Business licenses: Everything You Need to Know
Business licenses are obtained in order to legally function as a business. Laws are different in each state.3 min read updated on February 01, 2023
How to Obtain a Business License
Business licenses are obtained in order for an enterprise to legally function as a business. Laws are different in each state, so it is essential to know the licensing guidelines of the state where you are filing. Failure to conform can have severe penalties.
Knowing Local Requirements
You may have to get a license from the town where you are planning to set up your business. Whether or not you will be renting a workplace area or working from your private home, you will have to get a license for that location. Each city has a database with an inventory of addresses that fall inside that municipality. Search online in your city for the title + enterprise license type to find the right webpage. The US Small Business Administration (SBA)'s website also has this information. Whether or not you might be simply starting out in business or firing up another new enterprise, the SBA has a wealth of knowledge, not simply on guidelines and laws, but for many areas including how to choose a business name to how to get funding.
The SBA webpage on permits provides info on where to get your license. Different business types have different codes, and you may have to know this information to get a license. Different codes require specific processes, and each city and state has its own set of requirements.
If you happen to use the SBA website, you will have to find your company’s state and narrow your search by location. Chances are you'll be introduced to an inventory of links and knowledge related to acquiring a license or registration.
You will also need to complete different kinds of forms or online applications to apply for permits specific to your business. For instance, if you are going to be working from home, planning to transform your work area, planning to make use of hazardous supplies, selling food, etc., you will have to be sure to get the right permits and forms. You can find this information online, or you will be able to print the forms and fill them out by hand. Some states make provisions for filling out the applications immediately online, but they will usually require you to create an account before you can do so.
Required Information for a Business License
You will generally be required to provide the following information about your business, in addition to other information specific to the type of business you are operating:
- Type of business
- Business address
- Name of business owner
- Contact information
- Federal ID number
- Number of employees
Getting Your License
Use a website or USPS mail to file your forms with your city’s finance division. Your city’s website will include the right contact data for your needs. Every city has its own requirements relating to submitting payments that go with the license you are applying for. Payments range from $50 – $400 or more, depending on what sort of business you are in.
The time it takes to process your license will differ depending on the kind of entity you're creating. For instance, a DBA would possibly take only a couple of days, whereas a corporation might take as much as two weeks. Every state will differ.
In some cases, you will want to apply for your license in person and supply identification to show you're the business owner. You may need to get fingerprinted, as well, if you are applying for any type of security industry license.
When you begin working, it is vital to comply with the foundations laid out by your city for the kind of business you are running. For instance, in the event you opened a restaurant, make sure you get the required permits, a liquor license, or food inspections. You will have to also renew your license to stay in compliance with your city’s legal guidelines. Not renewing your license can mean that your business is unable to operate.
Most companies want a normal business license to function in a specific city or county. There are sometimes local tax-related licenses, too.
What Are the Most Common Permits, Licenses, Tax Registrations?
There are many tax registrations, business permits, and licenses that a company might need, below are a few of the most common.
- Home Occupation Permit
- Zoning and Building Permit
- Property Use Permit
- Certification of Occupancy
- Health Department Permit
- Sales Tax License and Numbers
- Professional License
- Sellers Permit
- Fire and Police Department Permit
- Employee Identification Number
- Withholding Tax Registration
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