Most small businesses need business licenses and permits. But specific licensing requirements depend on where you're located and the type of business you have. Some businesses just need a general county business license, while others have to be licensed by federal, state, and local agencies.
Because the requirements can vary so much, there's no simple answer to how and where to apply for a business license. But there are some general guidelines that will help you figure out which licenses you might need and where to apply for them. Here are some of the most common types of business licenses and permits.
General small business licenses
Most businesses must have a general business license. These licenses may be issued by your county or city, and they're often tied to a local business tax. General business licenses are in addition to any paperwork you filed to form your business—a corporation or an LLC is not considered a business license.
In addition, if your business is based in your home, you may need a home occupancy permit. These permits help ensure that your home is still a residence and that you're not violating zoning restrictions, causing parking or traffic issues, or installing improper signage or alterations.
To find out what's required in your area and how to apply, contact your local tax collector's office, county administrative offices, or city hall. You can also do a general internet search for the requirements in your area. Be sure to research both your city and your county because they may have different requirements.
A seller's permit is an additional license you need to run a business that collects sales tax. In most states, most goods sold at retail are subject to sales tax. As the seller, you'll collect the tax from your customers and send it to the state.
Your state's department of revenue website should have information about the sales tax collection process and how to apply for a seller's permit or sales tax permit. You can also do an internet search for "sellers permit in [the name of your state]."
Federal, state, and local agencies impose additional licensing requirements on certain professions and industries. In general, these licenses ensure that your business is safe and that you have the proper training and/or skills to operate it. While you can get most types of business licenses by filling out a simple form, industry-specific licenses may involve training, exams, and inspections.
Federal agencies oversee licensing in a few industries. These include alcoholic beverages, agriculture, and transportation and logistics. The Small Business Administration has a helpful chart of all industries with federal licensing requirements, with links to the appropriate licensing agencies.
States and localities regulate a wider array of businesses, from hair salons and tattoo parlors to construction firms and insurance agencies. If you make or sell food, you'll need a license from your health department. Certain professions such as law, medicine, real estate, and accounting have their own licensing boards.
Your state's website may have a list of industry-specific licenses. You can also find out if you need a business license by talking to other people in your industry or searching online for licensing requirements for your occupation in your state, county, and city.
DBA or 'doing business as' licenses and permits
If you're a sole proprietor and plan to conduct business under a name other than your own name—or your official business name—you'll need to register a fictitious business name, also known as a DBA or "doing business as" name. For example, if you formed XYZ Corp. but plan to open a shop called "Dee's Dresses," you'll need a DBA.
Like everything else about business licenses, the procedure for registering a DBA depends on where you're located. In many states, you register with the same state agency that handles business formations. But in some states, like California, you register with your county. Search online for "how to register a DBA in [name of your state]" to find the requirements that apply to you.
You may need other types of permits too, including environmental or fire permits. Figuring out what you need and where you apply for a business license can be complicated. You can get help online or you may consider talking to a small business lawyer. And be sure to keep track of reporting and renewal requirements for each license you get.
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