You’d think it would be simple: your business entity is registered with the State, so you’re good to go. But here’s a catch that’s tripping up many business owners—resulting in penalty notices they never expected.

If your entity lists a city as its headquarters, you need a business license in that city—even if you don’t actually “work” there.

That includes situations like:

• Forming an LLC or corporation and using a corporate mailbox (UPS Store, PO Box with a street address, etc.) as your HQ address.
• Filing your Statement of Information with the Secretary of State showing a city you don’t physically operate in.
• Assuming your “real” place of work or remote office counts, when the official paperwork says otherwise.

Cities regularly cross-check Secretary of State records. If your HQ address is in their jurisdiction, they’ll expect you to hold a business license there. If you don’t, you may get hit with late fees, penalties, or even a citation.

But that’s only one common trap. Here are a few more mistakes business owners make when it comes to licensing:

1. Waiting Until After Signing a Lease

Many owners treat the business license as the last step—after they’ve signed a lease, invested in improvements, and put up signage. The problem? Cities may deny your license if your intended use isn’t allowed under zoning rules. That could leave you paying rent for space you can’t legally use.

Pro tip: Always confirm zoning and permitted use with your city’s Planning or Economic Development office before signing a lease.

2. Assuming One License Covers Every City

If you’re doing business in more than one city, you may need multiple licenses. For example, a contractor headquartered in Lomita but regularly working in Torrance and Gardena may be required to hold licenses in all three cities.

Rule of thumb: If you’re selling, operating, or maintaining a location in a city, you likely need a license there—even if your HQ is somewhere else.

3. Overlooking Online vs. Physical Presence

If you’re simply shipping goods into a city from outside, you generally don’t need that city’s business license. But if you open a storefront, warehouse, or office—or regularly perform services there—you do.

Check directly with the city business license division before you start operations.

4. Forgetting to Update Records

If you move your HQ but don’t update your address with the Secretary of State, you’ll still be flagged by the city that shows on your old filings. That can lead to surprise notices and fees.

Update both your Secretary of State records and notify the appropriate city offices when you relocate.

5. Ignoring Notices

Penalties snowball quickly if you let notices sit. Even if you believe the city made a mistake, respond promptly to clear things up.

Bottom Line

A business license isn’t just a formality. You may need one in your HQ city and in any city where you actively do business. Before you sign a lease, open your doors, or expand to a new market, always check with your local city hall, business license division, or planning department.

But here’s the bigger picture: your business license is just one piece of the compliance puzzle. The way you set up your entity, negotiate your lease, and draft your contracts all play a role in whether you can legally—and profitably—operate your business.

That’s where legal guidance comes in.

Need Help Protecting Your Business?

Making sure you have the right licenses is only part of protecting your investment. A business attorney can help you:

• Review leases before you sign, so zoning or use restrictions don’t block your plans.
• Align your entity setup with licensing and tax requirements.
• Ensure your contracts protect you if compliance issues arise.

If you’re starting a new business, expanding to a new city, or preparing to sign a lease, now is the time to get it right. Contact our office to schedule a consultation or call 310.545.7700 and protect your business from costly surprises.

Not sure if your business is properly licensed in your city?
A conversation can help you identify potential gaps before they become costly.
Contact Chase Law Group for help

WWW.CHASELAWMB.COM
310-545-7700

_{Please note that this article is for informational purposes only and should not be considered legal advice and does constitute an attorney-client relationship. It is recommended to consult with an attorney directly for specific guidance pertaining to your business and its practices.}