Many people think when you register a business, you're all set and can begin selling goods or providing services immediately. But you also need to know which business licenses and business permits your new startup might require.
Virtually all businesses will need a license of some sort, and many will need to apply for a number of different licenses and permits. The types of licenses and permits your business requires will depend, among on where you live and the type of industry you're in.
Because the permits and licenses you’ll need can vary so wildly from place to place, and between industries, it's not possible to provide detailed information about the permits you’ll require, but the following checklist can serve as a helpful guide to get you started.
Not all of these licenses and permits will be required for your business You will need to do further research into which are applicable to your particular business. Still, here is a list of many common compliance documents:
- General business license. Businesses generally require a general business license in order to operate a business in the city or county in which they are located.
- "Doing business as" license or permit. If you'll be running your business under a fictitious business name (also known as a DBA name), your state may require you to register your business name.
- Federal and state tax identification number. Most businesses will have to apply for a federal EIN, or employer identification number, also known as a tax identification number. Your state or local government might also require you to obtain a state tax identification number as well.
- Sales tax permit. If your business sells goods, whether online or offline, and your state requires you to collect sales tax, you may be required to obtain a business permit usually known as a sales tax permit or a seller's permit.
- Zoning permit. Local zoning regulations may regulate where certain types of businesses can and cannot operate. These regulations apply not just to businesses such as manufacturers and restaurants. They can also have an impact on the home business owner. You may have to apply for a variance or a conditional-use permit if the area in which you wish to operate your business is not zoned for your type of business.
- Home occupation permit. A home occupation permit applies to home-based businesses. If you plan on operating your business from within your home, check with your city or county to see if a home occupation permit will be required.
- Professional/occupational licenses. Specific types of businesses or businesses in particular industries may require special professional or occupational licenses. The types of businesses or industries will vary from state to state. For example, certain states may require child care businesses to obtain a special license. Professions such as lawyers and accountants are also often regulated and may require special professional licenses.
- Health permits. Certain businesses such as those which involve the preparation and handling of food may require health permits.
- Fire department permits. Businesses which use flammable materials, are open to the public or involve a number of people assembling in one location may require a permit or an inspection by your local fire department.
- Environmental permits. Many state and local governments require certain businesses to obtain special pollution control permits. For example, if in the course of your business you'll be engaged in an activity which results in the discharge of an environmental contaminant into the air or the water, you may have to obtain a special permit.
- Sign permit. Some local authorities have regulations which require that businesses obtain a permit before putting up a sign. The regulations may also stipulate certain requirements such as the size of the sign and where the sign may be located.
- Building or construction permit. If you will be making any changes, particularly structural changes, to the place in which you will be operating your business, you may need a building or construction permit from your local authorities.
- Special state licenses. Many states require certain businesses, such as restaurants and establishments which serve alcohol, to obtain special licenses. In many cases these licenses serve to show that the business in question has met specific state-regulated standards.
- Special federal licenses and permits. A federal license or permit may be required if your business is involved in an activity which is regulated by a federal agency. Examples include the sale or manufacture of alcohol or firearms, commercial fishing and wildlife-related activities such as the import or export of wildlife. Here is a brief list of business activities which may require such federal licenses and permits.
This checklist is not exhaustive, and you will need to do the proper research on the licenses and permits which apply to your business. The US Small Business Administration's is a good place to start your research. You will find links there to the various state business licence office websites, which should set out the state's license and permit requirements and provide you with information on how to get a business license.