What Are the Consequences of Not Having a Business License in California?

Learn about the consequences of not having a business license in California and how to obtain one.

What Are the Consequences of Not Having a Business License in California?

Failure to obtain a business license is a violation of Title 7 of the Los Angeles County Code and a misdemeanor. Continued failure to comply with Title 7 requirements will result in fines and potential legal action. A company caught operating without a license could be forced to stop operating. In some cases, once licenses are obtained, the company is free to reopen.

But in some cases, a company may have to wait for a mandatory probationary period, or worse, a city may refuse to grant a license to the company. Not having a business license can have serious consequences, as it can put your credibility at stake and expose you to financial penalties. The consequences of not having a business license in California can be severe. If you are caught operating without one, you could be forced to cease operations and face hefty fines.

In some cases, you may even have to wait for a probationary period before being allowed to reopen. Fortunately, obtaining a California business license is relatively straightforward. You can access CalGold online to find the right licensing office for your location and type of business. Once you have identified your licensing office, fill out and submit an application for a business license.

The California Government Online to Desktops offers CalGold Business Permit Assistance, which is a database of regulated industries. In the City of Santa Monica, all businesses must obtain a business license regardless of whether they make a profit or not. To renew your Santa Monica business license, you will need your current business license renewal notice, your Santa Monica gross receipts for the period indicated in your renewal notice, payment, and any supplemental forms submitted with your renewal notice. Small businesses represent 99.8% of all businesses within the state and employ 48.8% of the state's workforce, making them an integral part of the Golden State economy. Business license taxes are based on the tax rate associated with the assigned business classification (see Ratings & tax rates). In California, most businesses need to obtain a business license at the county or city level for tax purposes. If your company carries out activities regulated by the federal government, you will need to apply for the appropriate license or business permit.

A company is included in this list only after repeated attempts to collect the debt or to bring the company into compliance with the requirements have not been successful. Any person or business renting, leasing, or subletting residential space must obtain a business license regardless of the number of units. States, counties and municipalities apply sales and use taxes to California businesses on transactions. A person who is an employee and whose compensation is reported on a federal Form W-2 is not in business and is not required to obtain a business license.