Is a Business License Needed to Form an LLC?

Is a Business License Needed to Form an LLC?

by Brette Sember, Esq., January 2016

Starting an LLC might be the best way to form your business, but you likely will have a lot of questions about organizing your business in this way. There are some very important requirements to understand when you form an LLC. You may be wondering if you need to apply for a business license, among other questions.

Forming an LLC

To form a limited liability company you must follow your state laws about LLC formation. Most states require that all members (owners) of the LLC be over age 18. Most states do not have any residency requirements (you do not need to live in the state to form an LLC there). To form your LLC, you must complete some forms with for state (and usually pay filing fees). You’ll first need to choose a name for your LLC. It is a good idea to check the state registry to ensure the name you want to use has not been taken. You’ll also need to understand what your state’s requirements are for the name. You may need to include “Limited Liability Company” or “LLC” in the company’s name. Additionally there may be words you cannot include in the name.

LLC Requirements

While there is no specific LLC business license you need to obtain to be able to file for your LLC formation, you do need to take some required steps. You need to select a registered agent for the LLC who will receive legal service for your company within the state. You must complete and file a document called Articles of Organization with the state. There is usually a filing fee for filing this with the state. You will also want to create an operating agreement that lays out how your business will run, including how it will be managed.

Business Licenses

Aside from the required items mentioned above, you do not need a special LLC business license unless your state or local government requires a business license LLC. Check your state laws to determine if there is a license you need. Your type of occupation may impose other business licensing requirements on you.

For example, if you plan to open a gun shop or a liquor store you have to get a business license to sell those types of items. If you want to own a child care center or a beauty salon, you will need to comply with your state’s licensing requirements.

Tax Registration

obtaining a business license if your state requires it, you must also register for LLC taxes. You will need to register with your state tax agency for both income taxes as well as sales taxes (if you will be selling products). You can choose to file taxes as a corporation, partnership or an individual. There is no federal tax classification for an LLC which is considered a “disregarded entity.” If you have more than one member in your LLC and choose to operate as a corporation, you will need to obtain an EIN. If you are a sole owner you can file using your own Social Security number.

If you need help starting an LLC, LegalZoom is here for you. Answer a few questions about your business online and we will help you complete and file the paperwork. We can also help you figure out which business licenses you may need and help you get them.