise Tax Board, regardless of income, starting with its first tax year. A temporary first-year exemption applied to LLCs formed between January 1, 2021, and December 31, 2023, but that exemption has expired; LLCs formed since January 1, 2024 owe the $800 tax from year one onward.
Do I need a business license if I have an LLC in California?
Yes. Registering an LLC with the California Secretary of State establishes your legal entity, but it isn’t a business license. Most California businesses, including LLCs, still need a local business license or tax certificate from the city or county where they operate, plus any state or federal permits their industry requires.
How often do you need to renew your business license in California?
Renewal frequency depends on the license and jurisdiction. Most local business tax certificates renew annually, though the exact date varies. San Francisco’s Business Registration Certificate, for example, renews each year by May 31. State-level filings follow different cycles; the LLC Statement of Information, for instance, renews every two years. Check with the issuing agency for your specific renewal date.
Do you need a business license in California to sell online?
Yes, you need a business license in California to sell online. Local business license requirements are based on your business’s location, not whether you sell online or in person. Even if your company operates entirely online, you need a local business license from your city or county, plus a California seller’s permit if you sell taxable goods, along with any other state or federal requirements that apply to your business.
