How to Start a Driving School in CA: A Step-by-Step Guide

Here you’ll learn everything you need to start your Driving School in CA

California has the largest number of drivers–and therefore of new drivers–of any state in the United States. California allows private driving schools to help those new drivers learn how to drive.

California has a distinct procedure for establishing school, but that procedure is pretty straightforward, and the state DMV provides a very clear explanation of what you have to do to to start a driving school in the state. Most of the forms are in pbf format which can be completed on your computer and then printed for submission.

How to open your driving school in CA

• California requires both classroom learning (driver education) and behind-the-wheel training (driver training) for new teen drivers.
• Driving schools in CA require an owner, an operator, and at least one instructor—and the same person may fill all roles.
• Each role requires a separate license and application package.
• You will need to submit your lesson plan (curriculum) as part of the license application package.
• Becoming a driving school operator or instructor in CA requires passing a state examination.
• CA driver education requires 25 hours in the classroom.
• The State of California provides many forms for setting up a small business, but in many cases need to be submitted by mail.

Driving Schools in CA

Driving schools in California are licensed to provide either or both of driver education and driver training. Driver education is classroom time, and the curriculum is largely defined by the State. Driver training is laboratory training, using both behind-the-wheel and in-car observation time.

Driver Education and Driver Training

California makes a clear distinction between driver education and driver training.

Driver education refers to the classroom learning students are required to take–1500 hours total over 30 50-minute class periods.

Driver training refers to any instruction which takes place in a vehicle, whether behind-the-wheel or observation time.

Driving School Roles

The CA driving school structure is organized around three distinct roles–who may all be the same or different people with the driving school. Each of these roles requires a separate license.. They are:

• The driving school owner, who engages in the business of driving education and driving training.
• The driving school operator, who is either a driving school owner operating their own driving school or an employee of the driving school designated by the owner to direct and manage the school.
• The driving instructor, who is an employee of a driving school who is licensed to provide driver education and driver training.

One other provision in California law allows for an “independent driving instructor” to provide instruction in a city with a population less than 40,000 in a county less than 400,000, and the city cannot have an established licensed driving school it it. The independent driving instructor must be certified to teach driver education or training under the Education code. We will not be spending much time on these independent driving instructors.

Student licenses

Driving schools may issue Student Licenses to students who are at least 15 years old who are taking a course in driver training approved by the State.

The school needs to apply to issue Student Licenses, using form OL 804, and must have at least one employee who can administer eye examinations. Driving instructors should all sign the application form, if they are going to be signing the Student Licenses.

Background Investigations

Driving school owners, operators, and instructors will all undergo background investigations before licenses are issued.

The DMV may refuse to issue a license to anyone who has committed a crime or act of moral turpitude which also relates to the duties required by the license.

License Requirements and Forms

You must meet all the requirements for each of the roles you will fill in your driving school in CA. In this section, the form number will be noted in parenthesis, and that number will have a link sending you to the form on the California DVM page containing the form. Most of the forms can be completed on your computer, and then printed.

One key document for you is the California Driving School Program Handbook, which provides a lot more detail on all of these requirements.

Driving School Owner

To be an owner of a driving school, you must make sure that you have everything ready to go when you apply to the DMV. You will need to do the following things–as noted on the state’s checklist (OL 222):

• File the application (OL 216) and pay the fees–$150 for the application, $70 for each additional branch, and $1 for the Family Support Fee.
• Submit your Personal History Questionnaire (OL 29b)–for you and everyone listed as an owner on OL 216–as well as a copy of your Request for Live Scan fingerprinting (DMV 8016) indicated that you have completed the LiveScan.
• Submit the Surety Bond (OL 218) OR a Deposit Agreement (OL 25E) and Payee Data Record (STD 204).
• Provide the certification of your compliance with the state Worker’s Compensation laws (OL 4002).
• Complete the form appointing the Director of the DMV as the agent for service of process for all people named as owners in OL 216–the main application (ADM 9050).
• Have a place of business open to the public, as discussed in Premises, later on in this document.
• Either meet the requirements to be a driving school operator, or have an employee who meets these requirements.
• Submit a certificate of insurance (OL 207)
• Supply a Safety Inspection Report (OL 221) for each vehicle you will be using–the inspections must be completed at a facility licensed by the Bureau of Automotive Repair.

You will also need to provide additional documentation, including

The DMV’s letter which approves your lesson plan or authorizes you to use a previously approved lesson plan.

• If you are incorporated, a copy of your SI 550 filed with the California Secretary of State.
• If you are a Limited Liability Company, a copy of your LLC 12 filed with the California Secretary of State.
• Copies of your lease, rental agreement, or proof of ownership of the premises.
• A copy of your fictitious name statement, but if your surname is part of your business name, you do not need to submit this form.
• A copy of your Business License, Certificate of Occupancy, or Tax Certificate, if any or all of these are required by your city or county.

