Legal Question in Business Law in California

Each municipality is different in its approach to business licenses. Some don't require licenses for certain professions, others do. Some have a threshold below which no taxes are due on business earnings, others have a minimum tax. Some encourage new businesses by offering a period of several years when a new business does not pay taxes, some have no taxes at all. For all municipalities, however, business regulations apply only within the actual city limits (i.e. city ordinances that apply to Los Angeles don't apply to West Hollywood or Beverly Hills, for example, where opposite sides of the same street might be in a different city). If you are in an unincorporated part of a county, most likely there are no business regulations since most counties don't regulate businesses. So, as a first step be sure of your locality. Then, take a look at the city's website to see what you can find about business licenses--you should find answers to your questions there.

You don't say what type of royalties you are receiving, or why. It is possible that you don't need a business license if these are passive royalties you receive on a investment or work you did in the past and no longer do. Generally, a business license applies only to an active business or professional that deals with the public. The fact that you're receiving royalties doesn't necessarily mean you have an active business. You may want to speak with a knowledgeable attorney or accountant about your specific situation before you deal with a local bureaucracy.