Q: Am I going to receive a business license anytime soon?
Thank you to a customer from California for the question! You don’t automatically receive a business license when you register your company. In fact, even though they are required in most states, business licenses usually aren’t part of the business formation process with the Secretary of State. Instead, you’ll need a license or permit authorizing you to do business in a specific location or industry. How long it takes to receive this authorization will vary based on the issuing organization. Here’s what you need to know about getting a business license in The Golden State:
What is a California Business License?
In general, a business license is a type of authorization that allows your company to do business in a particular area, or in a specific industry. There is no single, state-issued business license in California. However, your business will probably need to obtain some form of license, permit or registration to legally operate in the state. The exact type of approval you’ll need will depend upon your industry and location.
Is a seller’s permit the same as a business permit?
No. A seller’s permit is a document issued by the California Department of Tax and Fee Administration (CDTFA) to collect state sales tax. You can find more information on the CDTFA’s Obtaining a Seller’s Permit page.
Why do I need to license my business in California?
There are a variety of reasons why a business might need a business license—or several. For one thing, local business licenses are often issued municipal finance departments to help jurisdictions collect business taxes. What’s more, if you own the building that houses your business, you will probably need to get it inspected, and obtain a license or permit allowing you to operate.
How can I find out what licenses I’ll need to obtain for my business in California?
Business licenses are typically issued by local municipalities for tax purposes. However, depending on your business operations, you may also be required to obtain local licenses or permits for health and/or safety reasons. To find out what license(s) your business will have to apply for, you can use the state’s online search tool: CalGOLD.
What is a professional license?
A professional license is a type of authorization issued to people in specific industries who are qualified to perform a professional service by having met specific, industry-related criteria. Such industries include:
- Engineering
- Law
- Medicine
- Psychiatry
That list is not exhaustive. To learn more about licensing for professional services, visit the California Department of Consumer Affairs.
What other organizations should I contact to register my business in California?
If you conduct sales in California, you will probably need additional authorizations from the state. A good source for additional information is the Commonly Requested Information Contacts page from the Governor’s Office of Economic Development.
For more information about business licenses in general, see Northwest’s page: How to Get a Business License.