If you plan to operate a classroom at a location other than your business office, you will also need to complete Form OL 140, which is completed by your local zoning agency. You will also need to submit OL 226, modifying your license for classroom only purposes.

In addition, you will need to submit photographs of your office, sign, and location. the photographs must clearly show your places of business.

• 2 Office Photos, one from front-to-back, the other from back-to-front, booth showing the side walls.
• 1 Sign photo, showing that it is visible from 50 feet (ideally).
• 1 Location photograph–showing the exterior.

Receiving a licence to be the Owner of a driving school does not give you the right to provide instruction.

If you are going to be the Operator of the school, you must also submit the Operator application–or designate an operator.

Insurance Coverage for Driving School

You must maintain the following minimum coverages for any one accident on your vehicles:

• $150,000 for bodily injury to or death of one person.
• $300,000 for bodily injury to or death of two or more people.
• $50,000 for property damage.

Driving School Operator

Driving school operators manage the daily business of the driving school in CA. As you prepare your application package for your operator’s license, referring to the checklist (OL 225) will be helpful. Your application packet should include the following:

• Complete the application form (OL 217) and submit the required fees–$101 plus $15 for each additional branch.
• A Personal History questionnaire (OL 29B).  
• A copy of your completed LiveScan fingerprinting form (DMV 8016).
• Proof that you have completed the Driving School Operator Written Examination.
• Proof that you have fulfilled the required hours for behind-the-wheel driver training–2,000 hours if employed by a licensed California driving school, or 1,000 hours teaching in a public school– if certified by the California Department of Education to teach driving education and driver training.
• If you are teaching motorcycle driving exclusively, the requirement is 300 hours.
• Proof that you are at least 21 years old.

Receiving a Driving school operator’s license does not permit you to provide driving instruction in California–a driving instructor’s license is required.

Driving School Operator Examination

The exam the driving school operator must pass covers a range of topics. You must pass within 3 attempts, or you must begin the application process all over again.

The exam covers:

• Traffic laws
• Safe driving practices
• Motor vehicle operation
• Knowledge of  teaching methods and techniques, especially when teaching minors.
• Driving school regulations and procedures

A physical examination of the premises is also required.

Driving School Instructor License

Driving instructors provide the instruction to new drivers. The application process is relatively straightforward.  The Driving Instructor checklist (OL 219) will help you complete your application, as well as help any prospective employees you might hire. The instructor application packet includes:

• A completed application form (OL 161) and fees–$31.
• A certification that you have read and understood the applicable laws and regulations (OL 203).
• A Physician’s Health Report (DL 546A) — if you have a valid DL 51 on file (because you provide CDL instruction or are a firefighter, you do not need to file the DL 546A).
• A copy of your completed LiveScan fingerprinting form (DMV 8016).

California requires also that you provide proof that you’ve met a number of additional qualifications. These include:

• Successfully completion of the Driving School Instructor written examination.
• Completion of a college-level course in the teaching of driver education and driver training.
• Demonstration that you’ve graduated from High School.

Driving School Instructor Examination and Course

The CA Driving Instructor examination covers much of the same material as the Operator’s exam. Topics covered include:

• Traffic laws
• Safe driving practices
• Motor vehicle operation
• Knowledge of teaching methods and techniques
• First aid
• Regulations regarding teaching driver education and training to minors.

The course requires 60 hours to take. 40 of those hours are in the classroom, while 20 are behind-the-wheel. The course may be offered by private driving schools in CA.

Premises

You must maintain an “established place of business” to run a driving school in CA, although you may have classroom space at a separate location. If you run several types of business, they must be kept physically separate from the driving school business.

You may use hotel rooms as well as rooms in your house or apartment for your driving school, but the room must be exclusively dedicated to the driving school, be located on the ground floor, and have an entrance to the exterior. Your established place of business must meet the following requirements:

• Be at least 500 feet from any building used by the California DMV.
• Provide proper vehicles which have a dual brake for the instructor as well as an inside right rear view mirror.
• Your sign must be visible from fifty feet from where it is posted on the exterior of your building, and it must include the address if the address isn’t already on the building. If you can’t place a sign visible from fifty feet, then it must be visible from the nearest public entrance.
• If you can’t place a sign on the exterior of the building, you must have a sign near your office entrance door as well as the lobby directory listing of your driving school.

The Driving School Curriculum in California

Forms needed

To run your driving school, you will need a number of forms, all of which can be ordered from the CA DMV. The forms you focus on are the certificates of completion of the different stages of driving instruction. The forms are:

• DL 400B–Certificate of Completion of Driver Education, DMV Licensed Driving School.  This form covers the classroom portion only.
• OL 400D–Certificate of Completion of Behind-the Wheel Training–which covers the 6 hours required.

