A crucial step in starting a limited liability company (LLC) in California is acquiring all the licenses and permits required for your business. Depending on your industry and location, you may require licenses and permits at the federal, state, and local levels.
And without them, you could face major business hurdles and penalties. This guide provides all you need to know to ensure you’re in full compliance in California.
Which Department Issues Business Licenses and Permits?
In most states, several agencies and departments issue licenses and permits depending on the type of business. For example, the California Department of Tax and Fee Administration issues most licenses, although the California Department of Public Health issues a good number.
The California Department of Tax and Fee Administration issues sales tax permits. You can apply online at their website.
At the county and municipal levels, various departments issue licenses and permits. Check with your local governments for requirements.
Federally, different departments oversee different industries. As a result, licenses and permits are generally industry-specific, except for health permits from the Occupational Safety and Health Administration (OSHA).
If you run a farm, the U.S. Department of Agriculture may require licenses and permits for your business.
You must register with the Bureau of Alcohol, Tobacco, Firearms, and Explosives if your business sells fireworks. Most industries, however, do not require licensing at the federal level.
The Small Business Association (SBA) has put together a handy guide that details which licenses and permits are needed for various types of businesses.
Common Business Licenses and Permits
Here are some common licenses and permits you may need:
If a federal agency regulates your industry, you must be licensed by that agency. Some examples of federal agencies that require licensing include:
- Department of Agriculture
- Alcohol and Tobacco Tax and Trade Bureau
- Bureau of Alcohol, Tobacco, Firearms, and Explosives
- Department of Transportation
Some standard licenses you may need at the state level include:
- Industry-specific licenses for certain professions and industries, such as construction, plumbing, electrical, childcare, food handling, liquor, architecture, and finance
- Health licenses and permits
- Doing business as (DBA) permits using a name other than your LLC.
- Sales tax permit
At the municipal or county level, you may need licenses or permits, including:
- Building and zoning permits
- Health licenses and permits
- Fire permits
- Sign permits
How to Obtain a Business License in California
In California, a general business license is not required.
- Unless you’re operating as a sole proprietorship or partnership, you must register your business entity with the state, usually as an LLC or a corporation.
You can do so online with the Secretary of State.
- You’ll have to register for sales tax with the Department of Tax and Fee Administration if you sell goods or services.
- Other specific licenses can be applied for with specific departments. For example, if you have a restaurant business in California, you must have a retail food program service license through the Department of Public Health.
- Check with your local governments for licenses and permits you may need locally.
How Much Does a Business License Cost in California?
A sales tax permit costs nothing in California, while forming an LLC costs nothing. The LLC formation fee is $70 when done online. A retail food program service license costs $207.
Do Licenses and Permits Have to Be Renewed?
Some licenses and permits must be renewed annually. However, a sales tax permit in California does not have to be renewed.
Check with issuing departments for renewal requirements for other licenses and permits.
Obtaining licenses and permits is a critical step when starting an LLC in California, so check with state and local government offices and fully comply with their requirements. If you operate without the proper licenses and permits, you could face steep fines or even the closure of your business.
If you’re unsure of state or local regulations and need help, consult a business attorney, as proper licensing is an absolute must.