How to Get a California Business License

Do You Need a Business License in California?

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:

• Administer fines and penalties
• Prevent your business from opening additional locations
• Padlock your existing location
• And more

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:

• Help reassure customers that you’re a trustworthy business
• Give you an air of credibility and professionalism
• Make it easier to market your business
• And more!

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.

How to Get a Business License in California: A Step-By-Step Guide

1. Get your business details in order.

When you’re ready to apply for your business license in California, we recommend having the following information at your fingertips:

• Your business name
• Your Federal Tax ID or EIN, OR
• Your Social Security number (if you’re a sole proprietor)
• Your business entity (sole proprietorship, partnership, LLC, etc.)
• Your personal address and phone number
• Your business’s address and phone number (if different from above)
• Your driver’s license number
• Your seller's permit number, if you sell goods
• Your business plan, including anticipated revenue and expenses
• Your Certificate of Insurance (COI) for your business insurance policy

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.

2. Visit the website of the city in California where you’ll apply for your business license.

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.

3. Follow your city’s specific application instructions.

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.

4. Submit your application and your fee.

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:

• Annual revenue
• Number of employees

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).

5. Expect your CA business license soon.

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.

CA Business License and Insurance Information

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 including CA workers' comp. Just choose the policy you want, and boom — you’re on your way to having that pivotal proof of insurance.

How Much Does a Business License Cost in California?

CA cities calculate their business license costs in different ways. Usually, you can expect to encounter one of the following two options:

• You may be charged a percentage of your annual revenue and number of employees you have; OR
• You will be charged a flat license fee.

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.

Getting Your Business License in California is a Huge First Step

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 - March 2023 data of 10% of our total policies sold.