A GUIDE TO OPENING A BUSINESS, Part 4: Obtaining Necessary Permits

A GUIDE TO OPENING A BUSINESS, Part 4

By Christopher A. Kerosky, Esq.

This is the fourth segment in a series of articles I’ve written on the process of starting and managing a business in California.  This is intended to provide the reader with a step-by step guide through the primary tasks necessary to legally register your business and start operations in this state.

This segment is on obtaining necessary permits to open your business..

Overview.

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 one 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.  The website address is www.calgold.ca.gov.

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. 

Here are a few examples of the permits needed and where to get them in Sonoma County:

Building Inspection and Alteration Permits: Permits for modifying the physical space of your business,  contact County of Sonoma Department of Building Inspection

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,

contact County of Sonoma Assessors Office

Business Tax Registration: All businesses are required to register for a Business Tax Registration Certificate, Contact County of Sonoma Treasurer Tax Collector

Fictitious Business Name: You must file a fictitious business name, unless you use your own personal name for the business: Contact County Clerk's Office, Treasurer-Tax Collector

Fire Department Permit: For public assemblies, garages, storage, service stations, theaters, hazardous chemicals or gases,  contact County of Sonoma Fire Department

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 County of Sonoma Planning and Zoning

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 state Employment Development Department Employment Tax Customer Service Office

Wage/Hour Laws: Businesses with employees must comply with laws establishing minimum standards for wages, hours and working conditions,  contact State Department of Industrial Relations Labor Standards Enforcement

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 State Department of Industrial Relations Division of Workers' Compensation