California Consulting & Freelance Business: Licenses and Permits

California doesn't generally tax services or require a license for consulting. The big issues are worker classification and the $800 annual LLC tax.

Last reviewed September 26, 2026

Client contracts

  • Sign contracts in the LLC's name, and sign as a member or manager — not personally — to protect your liability shield.
  • Cover scope, deliverables, fees, payment terms, late fees, and who owns the work product (intellectual property).
  • Include limitation of liability, confidentiality, termination, and how disputes will be resolved.
  • If you hire other freelancers, California's ABC test (AB5) makes it hard to treat them as independent contractors.
  • Licensed professions (such as accounting, engineering, and law) need a license from the relevant California board.

Professional insurance

  • Professional liability (errors and omissions) covers claims that your work or advice caused a client financial loss. Many clients require it.
  • General liability covers injuries or property damage, such as at a client's office.
  • Cyber liability matters if you handle client data or systems.
  • Workers' comp is required in California once you have even one employee.

Invoicing

  • California generally doesn't charge sales tax on services.
  • Every California LLC owes the $800 minimum annual franchise tax, plus an extra LLC fee if gross receipts reach $250,000.
  • Some cities, like Los Angeles and San Francisco, charge business taxes based on gross receipts.
  • Put your LLC name, invoice number, dates, services, amounts, and any sales tax (as a separate line) on each invoice.
  • Keep invoices and tax records organized — states can audit several years back.

These are California state and federal requirements. Cities and counties often add their own. Requirements and fees change — confirm with the agency before you apply. This is general information, not legal or tax advice.

Other California Business Types

Consulting / Freelance Requirements in Other States

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Important Information

This website provides general educational information and tools for business owners. It is not a law firm, accounting firm, tax adviser, financial adviser, or government agency.

Information can change, and requirements vary based on business activities and individual circumstances.

Verify filing requirements, fees, deadlines, licenses, permits, and tax obligations with the appropriate government agency or a qualified professional before acting.