So I filed my Articles of Organization with the CA Secretary of State last month, got my LLC approved. Thought that was it. Then I get a notice from the city saying I need a business license and pay a fee. Why are these two things separate? I already paid the state $70, now the city wants $150. Is this normal? Do I really need both?
Licensing
Why is my California business license separate from my LLC registration?
Yep, totally normal. The state registration just creates the legal entity. The city license is for operating in that city. Two separate jurisdictions.
Wait until you find out about the county and the state seller's permit if you sell goods. It's a real party.
Because California loves fees. That's why.
The LLC registration is at the state level, but the business license is usually city or county. They serve different purposes. The state cares about liability and corporate structure. The city cares about zoning, safety, and tax revenue. You'll likely need a license for each location if you have multiple. And yes, the fees are a pan, but they're separate.
Don't forget your annual $800 minimum franchise tax to the state. That's the real kicker.
So is the business license like a permit to actually operate? If I'm an online business with no physical location, do I still need one? I'm in a similar boat.
Depends on the city. Some require it even for home-based or online businesses. You typically get it from the city where your primary office is located. If you're working from home, that's usually the city you need to check with.
I just paid mine last week. City of LA sent a letter and I ignored it for two months. They didn't care, just charged me a late fee. ugh.
It's a money grab, plain and simple. But you gotta pay if you want to do business. Not much choice.
Actually, there is a bit more nuance. Some cities have a business license that's basically just a tax, while others have actuaal permits for specific activities. But yeah, for a generic LLC, it's usually just a fee.
I've had my LLC for 10 years and only once got asked for a business license by a client. Might depend on your industry.
What industry are you in, SunsetSurfer88? That might clear things up.
I just got my business license in San Diego. It was $40 for the year. $150 seems high. Maybe you're in a bigger city?
LA city is notorious for high fees. If you're in LA, $150 is probably about right. And they'll hit you with a renewal every year.
Also, the business license is often required to open a bank account or get certain permits. It's just another hoop. But it's not optional if your city requires it. Best to pay and move on.