From trucking company permits to food permits to licenses to serve alcohol, a business needs to have the licenses and permits it needs to be properly controlled and regulated. California business licenses include a business operating license as well as industry-specific licenses that may be needed to start operating. Here’s what you need to know about getting a license for your business before your business opens its doors.
Steps to Learning About Business Licenses & Permits in California
- Business License Definition
- Types of Business Licenses
- How Much is a Business License?
- How to Get a Business License
- Other Resources to Getting a Business License in California
- Final Thoughts on How to Obtain a Business License
A “business license” is one of two things:
- A general operating license, provided by the state. This is a license that defines the business and its structure, and provides general information about the business and its primary contacts.
- Any license or permit needed by the business to begin operating. This can be one of literally dozens of licenses and permits, depending on the company’s size, structure, and industry.
A company is going to need multiple business licenses and permits to operate, but it usually starts with its general operating license.
Just forming a business isn’t enough to get an operating license. Forming a business is usually done with the help of a lawyer, and it outlines how the business operates, how it will make money, and who is in control of the business. But this doesn’t register the business with the state. Registering the business with the state is what gets it a license to operate.
The business licenses that a company needs is going to be defined based on what the business does and what industry the business is in. Examples of business licenses include:
- Commercial transportation licenses. These licenses are necessary for trucking and transport companies, as they need to license their individual commercial vehicles, and they need to maintain contacts in the states that they transport in.
- Food service licenses. Food companies need to be knowledgeable about food-related regulations, and need to follow laws regarding how food is stored and prepared.
- Alcohol serving licenses. Bars, lounges, and even restaurants need alcohol serving licenses if they want to serve wine, beer, and alcohol. A company will need to make sure that it’s adhering to all liquor laws and regulations in their area.
- Childcare licenses. Childcare professionals or individuals who run a childcare on sight are going to need licenses and permits to do so, along with having employees acquire a license for childcare themselves.
Restaurants might need food and alcohol licenses to begin serving either, while some businesses (such as services industry businesses) may only need a business operating license. Starting to do business before acquiring these licenses can lead to significant fines and penalties, or even criminal charges depending.
A business license will usually be between $50 to $100 in California. There’s no specific cost because it varies based on jurisdiction in California: your costs are going to be determined based on where you’re located.
That’s a basic business operating license. But that’s not the only license you will need, as noted. Other licenses can cost in the thousands. Food service and alcohol-related licenses tend to be expensive, because they are highly regulated, and because they require inspections and approvals.
It’s a good idea to find out the costs of all your relevant permits and licenses before you commit to opening a business. These permits and licenses usually need to be renewed on an annual basis, so these costs will recur.
In California, there are resources that will tell you which permits and licenses you need. You can enter in your business type online, and get a list of the permits that are relevant to you.
Here’s the general process for getting a business license:
- Find out which regulations and licensing bureaus apply to your business.
- Organize your business-related documents.
- Submit applications with the relative licensing and permit bureaus.
- Wait for the applications to be processed.
- Keep your license active.
When it comes to licenses such as alcohol licenses, there can be some substantial waiting lists. Sometimes it may take months to get an alcohol license approved, so you should begin this process as early as possible.
Business operating licenses are usually processed fairly quickly. But you will need all your licenses and permits to legally begin operating within the state.
When trying to get a business license for your state, there are two primary resources you can use: a business lawyer and the Small Business Administration.
To structure your company, you can go through a lawyer or an online business service. Online business services specialize in helping people form a business from scratch.
You can also connect with the SBA. The SBA often has information regarding what a business needs to do to follow all the applicable regulations, including licenses and permits.
Obtaining an operating license for your business is usually a simple process, but it does come with some potential complications. There are additional licenses and permits you will often need, and you need to be knowledgeable about which licenses and permits you should try to acquire.
Since acquiring a license can take some time, it’s in your best interest to start the process as quickly as possible. Begin by getting your business officially structured and incorporated. Once your business documents have been drafted, you can begin applying for the relevant licenses and permits.
Remember that most licenses and permits have standards you need to follow and that they need to be regularly updated and renewed. A lawyer can help you go through your requirements.
After you get a business license, consider getting your federal employer ID number and your state ID number as well. These will let you pay your taxes, hire employees, open business bank accounts, get business loans, and more. With a business license, business documents, and an employer ID number, most businesses will at least begin operating.