Running a small business in California? Then you’ll probably need a state business license.
But here’s the thing: Getting a business license can be complicated because the process varies depending on the city (or county) where you live. And these differences can make it difficult to understand exactly what you need to do to get your business license.
That’s why we did the hard work for you!
We dug through the research on how to apply for a business license in California, as well as where you can find the website to apply in your specific city.
So if you’ve ever had a question on how (or even where) to apply, you’ll find the answer here.
It makes sense that if you operate a business in California, you’ll likely need a business license.
But what if you sell only a few products online from the comfort of your home? What if you freelance or do work on the side?
Even in those cases, you’ll likely still need to apply for a business license in the State of California .
That’s because a license is essential for the state to identify your business, determine your annual taxes, to protect the public, and hold you accountable for any legal claims brought against you.
Without a CA license, your business could potentially be out of compliance in a number of ways. For example, both the city and county governments could:
And that’s just looking at it from the perspective of the government. When it comes to actually running your business, holding a business license can:
Now that you know why you need a business license, let’s get down to what you came here for: the steps you need to get your business license.
When you’re ready to apply for your business license in California, we recommend having the following information at your fingertips:
Having this information at hand ahead of time means you likely won’t be left scrambling to find important paperwork in the middle of your application process.
We also suggest considering applying for your business license on a desktop or laptop computer, as some California city and county websites may not be designed to work on mobile.
In California, business licenses — also sometimes referred to as business tax certificates — are administered at the city level. If you live in an unincorporated area, you’ll likely apply for your business license at the county level.
To find where to apply, visit the California Governor’s Office of Business and Economic Development website. Enter your location and your business type to be taken to the local website where you can apply.
Helpful hint: the website listing you should click on will be listed under Business License — Business Tax Certificate.
Here’s where things get a little different, depending on the city or county where your business is located. Some businesses will be able to apply online, while others must request that a business license application be mailed to them.
Some cities even require that when you receive the application, you must take it and apply in person at the city’s Revenue Division for a business license (looking at you, Hayward)!
Because every city is different, it’s very important to pay attention to the small details.
Each city likely has a different method for determining your business license’s fees. It varies, but CA business license fees are usually based on:
If your business is new or you’re not making enough revenue yet, your CA business license fee could be based on a flat rate (more on this in a bit).
In general, you can expect your business license to be approved by the State of California within 45 days.
If you don’t get approved, don’t worry right away: it could mean you didn’t fill in the correct information or your business needs a specialized license. Call the number on the website where you applied if you have any questions about a rejected application.
Depending on the business license you apply for, your license may last for a day, a quarter, or a full calendar year.
One important note: If you have multiple business locations in different CA cities, you’ll likely need to apply for a separate business license in each city. So depending on how many locations you have, you may need to go through this process a few times.
Some CA cities may require you to have business insurance in order to get your business license.
This is especially true if you’re applying for a speciality license. For example, you’re typically required to show proof of insurance in order to get a California contractors license.
If you don’t have an insurance policy yet, you can use our free quote comparison tool to find policies from insurers who specialize in California business insurance. Just choose the policy you want, and boom — you’re on your way to having that pivotal proof of insurance.
You may need to show proof of business insurance to get your license.
That’s where we come in. Compare free insurance quotes for policies as low as $25.95/month.*Start Here >
CA cities calculate their business license costs in different ways. Usually, you can expect to encounter one of the following two options:
If you’re charged a flat license fee (which usually happens if your business is on the smaller side), you can expect to pay anywhere from $50 to $100, depending on your location.
A business license not only means you’re “official” in the eyes of the state; it also opens up a world of possibilities for you and your business.
After all, having a licensed business means your customers may feel more comfortable working with you. And it also can protect you from being fined or getting into legal trouble for being out of compliance with state requirements in having a license.
So even though the application process may take some time, it’s definitely worth it to get your California business license!
* Monthly payment calculations (i) do not include initial premium down payment and (ii) may vary by state, insurance provider, and nature of your business. Averages based on January - December 2020 data of 10% of our total policies sold.
I love writing about the small business experience because I happen to be a small business owner - I've had a freelance copywriting business for over 10 years. In addition to that, I also head up the content strategy here at Simply Business. Reach out if you have a great idea for an article or just want to say hi!
This content is for general, informational purposes only and is not intended to provide legal, tax, accounting, or financial advice. Please obtain expert advice from industry specific professionals who may better understand your business’s needs. Read our full disclaimer
*Harborway Insurance policies are underwritten by Spinnaker Insurance Company and reinsured by Munich Re, an A+ (Superior) rated insurance carrier by AM Best. Harborway Insurance is a brand name of Harborway Insurance Agency, LLC, a licensed insurance producer in all 50 states and the District of Columbia. California license #6004217.