Opening a Business in California:
Obtaining Required Permits.
California requires a host of different permits for those doing business in the state. Many new business owners are confronted with a vast array of licenses, permits and regulations that can be intimidating and confusing to anyone. But there are resources available, especially on the internet, to help you through this process.
The most common permit required is a seller's permit, obtained from the California Board of Equalization (BOE). This permit allows you to do sales of goods in the state and requires your business to collect sales taxes from customers to cover any sales tax owed to the state. The taxes are paid annually, quarterly, or monthly, depending on the business sales volume. If you sell goods to the public, you will need a seller's permit whether or not those goods will be taxable. This would include any grocery stores, department stores, gift shops, convenience stores, shops of any kind with products for sale. It also includes on-line sales located in California.
On the other hand, services are not taxable in California and therefore businesses that only provide services are not required to obtain a seller's permit. This would include most architectural firms, engineers, lawyers, doctors, computer repairmen, etc. Construction contractors who actually sell products such as custom furniture or windows and doors must charge a sales tax.
One obtains a seller's permit by submitting the appropriate application to the Board of Equalization. A sole proprietor or partnership use Form BOE-400-MIP; LLCs and corporations use Form BOE-400-MCO. You can use one application to obtain a seller's permit for all of your locations where you sell goods.
Many businesses require additional permits from the state. For example, the state of California regulates many businesses. Obviously many service occupations such as doctors, nurses, physical therapists, lawyers, engineers, architects and construction contractors are licensed occupations requiring certain qualifications and usually passing an examination to get a license. Other examples of businesses which require state permits are bars and nightclubs, auto repair shops, locksmiths and waste management companies. The federal government requires permits for such things as operating a trucking company, operating a radio or television station, manufacturing food, alcohol or drugs, or making or selling firearms.
Local governments often regulate businesses as well. City zoning laws dictate which activities are allowed in particular locations. If your type of business is not consistent with the zoning for the location, you will either need to get a permit known as a conditional use permit, or be granted a variance allowing you to be exempted from the zoning rules. You should contact your city or county planning department to determine whether your business complies with local zoning.
There is CalGold website in California which provides a comprehensive list of all the government requirements for specific businesses. This site is a good starting place for any business to determine which permits and licenses are necessary for your type of business.
If you are considering starting a business, I advise you to go to this site, enter your business type and location, you will be find a list (often a long list) of the licenses and permits you will need from the federal, state and local government. The bureaucratic requirements can be somewhat overwhelming, but with some persistence, it can be done.
As an example, according to this website, someone wishing to operate an auto body repair shop in San Francisco needs to consider the following requirements, among others:
- Building Inspection and Alteration Permits
Permits for modifying the physical space of your business.
- Business Property Statement
Businesses may be required to report all equipment, fixtures, supplies, and leasehold improvements held for business use based on at cost and/or value.
- Business Tax Registration
All businesses are required to register for a Business Tax Registration Certificate.
- Fictitious Business Name
You must file a fictitious business name, unless you use your own personal name for the business.
- Fire Department Permit
For public assemblies, garages, storage, service stations, theaters, hazardous chemicals or gases.
- Hazardous Materials/Waste Program
Subject to business plan and/or accidental release program through local CUPA or designated city/county agency if handling any hazardous materials, generating or treating hazardous waste, storing in above ground or underground storage tanks.
- Industrial Wastewater Discharge Permit
May be required if a facility discharges a hazardous material into the sewer.
Contact each of the following departments to determine if you need a city business license. No license will be issued until a permit is granted by the appropriate regulatory Permit Agency.
City/County of San Francisco
- Zoning and Planning
Your business location must be checked to determine if it is zoned for your type of business. This also applies to businesses operating from a residence.
Contact City of San Francisco Planning and Zoning.
- Authority to Construct/Permit to Operate
Situations for which a permit application must be submitted include but are not limited to: construction or installation of new equipment that may cause air pollution; modification of existing permitted equipment; transfer of equipment from one location to another; installation of abatement equipment used to control emissions.
Contact Bay Area Air Quality Management District Permit Services.
- Air Tanks Permit
Required of all businesses using (1) pressurized tanks with a volume greater than 1.5 cubic feet and containing greater than 150 PSI (pounds per square inch) of air; (2) Steam boilers over 15 PSI; or (3) retail stationary propane tanks.
Contact Department of Industrial Relations Pressure Vessel Unit-North.
- Automobile Repair Dealer Registration
Required of any person or entity that performs automotive repairs, including mobile mechanics.
Contact Department of Consumer Affairs Bureau of Automotive Repair.
- Industrial Activities Storm Water General Permit
National Pollutant Discharge Elimination System (NPDES) General Permit No. CAS000001 includes waste discharge requirements for discharges of storm water associated with industrial activities, excluding construction activities.
Contact Cal/EPA Water Resources Control Board.
- Occupational Safety and Health Information
Businesses with employees must prepare an Injury and Illness Prevention Plan. The state provides a no-fee consultation service to assist employers with preventing unsafe working conditions and workplace hazards.
Contact Department of Industrial Relations Cal/OSHA.
- Registration Form for Employers
Required to file a registration form within 15 days after paying more than $100.00 in wages to one or more employees. No distinction is made between full-time and part-time or permanent and temporary employees in meeting this requirement.
Contact Employment Development Department Employment Tax Customer Service Office.
- State EPA Identification Number
Required of businesses that generate, surrender to be transported, transport, treat, or dispose of hazardous wast.
Contact Department of Toxic Substances Control Generator Information Services.
- Wage/Hour Laws
Businesses with employees must comply with laws establishing minimum standards for wages, hours and working conditions.
Contact Department of Industrial Relations Labor Standards Enforcement.
- Waste Discharge Requirements (WDR's)
Any facility or activity that discharges, or proposes to discharge, waste that may affect groundwater quality or from which waste may be discharged in a diffused manner (e.g., erosion from soil disturbance) must first obtain waste discharge requirements.
Contact Cal/EPA Water Resources Control Board.
- Workers' Compensation Information
Businesses with employees must maintain Workers' Compensation Insurance coverage on either a self-insured basis, or provided through a commercial carrier, or the State Workers' Compensation Insurance Fund.
Contact Department of Industrial Relations Division of Workers' Compensation.