These forms are available in books of 100, and the DMV expects you to order the quantity you expect to use over 12 months. You must use the DMV order form, which also allows you to order Student Licenses if you choose to issue them–these books of 25 cost $50 per book.

Driver Education (Classroom time)

California mandates all of the curriculum for every driving school, both for the in-class as well as the behind-the-wheel portions of driver’s education.  As you prepare your curriculum, keep the following factors in mind.

• You must provide 1500 minutes of total instruction, organized into at least 30 50-minute periods–you may take 5-10 minute breaks between periods.
• Each student may be receive a maximum of 7 hours of instruction per day.
• You must use at least 5 contemporary films or videos. Your curriculum must list them, along with a short description. No more ahn 180 minutes of your course may be devoted to video time.
• You must use contemporary textbooks.
• The lesson plan/curriculum you submit must be detailed enough that the DMV can review the course. Include anticipated times, and the DMV should be able to determine (a) the subject covered in a given lesson, (b) why it needs to be covered, (c) how it will be covered, and (d) when in the sequence it is covered.  Make sure that most of your course is original to you.
• The DMV does not want you to rely on students reading with no guidance. You should plan for a variety of learning activities, including lecture, films and discussion, reading, tests and review, guest speakers, demonstration, and topic discussion.
• Online driver education must match the classroom experience as much as possible.

The CA Driver Education Lesson Plan (which many would call a curriculum) outlines the topics to be covered, as well as the recommended time per topic. Your driving school’s driver education course should be organized around the following areas or units:

• Driving is a responsibility/the driver 4 hours
• Natural forces affecting driving 2 hours
• Signs, signals, markings, and the rules of the road 7 hours
• Major causes of accidents 3 hours
• Differences in urban and rural driving 2 hours
• Critical vehicle systems 2 hours
• Pedestrian safety .5 hour
• Effects of alcohol and drugs and substance abuse 4.5 hours
• Motorcycle safety .5 hour
• Driving experience and road rage 2.5 hours

The outline CA provides for Driver Education is a good foundation for a driving school classroom curriculum. You will have to demonstrate that you are current in the field by selecting contemporary films and textbooks, as well as provide strong learning activities for your students.

Preparing the curriculum will probably be the most time consuming task you have before your doors open, but it’s creative–it will form the foundation of your teaching.

Driver Training (Behind-the-Wheel)

All new drivers under 18 must receive 6 hours of behind-the-wheel driver training with a professional driving instructor–either at their school or through your driving school

Observation time does not count towards these 6 hours. You are free to plan your driver training as you see fit, but no student may receive more than 2 hours per day. Some secondary schools offer more than 6 hours of driver training, and the excess hours may count towards the 50 hours of supervised driving time.

The DMV is not clear whether the 6 hours of Driver Training counts towards that 50-hour requirement. It is best, therefore, to assume that it doesn’t.

In California, new teen drivers have to complete 50 hours of supervised driving in addition to time driving as part of driver training. Supervised driving requires a licensed driver to be in the front seat next to the driver. The supervising drivers may be driving instructors, parents, guardians, and others.

At least 10 of those hours must be at night.

To count as a supervising driver in California, the person must:

• Be at least 25 years old.
• Have a valid California driver’s license.

Required Records

CA requires driving schools to maintain specific records. The records must be kept for three years, and must be available for DMV inspection at all “reasonable” times–business hours most likely. The records you need to keep include:

• The school’s name, address, and license number.
• The name and address of each student.
• Each student’s permit or driver’s license number.
• The date each instruction permit was issued.
• The name and instructor’s number for each instructor.
• The dates and types of all instruction as well as hours of instruction.
• The total cost to each student.

You might want to organize your records around current and former students, and keep both electronic and paper versions.

Other CA Driving School Information

The CA DMV provides parents and teens a range of information about driving schools which indicate what California driving schools may or may not do. Based on this information, the following points apply to you and your school.

• Your driver education course may take as long as it needs to, as long as it provides at least 25 hours of instructional time; you should probably keep it as short as possible, respecting school and job commitments.
• Your videos may include graphic depictions of accidents, but you should warn parents ahead of time.
• You may permit observers in the car during a student’s behind-the-wheel instruction, while parents may request that no passengers be in the car.
• Parents may request male or female instructors, but you do not have to guarantee the availability.
• You do not have to meet a set schedule for driver training, but you should allow enough time between sessions to allow the teen to practice with the parent.
• You may have a pick-up/drop-off policy, but that’s entirely up to you.
• The state does have a complaints process for driving schools.

You should post your licenses in your office for your clients to see–proving that you are licensed to be a California Driving School, and are able to teach driver education, driver training, or both. We recommend that your website include a link to the state complaint process, but that you also have a policy for handling complaints.

