It is no secret that a tremendous amount of work goes into opening and running a restaurant. One part of it is getting all the proper licenses and permits required to legally open and operate the business in the state, county and city it is located in.
We are providing an overview of some of the most common licenses and permits needed to open a restaurant in California. This is not intended to be a complete list. Some cities and counties may have additional requirements.
Getting Started
Registration with the Secretary of State (SOS)
Depending on the business entity chosen, you may need to register with the Secretary of State (SOS). For example, it is not necessary for sole proprietors to register with SOS, but corporations, limited liability companies, or partnerships must do so. This ensures that your business name complies with the statutory name requirements and the name selected is not already in use by another.
Employer Identification Number (EIN)
Also known as the federal tax identification number, the EIN is used to identify your business and for tax filing purposes. Apply for an EIN through the Internal Revenue Service (IRS).
Fictitious Business Name (FBN) or “Doing Business As” (DBA)
If you intend to operate your business under a different name than its legal name, it is required to file for a fictitious business name or more commonly known as a DBA. This is filed with the city and/or county clerk where the business is located.
Certificate of Occupancy
A certificate of occupancy is issued by your local building or zoning department once they have determined that the restaurant building is safe to occupy and is suitable for its intended use.
California Payroll Tax Account Number
If you plan to hire employees, the payroll tax account number is needed to file and pay payroll taxes. To obtain one, an application must be submitted to the Employment Development Department (EDD).
Necessary for Operation
Business License
The business license, also known as business tax registration, is needed to conduct business within the city and/or county limits. This license is required to be renewed periodically. Requirements may vary depending on location, so it is best to confirm with your local city and county for filing guidelines and frequency.
Seller’s Permit
A seller’s permit is needed to sell food and beverages at your establishment and collect sales tax from customers. To obtain the permit, an application must be submitted to the California Department of Tax and Fee Administration (CDTFA).
Restaurant (Food Facility) Permit
The food facility permit is generally issued by the local public health department or the environmental health division. An inspection may need to be completed to ensure that the building the restaurant is in, and its operations are aligned with health and safety codes before the permit can be issued. There are additional requirements to be completed if you are building a restaurant from the ground or are making any major modifications to an existing restaurant.
Food Safety Certifications and Food Handler’s Card
Restaurant employees are required to take an accredited food safety training course and pass an examination within 30 days from the hire date to receive the food handler’s card. This is necessary to ensure that they have the knowledge of safe food handling and preparation practices. Effective January 1, 2024, employers must cover the cost of the food handler’s card training and must compensate employees for the time spent training and completing the examination.
Other Business Specific Licenses for Consideration
Alcoholic Beverage License
If you are planning on selling alcoholic beverages, the Alcoholic Beverage License must be obtained from the Department of Alcoholic Beverage Control and must be renewed annually. Applying for this license requires a seller’s permit and the entire process can take as long as 90 days. If you are taking over a previous food establishment, you may want to check if there is an existing liquor license that can be transferred instead.
Live Entertainment and Shows Permit
If you are planning to have live entertainment at your establishment regularly such as live bands, shows and other performances, you may need to look into an entertainment/show permit with your city or local police department.
Depending on where your business is located, license and permit requirements will vary. Aspiring restaurant owners in California may refer to the CalGold’s website for more information on the various permits needed to open and operate their business based on its location and which corresponding agencies to reach out to in order to obtain them.
If you have further questions or need assistance regarding the permitting requirements mentioned above, please contact us.
Additional Tools and Sources:
- CalGold Business Permit System
- California Secretary of State “Starting a Business Checklist”
- IRS “Topic no. 755, Employer identification number (EIN) – How to apply”
- California Small Business Advocate (CalOSBA) “Business Quick Start Guide Restaurant, Bakeries, & Bars”
- SB-476 Food safety: food handlers (2023-2024)
- Department of Alcoholic Beverage Control “License Application Process”