How to Get LLC License: Everything You Need to Know
After registering your LLC, you need to obtain the needed licenses to start doing business. The types of licenses depend on your location and line of business.3 min read
How to get LLC license? After registering your LLC with the state, you need to obtain the needed licenses to start doing business. You might need different licenses from the county, city, state, and federal authorities to operate. The types of licenses you are required to have depend on your location and line of business. You can get details about the licenses you need from the division of corporations of the state's Secretary of State. A local chamber of commerce can prove a useful resource on business licenses. The Small Business Administration guide also has a section dedicated to federal licenses.
Your LLC and Licenses
Contrary to popular belief, forming an LLC is not synonymous with getting a business license. A business license is obtained after forming the LLC and some businesses need much more than just a business license to operate. Forming an LLC is the first step toward starting your business. Formation satisfies the legal registration requirements while licenses may be needed for the LLC to start doing business.
Formation of an LLC differs from state to state but usually involves the following steps:
- Reserving a name with the state Secretary of State. A name can be reserved until the LLC formally registers with the state Secretary of State.
- Appointing a registered agent for service process. The agent receives legal paper on behalf of the LLC.
- Filing the Articles of Organization. This document states basic details about your LLC. If your LLC successfully files the Articles of Organization, then your LLC is now a legally registered entity but there are a few other things you need to do before you can be allowed to operate.
- Some states require new LLCs to publish their Articles of Organization in a newspaper and submit an affidavit of publication to the Secretary of State.
- Some states require the new LLC to file its first annual filing within a few weeks of its formation.
- It is also a good practice to draft an operating agreement. This document will govern the relationships between the LLC members.
- Most LLCs are required to get an Employer Identification Number (EIN) from the IRS. The application for the EIN can be made online.
- The LLC also needs to get a business bank account to be able to separate its finances from those of the individual members.
It is at this point the LLC is ready to get licenses to operate.
Which Licenses Does Your LLC Need?
The exact type of licenses your LLC needs depends on its line of business and location. A hotel would likely need a permit from the health department. Many businesses are required to have a tax registration certificate. Other types of licenses include zoning permits, professional licenses, home occupation permits, and general business operation licenses. The permits and licenses also vary from state to state.
Some permits are issued by the county government while others are obtained from the city or state. Some business also need to have federal licenses.
You can get information about the licenses you need on the websites of your state's Secretary of State or state Attorney General. A local chamber of commerce can also fill you in on the permits and licenses your business needs. The Small Business Administration guide lists the federal permits American businesses need.
How to Get a License for Your LLC
The exact process of filing for a license will naturally depend on the state where you are doing business but it normally involves the following steps:
- Filing an application with the licensing authority. Some licensing bodies have a provision of filing online while for some the only option is using postal mail, or delivering the application in person.
- Paying the required fee.
Most licenses must be renewed annually by filing an application and paying a small fee. The renewal of some permits is dependent on the way the LLC follows the terms of the permit. Restaurants, for example, might be subjected to regular unannounced inspections. A restaurant can lose its license if the inspectors find out that it does not meet the minimum hygienic standards set out by the licensing authority.
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