Dear Attorney Cheng, recently I opened up my business in the San Gabriel
Valley. I have a very popular SAT school. I went to my accountant and
incorporated my business. After 6 months of doing business i was told
by my city that I did not get proper licensing and they would shut me
down if I did not get it within 6 weeks. I am totally confused. I thought
I was doing things legally. Can you please help?
The SAT School Incorporating a business is only one of the many steps one
needs to take in tarting a business like a SAT school. Every city across
the U.S. also requires a business owner to obtain a business license.
A business license essentially is an annual tax required of all businesses.
It must be obtained prior to conducting any business, profession, trade,
or occupation. To obtain a business license, one must complete an application
and pay a license tax. The amount of tax varies from city to city. For
example, the City of Walnut charges the base fee of $45 plus an additional
amount determined by the number of employees. Home businesses are not
exempt from the requirements. Once the business license application is
filed and the tax paid, a business license tax certificate is issued by
the city. This certificate is generally referred to as the “business
license”. This license does not serve to regulate the competence
or integrity of a business. It is simply an evidence of the fact that
your business has compiled with payment of the municipal business license
tax. Remember that this is an annual tax. For new businesses, the business
license tax must be paid prior to commencement of any business activities.
Once established, each business must renew its business license annually
prior to its expiration. Failure to do so may result in penalties. To
apply for your business license, simply contact your local city hall.
In the city of Walnut, a business that is located within our city limits
must also get approval from both the Planning and the Building and Safety
Department before the business license application can be processed. The
Planning Department determines whether the proposed location is zoned
for that type of business. The Building and Safety Department determines
whether the structure is safe and ready for occupancy. Your SAT school
is a good example of why these departments need to review the application.
After all, the safety and welfare of your students should be your top
priority. In addition, most businesses will also need to comply with requirements
imposed by various County and State agencies. This may include the County
Health Department, County Clerk’s Office, the California State Board
of Equalization, the Contractors State License Board, and the State Department
of Alcohol Beverage Control.
Operating a business without a valid business license is a violation of
municipal code. Cities do enforce such code. I would strongly suggest
that you contact your local officials immediately to resolve the situation.
Call Attorney Paul Cheng for more information on this topic and to receive the representation you need!