You probably should not guarantee passage of the driving tests, although once you have a track record, you may certainly boast about your passage rate.

Starting a Small Business in California

Your driving school is not just subject to the requirements for driver’s education in California. You also need to establish your Driving School as a small business, and have to consider a number of factors. The form of business you take up, as well as the procedures, are appropriate topics of conversation with your lawyer and accountant. The considerations we offer here are not legal advice, but should provide you with things to think about as you set up your business.

Business Registration

All businesses need to register in California, especially the business name—the “doing business as” certificate. Banks may not be willing to set up your account until you have that DBA form. We’ll include where to register in the business structures below.

You will also need to obtain a Federal Employer Identification Number. Banks may need it for your business accounts, and you may be wanting to employ people. To obtain an EIN, go to the IRS website and complete the application form you find linked there.

Sole Proprietorship

Owning your own business is the easiest one to set up, but also may open you to liability concerns. As a sole proprietor, your business is simply part of your life. You keep a separate set of books, and complete a Schedule C for your 1040 form every April.

Sole proprietorships can expose the proprietor for full liability, even with insurance. That may mean that if you are sued, you may lose your home and property, as well as your personal bank accounts and other assets.  This risk may not be worth the ease and independence.

In California, sole proprietorships are subject to the following requirements:

• File your statement of fictitious name with the clerk of the county in which your principal place of business is located.
• Nothing needs to be filed with the CA Secretary of State.
• Comply with the DMV’s requirements as outlined previously.

Corporations

You may set up a full corporation (“Inc.”) as your business structure. Corporations limit your liability for loss to your investment in it, as a general rule (although banks may require you to be obligated personally if you take out a loan to get your business going). This form of business keeps your personal assets safe.

As an owner of a corporation, you’ll have to set up your driving school consistently with the rules for corporations in California. You’ll also have to decide whether to be an S Corporation or a C Corporation. Generally, the S Corporation form is set up for small businesses. It allows income and taxes to pass through to the owners. You will want to discuss these forms with your attorney and accountant.

The Secretary of State publishes the current processing times for a variety of filings.

You should take the following steps to set up a corporation in CA.

• Check for name availability–this can only be done by mail using the form provided.
• As you work to set your business up, you may reserve a name for up to 60 days. You may drop the form off in Sacramento or Los Angeles or mail it in to Sacramento. No online options are available. The fee is $10.
• File the Articles of Incorporation with the Secretary of State. If you are close corporation–with no more than 35 shareholders–you should use this form.
• You will need an Agent for the service of process–who can be an individual or corporation. Usually the owner of a small business is the agent.
• Set up your bylaws, directors, and other matters.

Limited Liability Company (LLC)

You may be able to set your driving school up as an LLC in California. The LLC form provides the same limited liability as a Corporation, but do not have to comply with the corporate formalities most states require, including items like bylaws, required stockholder meetings, and minutes (although minutes of meetings are probably a good idea).

You’ll have to discuss the advantages and disadvantages for the LLC with your attorney and accountant.

LLCs must register and follow other requirements of California’s laws:

• Check to see if the name is available. You may check online for yourself, although this is not an official name availability check.
• As with a corporation, you can reserve a name for up to 60 days.
• File Articles of Organization with the Secretary of State–the fee is $70.
• While you do not need to have an Operating Agreement, you probably should–but it does not need to be filed.
• As with a corporation, you will need a Registered Agent.
• Within 90 days of submitting your Articles of Organization, and every two years thereafter, you need to submit a Statement of Information. This can be done online or by mail.

Now What Do I Do?

Once you’ve complied with all the legal requirements to be both a driving school and a small business in California, you need to get students.

Getting students requires marketing—largely on the internet. You will need the following systems set up to obtain students:

• A website—focused on the types of students you want to attract, and aimed at your locality.
• The website should also include a blog, which allows you write about a variety topics and engage in Search Engine Optimization—which will drive traffic to your site.
• A Facebook page, linked to your website, to become noticed and drive traffic.
• Getting testimonials from successful students.

Marketing is something you will have to devote time to. DrivingSchool.Marketing can help you get the best bang for your marketing buck.

Conclusion

California’s Driving Schools seem to have a great deal of freedom to provide driver education and training, as long as the instruction fits the State’s requirements. While the number of forms needed to get started is rather large, it’s a one-time only experience.

Disclaimer: This page is part of DrivingSchool.Marketing’s series of state and provincial pages designed to help entrepreneurs like you start driving schools. States change their regulations, or the web pages they host their forms. While we believe these rules are accurate as of the date of publication, we cannot guarantee full accuracy. Please let us know if you spot any problems.

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Josh Meah

Josh is the CEO of DrivingSchool.Marketing. His goal is to be the marketing and business development partner of driving schools around the world, helping them become thriving businesses while also expanding general awareness for the importance of traffic safety standards and education.

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