California Business Licenses and Permits: Filings and Deadlines

Opening a business in California means clearing several agencies that do not talk to each other. The Secretary of State handles entity registration. Counties handle fictitious business names. Cities handle business licenses. The California Department of Tax and Fee Administration handles sales tax permits, the Franchise Tax Board handles income and franchise tax, and the Employment Development Department handles payroll. Each has its own deadline, its own form, and its own penalty for missing it. This reference explains what each one wants, when it wants it, and which filings apply to which kinds of business.

What “business license” means in California

The phrase covers three different things, and readers looking for a California business license are usually looking for the first.

A city or county business tax certificate. Most California cities require any business operating within city limits to register and pay an annual business tax. The authority comes from Cal. Gov. Code § 37101, which lets a city legislative body “license, for revenue and regulation, and fix the license tax upon, every kind of lawful business transacted in the city.” Because the tax is local, the amount, the renewal date, and the application form differ in every city. A business operating in unincorporated territory registers with the county instead. A business with locations in three cities generally holds three certificates.

An occupational or professional license. Contractors, cosmetologists, accountants, real estate agents, security firms, and dozens of other trades hold a license issued by a state board rather than a city. These are regulatory licenses tied to the person or the firm’s qualifications, and a city business tax certificate does not substitute for one.

A permit tied to a specific activity. Selling tangible goods requires a seller’s permit. Serving alcohol requires an ABC license. Handling food requires a county health permit. Building out a storefront requires local planning and building approvals. These attach to what the business does, not to the fact that it exists.

Terms that show up on every California filing

The filings below reuse a small vocabulary. Knowing it makes the forms shorter.

Entity, the legal form the business takes: sole proprietorship, general partnership, limited partnership, limited liability company, or corporation. Sole proprietorships and general partnerships are not registered with the Secretary of State; LLCs, corporations, and limited partnerships are.

Agent for service of process, the person or company designated to receive lawsuits and official notices on the business’s behalf. Every registered California entity names one, and the name and street address appear in the public record. A post office box does not qualify.

Fictitious business name (FBN), a name a business trades under that differs from the owner’s legal name or the registered entity name. Also called a DBA, for “doing business as.”

Statement of Information, the periodic disclosure filing that keeps a registered entity’s officers, address, and agent current with the Secretary of State.

Doing business in California, a tax concept, not a registration concept. An out-of-state company can be “doing business” for Franchise Tax Board purposes, and owe California tax, without ever registering with the Secretary of State.

Good standing, the status of an entity that has filed what it owes and paid what it owes. An entity that lapses can be suspended, which strips its right to sue, defend a lawsuit, or enforce its contracts in California courts.

Choosing and registering the business structure

The structure decision comes first because most later filings ask for it.

A sole proprietorship requires no registration with the state. The owner reports business income on a personal return and is personally liable for business debts. A general partnership works the same way with two or more owners. Neither form files formation documents with the Secretary of State, though both may still need a fictitious business name statement, a city license, and a seller’s permit.

An LLC is formed by filing articles of organization. Under Cal. Corp. Code § 17702.01, one or more organizers form the company by signing and delivering articles of organization to the Secretary of State on the prescribed form. The articles state the company’s name, the street address of its initial principal office, and the name and street address of its initial agent for service of process. Corporations file articles of incorporation instead. Both filings go through the Secretary of State’s business entity forms and filing portal.

A business that trades under a name other than the owner’s surname or the registered entity name files a fictitious business name statement with the county clerk where the business has its principal place of business. Cal. Bus. & Prof. Code § 17910 requires the statement “not later than 40 days from the time the registrant commences to transact such business,” and requires a new statement after any change in the underlying facts. Most counties also require publication in a local newspaper after filing.

Licenses and permits before the doors open

Once the entity exists, the operating approvals come from three directions at once.

The city. The business tax certificate application asks for the business address, the entity type, the owner names, and an estimate of gross receipts or employee count, because most cities compute the tax on one of those. Cities that route applications through a planning department also check zoning before issuing the certificate, which matters for home-based businesses and for any use that draws customers or deliveries to a residential street.

The state board, if the trade is licensed. Construction, personal care, health care, private security, and financial services all sit under boards that license practitioners before they may accept work. License requirements usually include a qualifying exam, proof of experience, a bond, and fingerprinting.

The activity permits. The most common is the seller’s permit. Under Cal. Rev. & Tax. Code § 6066, “every person desiring to engage in or conduct business as a seller within this state shall file with the board an application for a permit for each place of business.” The permit is issued by the California Department of Tax and Fee Administration and costs nothing to obtain, though the agency can require a security deposit. Sellers who operate at one location for 90 days or less register through the CDTFA’s temporary seller’s permit process rather than the standard permit.

A business with several locations files for a permit for each place of business, and a business that expands into a new area adds the location to its existing CDTFA account rather than starting over.

Tax registrations at the state and federal level

Three tax agencies sit behind almost every California business.

The Franchise Tax Board collects the annual tax and the income tax. Every corporation subject to the minimum franchise tax “shall pay annually to the state a minimum franchise tax of eight hundred dollars ($800)” under Cal. Rev. & Tax. Code § 23153(d). LLCs owe the same amount by a different route: Cal. Rev. & Tax. Code § 17941 charges an LLC doing business in California an annual tax equal to the § 23153 amount, and charges it as well to any LLC whose articles of organization have been accepted by the Secretary of State, whether or not the company has opened for business. The FTB’s LLC tax guidance sets the first payment at the 15th day of the fourth month after registration and adds a separate income-based LLC fee that begins at $900 for California income of $250,000 to $499,999 and rises to $11,790 at $5,000,000 or more.

The CDTFA collects sales and use tax from permit holders. Returns are filed monthly, quarterly, or annually depending on the volume of taxable sales the agency assigns at registration.

The IRS issues the employer identification number that banks, payroll providers, and most state agencies ask for. The IRS issues an EIN online at no cost and delivers it immediately on approval, and its EIN application page warns that the application expires after 15 minutes of inactivity and that no fee is ever required. Single-member LLCs and sole proprietors without employees can sometimes use the owner’s Social Security number instead, but an EIN is required once the business hires or elects corporate taxation.

Hiring the first employee

Payroll converts a business into an employer, and the status carries its own registrations and insurance requirements.

Cal. Unemp. Ins. Code § 675 defines an employer as an employing unit that has one or more employees and “pays wages for employment in excess of one hundred dollars ($100) during any calendar quarter.” Once that threshold is crossed, Cal. Unemp. Ins. Code § 1086 requires the employing unit to register with the Employment Development Department “within 15 days after becoming an employer.” Registration opens a payroll tax account covering unemployment insurance, employment training tax, state disability insurance, and personal income tax withholding. The EDD’s employer payroll tax guidance walks through the account setup and the new-hire reporting that follows.

Workers’ compensation coverage is separate and is not optional. Cal. Lab. Code § 3700 requires every employer except the state to secure payment of compensation, either by buying insurance from a carrier authorized to write compensation insurance in California or by obtaining a certificate of consent to self-insure from the Director of Industrial Relations. Operating with employees and no coverage exposes the business to stop-work orders and penalties, and to direct liability for an injured worker’s claim.

Classification questions surface at the same moment. Whether a worker is an employee or an independent contractor determines payroll registration, workers’ compensation, wage-and-hour obligations, and tax withholding, and California applies a statutory test rather than deferring to what the parties wrote in a contract.

Staying in good standing after the first year

The filings that keep a business alive are less visible than the ones that start it, and they are the ones most often missed.

The Statement of Information. Cal. Corp. Code § 17702.09 requires every California LLC and every registered foreign LLC to deliver a statement of information to the Secretary of State “within 90 days after the filing of its original articles of organization” and biennially after that. The statement lists the entity name and file number, the agent for service of process and that agent’s street address, and the street address of the principal office. Corporations file on an annual cycle instead. The Secretary of State’s Statements of Information filing page carries the current filing windows and online access requirements. Missing the filing draws a $250 penalty that the Franchise Tax Board collects on the Secretary of State’s behalf, according to the FTB’s entity guidance.

The local renewal. City business tax certificates renew annually, and most cities key the renewal to the anniversary of the original certificate rather than to the calendar year.

The tax calendar. The $800 annual tax under Cal. Rev. & Tax. Code § 17941 is due on the 15th day of the fourth month of each taxable year, sales tax returns run on the schedule the CDTFA assigns, and payroll deposits follow the EDD’s deposit schedule.

Suspension and revival. An entity that stops filing or stops paying can be suspended by the Franchise Tax Board or the Secretary of State. A suspended entity loses the right to use its name, to sue or defend in California courts, and to enforce contracts it signed while suspended. Revival requires filing the delinquent returns, paying the balance with penalties, and obtaining a certificate of revivor.

Common situations that break the standard sequence

Home-based businesses. Zoning rules, not licensing rules, are usually the constraint. Many cities issue a home occupation permit alongside the business tax certificate and limit customer traffic, signage, employee count, and commercial vehicle parking.

Out-of-state companies selling into California. Registering with the Secretary of State and “doing business” for tax purposes are separate questions. A company can owe the $800 minimum tax under Cal. Rev. & Tax. Code § 23153 based on California sales, property, or payroll without having filed anything with the Secretary of State, and a company that does register as a foreign entity picks up the Statement of Information obligation as well.

Online sellers with no storefront. A seller’s permit still applies. Cal. Rev. & Tax. Code § 6066 reaches every person conducting business as a seller in the state, and the CDTFA treats the address from which the business operates as a place of business for permit purposes.

Buying an existing business. Sales tax liability can follow the business to the buyer unless the buyer obtains a certificate of tax clearance from the CDTFA before the purchase closes. Licenses and permits generally do not transfer with the sale; the buyer applies in its own name.

Specific procedures and topics